Sugar confectionery: Bank on it

If there’s one thing guaranteed to sweeten the bitter taste of a double-dip recession, it’s sugared treats. As the economic gloom deepens, the nation is collectively reaching for some sweet treats to help soothe the pain.

“As consumers rein in their wider spending on big-ticket items and non-essential purchases, the intrinsic value of smaller treats increases,” says Tangerine Confectionery marketing director Alison Brand. “While there is little sign of coming out of recession, sweets should continue to be resilient during this period of austerity.”

Within the UK convenience channel, total sugar confectionery is worth £491m, growing at 2.4% year on year, claims Kraft. Kids’ sugar confectionery is worth £202.6m in convenience, growing at 4.3% year on year, says the firm. Meanwhile, adult sugar confectionery is worth £288.7m, and growing 1.1% year on year. Sugar bags contribute considerable value to the overall category at £286m, growing at 1% year on year.

Eating in

With the recession tightening its grip on consumer spending, consumers are continuing to entertain indoors. “The sugar confectionery market for adults remains extremely robust and continues to grow,” says Hancocks Cash & Carry purchasing director Jonathan Summerley. “Fuelled by increased socialising at home, nostalgia and the desire for an affordable treat, the state of the economy ironically helps to drive the market forward.” Sharing bags are a key growth driver in sugar confectionery and Hancocks has seen year-on-year sales rise by 65%.

“There’s been a rise in sharing occasions recently as groups of families and friends stay in and enjoy treats together,” says Bazooka Candy Brands marketing controller Sarah Sibley. “Brands are directly responding to this by introducing products to meet the needs of consumers - bigger bags of sweets are becoming more and more popular in the category as they appeal to the ‘Saturday night in’ crowd. The need for indulgence has also been heightened as consumers look to treat themselves in the tough economic climate.”

Leaf Confectionery warns retailers not to become blinkered into thinking that chocolate is the only category to shine in the bagged arena. “The sharing bags and pouches from chocolate manufacturers are always going to be popular, but don’t limit your customers’ choice to chocolate - give them a few other options, too,” says trade marketing manager Joanne Carr. “Remember that seasonality impacts consumer taste and sugar sales, so make sure your range reflects that.”

The Big Night In occasion brings with it numerous opportunities to increase sales of sugar confectionery. “Sharing bags such as new Starburst and Skittles ‘Tear and Share’ Pouches are perfect for the Big Night In occasion, providing consumers with an easier way to share their favourite products,” says Wrigley sales director Duncan McCulloch. “Retailers should ensure they are tapping into the rapid growth of the Big Night In occasion, which remains a huge opportunity.”

The popularity of sharing bags, combined with a surge in demand for softer eating sweets, has seen a wave of NPD in this area for 2012. “The market is seeing growth in softer eating treats, such as gums and jellies, as a more interesting alternative to hard boiled sweets and toffee, which are all in decline, and a better value offering than chocolate,” states Haribo managing director Herwig Vennekens. “The latest data shows value growth of 2% for gums and jellies.” The firm has introduced a limited-edition Starmix pack for the summer, which features a union flag pack design, developed to help consumers celebrate patriotic occasions in 2012. Limited-edition Starmix is available in 235g £1 pricemarked packs and 160g unmarked packs.

Swizzels Matlow is also looking to capitalise on the demand for softer eats. “This month we are launching Squashies, a new range of gums with the flavours of Love Hearts, Drumstick Lollies, Double Lollies and New Refreshers. This is our first foray into developing gum versions of our household brands. Research has shown consumers love the concept and the products.”

Following on from the success of its singles bags, Bazooka Candy Brands has released a 120g share size bag of its new Moshi Monsters fruity Yummy Gummies range. The product is available in a permanent £1 pricemarked pack designed to appeal to the impulse channel.

Meanwhile, Kraft’s The Natural Confectionery Company (TNCC) has launched a 180g sharing bag format of Guzzle Puzzle. “Guzzle Puzzle offers consumers a unique and fun experience - by combining two different shaped fruit and spice flavoured jelly sweets together like puzzle pieces, an additional flavour is experienced,” says Kraft communications manager Susan Nash. “Following consumer demand, Guzzle Puzzle will now be available in a 180g sharing bag, with a new apple flavour, enabling consumers to create two extra flavours: lemonade and blackcurrant.”

With many consumers opting to have a cosy night in rather than going out, retailers are advised to create dedicated areas in-store. “We recommend merchandising sharing bags, such as TNCC Guzzle Puzzle on the bag stand with other sharing formats, as well as drinks, snacks and entertainment to emphasise their relevance to the Big Night In occasion,” says Nash.

