Confectionery is possibly the ultimate impulse purchase, with 70 per cent of consumers buying chocolate and sweets on the spur of the moment. But, according to Nestlé Rowntree, the category hasn’t been as profitable as it could have been.

“The industry has driven volume at the expense of value,” says Graham Walker, trade communications manager at Nestlé Rowntree. “The problem is it’s all about price, promotions and deals. Even the gifting sector is heavily dealt – and that’s when consumers are trying to give someone a special gift.

“The heavyweight use of promotions has wiped £100m of value out of the category and confectionery is in danger of becoming just another commodity,” adds Walker.

With this in mind, Nestlé has devised a new ‘vision’, which it hopes will generate an additional £1bn in value for the category by 2010. The company has identified five tools to develop the category: innovation & renovation, visibility & communication, availability & convenience, drive occasions and value creation.

“Using these five tools we aim to make our activities bigger and better than ever. This applies to everything; from new product launches to consumer communications to product availability – ensuring our products are available wherever, whenever, in a format to suit consumers’ needs. Importantly, we must also apply these tools to the relevant consumer trends.

“By identifying the relevant consumer trends, and providing solutions that fit, we are helping retailers to offer their shoppers what they want. In addition, retailers will have the opportunity to balance promotional activity with new and innovative ideas from manufacturers – whether it’s a new product or piece of advertising – which achieve the full value of sales vital for the future of the confectionery market.”

Walker adds that Nestlé is trying to encourage people to not just think of price reduction when they think of promotions. “One oil company really got behind Kit Kat Big Break but let the displays and promotion sell the product,” he says. “Their view was ‘why do we need to erode our cash margin?’. We need to think about how we continue to add value to the category through promotions.”


According to the Institute of Grocery Distribution, petrol retailers hold a seven per cent share of the confectionery market. Filled chocolate bars such as Mars and Snickers is the biggest sector in forecourts, while bite-size (Maltesers, M&M’s etc) is the fastest growing category, at a rate of 10 per cent year on year in forecourts.

Chris Morgan, customer relations director at Cadbury Trebor Bassett (CTB) says: “We see enormous potential for forecourts to increase their profits through confectionery sales, particularly as only 17.5 per cent of consumers currently make an additional purchase with their fuel.

“We encourage all forecourt managers to take a fresh look at the layout and presentation of their store. Drivers spending £40 or £50 on petrol are often pre-disposed to buying impulse confectionery, however, it has to be easy for them to find. We suggest blocking by key brands as shoppers use the brands and colours to navigate the fixture to find what they want.”

Morgan adds that it is vital to keep till-point confectionery displays

well stocked and clearly merchandised. “Impulse sales opportunities are lost every day in forecourts through poor display,” he says. “We advise retailers to look at their stores through the eyes of a consumer and utilise merchandising techniques already being adopted by major retailers.”

At a basic level, the UK’s top 10 singles bars (see box, p45) are must-stock lines for forecourt retailers, as nearly one in three impulse sales are generated by these products.


Sales of bitesize products grew by 13 per cent in 2002 and the sector is now worth £472m, making it the fastest growing category in the entire confectionery market. Maltesers, the number one bitesize sweet, saw a 21 per cent increase in sales, while sales of M&M’s and Minstrels grew by 28 per cent and 13 per cent respectively.

Nestlé is now hoping to give Masterfoods’ brands a run for their money with the launch of Kit Kat Kubes – a bitesize variant of Kit Kat.

“Two out of five people buy into the bitesize category, and it’s growing fast,” says Nigel Glendinning, project manager for Kubes. “Balanced lifestyles and informal sharing are the two key trends driving the bitesize market.

“We want to grow the bitesize category by 36 per cent to £540m by 2008,” adds Glendinning. “To realise that, consumers need more choice. There is little choice for bitesize, especially for a fast growing category.”

Kit Kat Kubes – available in a 50g impulse pack (rrp 37p) and 175g hanging bag (rrp £1.25) – will be in store from September 15. Marketing spend includes £10m during the launch phase – £6m of that in consumer communications. The first TV ad breaks on October 1 and there will be a follow-up campaign in 2004. Nestlé is spending £1m on interaction with shoppers at the shelf and expects Kubes to have a consumer value of £54m in the first 12 months. The new product is also expected to bring more males into the bitesize category.

Another addition to the bitesize category is White Maltesers, which will be available for a limited period from November. Masterfoods is putting £2m behind the launch and activity includes a TV and poster campaign. A standard 37g bag has a rrp of 39p.


According to AC Neilsen, the special occasion confectionery market is showing volume growth of six per cent and value growth of three per cent. But many petrol retailers are not realising the opportunities in gifting.

“Gifting has been a problem area for forecourts,” says Nestlé’s Graham Walker. “People have perhaps tried to do too much and not had focus or clarity. Forecourts are not going to have a full range because boxed chocolates are a distress purchase, particularly for blokes.

“Forecourts have tended to just look at Christmas and Easter but we must encourage them to go broader and think of gifting as 52 weeks of the year. We talk about calendar occasions but every day is a potential gifting occasion, whether it’s a birthday, an anniversary, or a ‘thank you’ .”

