Chocolate retailers have bars in their eyes

Teenage boys and middle-aged men alike rejoiced last month when, after eight years in her warren, Cadbury's brought back the sexy and iconic rabbit in the form of the Caramel Bunny. With her glamourous new look and curvier figure, there's no denying that the Caramel Bunny, like the chocolate category, is in great shape.

Consumer spending may be slowing, and concerns over healthy eating growing, but the total chocolate category continued to pack a punch in 2008, growing at 2.7% (IRI data 52 weeks ending December 27, 2008).

Bars were the star performers, up 8.6% in the year, closely followed by the bitesize sector, which grew by 2.4%, and block chocolate which experienced growth of 1.3%.

Nestlé UK trade communications manager Graham Walker says he expects the growth in bars to continue as shoppers look for low-cost treats to pick them up during the economic low. "Convenience stores are also in a good position to take advantage of this trend," he says. "Retailers have told us that their footfall has increased lately because more people are saving on fuel by walking to their local stores, and also going to smaller shops more regularly."

Jonathan Summerley, senior buyer at confectionery wholesaler Hancocks, agrees: "Bars remain the heartland for independent retailers where chocolate is concerned," he says. "The supermarkets' focus on multipacks leaves the impulse-driven countline market open to them."

And manufacturers have been busy adding excitement to the bars category with an array of new product launches and impactful advertising campaigns.

Snickers once again secured a partnership with 80s A-Team legend Mr T for a heavyweight campaign aimed at 16- to 44-year-old men. Meanwhile, Nestlé continued to invest in Kit Kat, and Cadbury gave the gift of life to yet another iconic brand with the rebirth of Wispa last October.

Kraft has also entered the fray with a limited-edition chocolate bar, Terry's Chocolate Orange Cracking Hazelnut. The milk chocolate bar, packed with real orange and hazelnut, is available in packs pricemarked at 42p.

With staying in apparently the new going out, sales of sharing bags are also on the up. "Our own share bag range of popular sweets and chocolates has gone from strength to strength due to its value for money," says Summerley. "Branded options such as Cadbury Buttons (pricemarked 99p) have seen extremely high growth, and Mars Pouches, which have the added advantage of resealability, have experienced high sales."

Keen to get in on the action, Nestlé launched new Toffee Crisp Clusters in January. The bite-sized pieces of chocolate crispies in caramel join the ranks of Nestlé's already popular bagged chocolate brands including Munchies Pouches and Aero Bubbles.

More recently, Cadbury launched a bitesize range comprising Cadbury Clusters, Cadbury Raisins and Cadbury Peanuts. Small bags have a rrp of 50p and large £1.79.

As for slabs, this market continues to be a tough nut for independents to crack. "It's not a very impulsive market and the supermarkets do place some focus on it," adds Summerley. "When pricemarked, the core Cadbury's 99p range does very well, but little else," he adds.


Health warning


Whatever the format, players in the chocolate market cannot have failed to take note of the trend towards healthy eating and wonder when the shift to cutting back will hit them. With the exception of a few antioxidant-rich dark chocolate bars and some functional varieties, chocolate is not normally thought of as a 'healthy' product. However, fortunately for the chocolate brands, consumers have so far shown themselves loath to abandon their chocolate fix.

"Chocolate is a treat and has been for a very long time," says Summerley. "To consume a healthy chocolate would just not be the same and it's not what the British consumer wants."

Chocolate is an indulgent product, and in these difficult financial times the brown stuff is proving to be a welcome cheap treat for many.

However, manufacturers are working hard to make their products 'healthier'. Last year saw Cadbury and Mars strip artificial colours, flavourings and preservatives from many of their core chocolate products and all Mars packs now display clear nutritional labelling.

Removing all the additives is particularly important in the children's chocolate market, adds Nestlé's Walker. The manufacturer recently reintroduced blue Smarties made with natural colourings. Its popular Milky Bar brand has also been reformulated to be 100% natural - a fact which it is shouting about. Says Walker: "It's really important that manufacturers communicate developments like this to consumers. Shoppers are definitely becoming more savvy about additives."

The past 12 months has also seen manufacturers working to reduce calorie content wherever possible, or introducing less calorific variants of trusted brands.

Nestlé's Kit Kat Senses brand is one such innovation. The wafer biscuit bar contains just 165 calories and was originally designed with young women in mind. However, it turns out that 40% of its core consumers are men. Walker says that Nestlé will be looking to launch more such chocolate products in the future.