Tangerine’s Brand is equally supportive of secondary siting. “Siting snacking items alongside the beers, wines and spirits aisles creates in-store theatre to tap into the sharing trend. Impactful, well-signposted displays that incorporate confectionery, savoury and drinks categories will maximise sales and encourage purchase of multiple sharing products from different categories,” she says. “Products should be grouped together to make it easier for the consumer to shop and pick up everything in one go.”

Perfetti Van Melle backs this up. “Secondary sitings are always important as there is a strong element of ‘I see it and I want it’ in sugar confectionery,” says marketing director Mark Stangroom. “Cross-category opportunities exist all over the store - hot spots are fridge areas in the summers where a clipstrip or a parasite unit of bags of sweets can result in additional sales for consumers who come in for soft drinks. Also, if a store sells coffee to go then a display of mints such as Smint and Mentos located in this area can result in additional sales. Retailers can consider what categories go together and offer linked deals to consumers to further encourage purchase.”

A nod to nostalgia

Another side effect of the current economic situation is that consumers are seeking comfort in familiarity. “Enjoying the simple fun of finding old favourites, often introducing them to younger family members, means shoppers continue to look backwards as well as forwards in the confectionery market,” says Hancocks’ Summerley.

Adds Carr: “Nostalgia remains an important emotional driver of the confectionery purchase, with older consumers often picking up a confectionery treat that they remember from their own childhood, either for themselves or their children or grandchildren.”

Kraft concurs that retro brands are in big demand. “One of the key trends that we are noticing is the return to tried and tested brands,” says Nash.” This is of particular importance to established brands such as Bassett’s and Maynards, which have been around for more than 100 years, and offer a range of familiar products for all age groups.” While Maynards sales remain steady, Bassett’s have increased 9% year on year.

Tangerine’s Barratt brand has also seen a sales boost due to the retro revival. “In times of economic strife consumers want to buy a brand they trust, so as the home of some of Britain’s favourite retro sweets we’ve undoubtedly benefited from the ongoing resurgence of the traditional sweet shop and the nation’s unabated love for all things nostalgic.”

The firm is capitalising on this further still with the launch of a 180g British Mix bag (rrp £1.35), featuring gums shaped like Big Ben and red telephone boxes.

Not wanting to miss a trick, nostalgic sweet brand Werther’s Original has invested in a £4m advertising campaign for 2012. The ad, which first aired in March, focuses on an adult reminiscing the childhood joy of a sweet shop, feeding consumers’ desires for days gone by.

Swizzels Matlow is also benefiting from the trend. “We are seeing strong growth of bulk bags of sweets due to the popularity of pick ‘n’ mix and a resurgence in the popularity of retro brands,” says marketing manager Sarah-Louise Heslop.

A perfect fit with the retro vibe, the pick ‘n’ mix sub-category is booming, says Summerley. “The pick and mix success story appears to be limitless. We place a high priority on developing new pick and mix sweets. The flexibility of the category means that it can be made to suit all store formats.”

Recent pick ‘n’ mix launches at Hancocks include Watermelon Bon Bons, Mega Sour Balls, and Brit Bears.

Get flashy

Alongside nostalgia, value for money is a major driver within sugar confectionery. Price-based promotions are continuing to support growth within the market, claims Haribo. “Pricemarked packs have performed particularly well within independent retailers, and we believe that this is because they are a simple mechanic to understand,” states Vennekens. “Through pricemarked packs consumers can clearly see the on-shelf price this helps them to better manage their budgets while treating themselves in a fun and affordable way. For retailers, pricemarked packs need no point of sale to reinforce or communicate price.”

To support this notion, Haribo has unveiled a new range of 80g bags pricemarked at 50p. Products include Rhubarb & Custard Splats, Little Jelly Men, Eggstras, Giant Strawbs and Yellow Bellies.

Another big fan of price flashes is Wrigley, which has just launched a range of pricemarked packs of its most popular brands, including Starburst and Skittles. “With recent HIM research revealing that 44% of consumers are more likely to buy a product with a price clearly displayed, it’s no secret that consumers want to ensure they’re getting value for money,” says Wrigley’s McCulloch.

Storck has also taken price flashes onboard with Werther’s Original core sugar range available in pricemarked packs, exclusive to the independent trade.

Value packs are becoming increasingly more important, concurs Swizzels Matlow. The firm is launching a range of value-added packs to appeal to bargain hunters, with products including Rainbow Drops, Wines Gummies and New Refreshers.