In fact, according to Kraft Foods – which manufactures the Terry’s brand of boxed chocolates – although special occasion sales are being driven by gifting seasons such as Christmas, Easter and Mother’s Day, there is also a growing trend for consumers to buy for no particular reason – or as a way of saying ‘good luck’, ‘get well soon’, or ‘thinking of you’. This ‘gesture giving’ accounts for five per cent of all gifts bought, according to TNS Gift Trak.

Display is evidently crucial for selling gifting confectionery, especially for special occasions. “For forecourts, impulse purchases are critical right up to the event itself as people dash in for last-minute gifts on the way to parties,” says Easton Millar, trade relations manager at Kraft Foods. “To take advantage of impulse purchases, forecourt retailers should make use of gondola ends and secondary sitings, especially near the till. Secondary displays have previously been proven to drive sales in excess of 85 per cent.”

Celebrations, as the number one boxed chocolate, is a must-stock for the forecourt sector, but it’s also important to offers customers products at different price points.

Ferrero Rocher T16 is now ranked as the number one boxed chocolate in BP’s company-owned sites, but Ferrero says forecourts are turning to more expensive packs to drive cash rate of sale. “The Rocher T24 has previously been listed as a seasonal product within the forecourt sector but this year is being listed all year round,” says a Ferrero spokesman. “More luxury packs are being sold in forecourts to differentiate them from the multiples who are heavily price promoting and removing the value from the market and replacing it with volume.”


Nestlé’s Graham Walker believes forecourts would do well to link confectionery with other categories.

“Customers want to get in and out as quickly as possible in a forecourt more than any other outlet. If customers are paying for petrol they need to get in and out because there may be someone waiting to get on their pump, so it’s even more important for forecourts to link categories together,” says Walker.

“Customers might not even make it to the confectionery section so if retailers link Kit Kat with newspapers for example, the shopper might pick up the chocolate as well. Then, all of a sudden, you get a double purchase.

“Customers might come in with refreshment in mind so if you put confectionery with soft drinks, they will buy both. With supplementary categories, customers won’t buy instead of, they buy as well as.

“Temptation units are an absolute bull’s eye for a forecourt when you think of people’s behaviour in a forecourt shop. There are also quite a lot of forecourts with videos now so if you look at the informal socialising trend – a ‘Big Night In’ scenario – people want to rent a video, buy a bottle of wine and a box of chocolates. A tub of Quality Street or a hanging bag of Kubes is perfect for the sharing opportunity. If you link categories together, there’s always a chance you’ll increase basket spend.”

Kraft Foods also says it’s worth cross-merchandising boxed chocolates with other categories to help increase gifting sales. The company has worked with retailers to offer consumers bespoke gift-wrapped solutions for selling flowers and Terry’s Imagine together – the two top choices for gifts at Mother’s Day, according to TNS Gift Trak.

“Linking the products through matching colour schemes and an

eye-catching display encouraged consumers to buy both products at a ‘special price’, generating increased sales and an attractive ready-made gift solution for busy consumers,” explains Millar. “The gifting market is constantly evolving, offering both retailers and consumers new opportunities to give special presents. If retailers can stock innovative confectionery gifts in an attractive display, to meet all their customer’ needs, they will always come back for more.”


Chocolate sales in the run up to Christmas are more impulsive in forecourts than in any other sector so it’s important to focus on a range of the best sellers. “Something like a 1.5kg tin is not going to work in a forecourt,” says Paul Duckworth, seasonal brand manager at Masterfoods. “It’s worth stocking one or two of the top selection pack sellers, and tubes could also go well. Full value selections are ideal for those who want value, and a retailer can split the pack after Christmas if worse comes to worse.

“Products under a fiver work well in forecourts at Christmas. Something like the White Maltesers bucket at a £3.99 price point could sell well. Consumers will be looking for safe presents that they can buy for people they don’t know very well. But forecourts do really well on boxed Maltesers full stop, so they must make sure they don’t run out of the 146g everyday packs and 275g treat boxes.”

CTB maintains that most forecourts don’t plan or promote seasonal displays like high street retailers, but that’s often what shoppers want to see. Forecourts need to consider making a proper occasion of each season. Shoppers want to feel as if they are in a familiar shopping environment so there is still a lot more forecourts can do to encourage incremental confectionery sales.

Mike Tipping, forecourt trade sector manager at CTB, recommends setting out impactful Christmas displays early in high footfall areas. “Self-eat should be displayed from September to launch the season because early display will encourage initial trial plus repeat purchases throughout the season. The remainder of lines should be given focus in-store from October.”

To maximise seasonal opportunities CTB advises retailers to: create the Christmas occasion based around shoppers’ expectations; engage shoppers at the pump using greeting messages; use decorations to create a festive forecourt; encourage staff to participate to create a festive shopping experience; select a limited range of the top-selling products; locate the display in the main traffic flow; and avoid promotional mechanics, which destroy profitability.