Tangerine agrees that sugar confectionery must be seen to be giving good value for money. “We’ve seen frequent multi-buy, extra-free and round-pound pricing that support impulse purchase, or in the case of new products, encourage trial - the introduction of Lion £1 price packs at the end of 2011 have benefited from this,” says Brand.

Consumers are still looking for quality and value and so promotional activity is still strong in the category, adds Perfetti Van Melle. “In addition to this, there has been an increase in the number of on-pack promotions over the past year, and this has enticed consumers to take part and buy into brands. Smint has recently run a ‘text and win an ipad every day of the week for three months’ activity and Mentos is currently running an on-pack promotion on its multipacks where one of 500 holidays can be instantly won. Both competitions have so far received far more entries than would be the industry norm, which suggests that consumers are really looking for this type of activity at the moment.”

It seems that when money is tight, the escapism offered by such promotions is an important driver. Wrigley’s Skittles has been using on-pack promos to attract consumers, offering them the chance to win ‘nearly £50’ from a £50,000 prize pot by finding a gold Skittle, backed by TV ads.

Kids’ trends

While kids’ singles and kids multipacks are both flat, the growth that’s been experienced in the children’s sugar confectionery market can be attributed to the success of bags, says Bazooka. And the healthier their perception, the better when it comes to younger children.

“For young children, their choice of sweets is very much influenced by parents who might favour those with no added flavours or colours,” says Summerley. “A claim about natural fruit juices might also sway purchases for parents and so we have seen the development of many more products offering a healthier status where sugar confectionery is concerned.”

“The trend for using only natural colours and flavours has come more to the fore this year,” adds Tangerine’s Brand. “Over the next couple of years we are aiming to use only natural colours and flavours across all of our products.”

Nash agrees that the nutritional profiles of sweets are of key importance. “No artificial colours and flavours in brands such as TNCC continue to be important to mums, who act as the gatekeepers for children’s sweets.”

Moshi Monsters gummy sweets have been very successful in recent months, notes Hancocks. “Assuring mums with ‘No added flavours, no added colours’ status and 25% real fruit juice, younger children can embrace the popular Moshi Monsters brand that has become a fast growing online trend and a brand that is proving to work well offline, too,” says Summerley. Since launching Moshi Monsters at the beginning of the year, the product has already returned a retail sales value of £500,000, says Sibley.

While parents are firmly focused on the nutritional profile of sweets for their little ones, older children have the opportunity to choose their own treats. “Sweets that offer some sort of play value generally perform extremely well with children,” says Summerley.

Products such as Chupa Chups Melody Pops, which have a ‘trombone stick’ enabling kids to play a tune on them once the lolly is finished, are popular in the independent channel, notes Perfetti Van Melle.

Bazooka’s new Ring Pop Twisters (rrp 39p) also offer users added entertainment, providing both an edible treat and a spinning toy. The limited-edition treat comes in nine different twister designs.

One trend that penetrates all ages of children is sour flavours. “Kids enjoy the challenge and extreme fun that sour products provide,” says Sibley. “Subtle sour flavours are also being introduced to appeal to younger children who are keen to be involved in the action and show their adventurous sides, especially within gummies and chews, where the gatekeeper is more likely to be the purchaser.”

Meanwhile, stronger sour flavours are still a big hit with older kids. “The two Chewits Xtreme flavours satisfy those consumers, generally a bit older than the core Chewits consumers, who want a more challenging taste,” says Carr. “Chewits Xtreme adds value to the category by keeping older children coming back to the fixture and stretching the appeal of sugar confectionery.”

And it’s not just sours that appeal to kids. Flavours that offer a twist from the norm can add interest to a fixture, too. The Chupa Chups Wheel contains a selection of flavoured lollipops. New for 2012 is a strawberry and banana ‘Flavour of the Year’ (rrp 20p).

Meanwhile, Fruittella is hoping that its new cola/lemon flavoured stick (rrp 42p) will be the talk of the playground.

Bazooka is also going for a fun flavour with its new tutti frutti Big Baby Pop. The bottle-shaped candy features a tutti frutti lollipop and dipping candy and follows on from the success of the limited-edition candyfloss variant.

By catering to the key consumer trends of softer eats, share bags, nostalgia and value, while ensuring a regular rotation of new products, and providing a stimulating kids’ section, retailers can really bring out the best of sugar confectionery. With so much activity, it’s a tricky category to keep track of, but stay on top of it and the rewards are sure to be sweet.