It’s fun, convenient and with ‘better for you’ new product development, sugar confectionery is set to remain a major vehicle for retailer profit for years to come. Jackie David reports.
With almost 100% penetration and one of the biggest per capita consumption rates in Europe, the UK has always been a good market for sugar confectionery. But with the spotlight trained on children’s health, and stiff competition from other impulse categories, manufacturers have plenty to chew over. Despite the challenges, it’s still a core component of the c-store mix, as its performance at Hancocks demonstrates: sugar confectionery accounts for 3,000 of the cash and carry’s 5,000 confectionery lines and generates 60% of sales. “It continues to achieve steady growth of 2.8% in a climate of extreme competition,” says Hancocks purchasing director Richard Brittle. “Chocolate grows at just 2.3% so sugar confectionery, at £1.9bn, is definitely an important sector of the £6.2bn confectionery market.” However, as Natalie Croft, senior consultant at marketing consultancy Clear points out, as more information enters the public domain via government and the Foods Standards Agency, so demand for healthier options will increase. The key will be producing new product development that satisfies parents’ concerns about nutrition without turning off the target audience - children. SUGAR FREE, VALUE LADEN
Croft says one of the best examples of a brand that has tapped into the health trend but is still delivering bags of taste and fun and kid appeal is Chupa Chups. “It leads with sugar- free lollipops and communicates messages like ‘sucking is good for you’,” she says. In fact, following the success of its sugar-free lollipop Cremosa last year, Chupa Chups has launched Cuore di Frutta, an orange flavoured snack containing fewer calories, 35% of the recommended daily allowance of Vitamin C and an alternative to conventional sugars and sweeteners that helps prevent tooth decay. Manufacturers have also been stripping out additives and infusing products with natural juices. In addition to launching its own sugar- free lolly, Nestlé Rowntree’s Fruit Pastilles, Fruit Gums, Jelly Tots and Tooty Frooties have undergone just such a reformulation, as has Leaf’s Chewits brand. Removing sugar and additives isn’t the only way for a manufacturer to play the health card. Walkers Nonsuch is promoting the potential benefits of the inclusion of Brazil nuts and sesame seeds - both of which are sources of protein and vitamins - in its new English Crocante product. PURCHASER PROFILES
However important the ‘better for you’ segment may become, we’re still a long way from all sugar confectionery purchases being driven by health, as research by Clear demonstrates. The consultancy has identified three basic pillars for kids’ products: taste, nutrition and fun. It has also come up with three definitions for the purchaser, which is usually Mum: health conscious (tend to choose products that focus on nutrition); permissive (tend to buy sweets that deliver on taste and fun); and pragmatic (tend to look for products that hit all three pillars). While retailers should stock ‘better for you’ options, they should not neglect conventional offerings, says Croft. “Some consumers such as permissive mums have bigger concerns and priorities [than health]. While they may eventually start to pick up some confectionery products that are better for their kids, their concern is giving the kids what they want. It’s really down to pester power and giving in to make their own lives easier.” Just how strong is the market for ‘better for you’ sugar confectionery remains to be seen. “You can do sugar-free, you can go for vitamin-enhanced products, but these are all niche markets. At the end of the day, consumers want standard gums and jelly products and they want to be informed about the contents,” says Christian Freund, marketing manager at Haribo. The priority for Haribo is to educate consumers and take a responsible marketing stance, and that means not advertising to children under seven and ensuring there are clear nutritional guidelines on pack. A glance at the list of top selling loose sweets at Hancocks confirms fun and novelty is top of the agenda for children. Current favourites include Brainlickers, Toxic Waste and Toilet Candy, and a new product Lickety Lips has just been launched. This year’s emerging trend, however is ‘retro’, says Brittle. He says: “Old favourites such as rosy apples, flying saucers (voted the nation’s No. 1 sweet in a recent poll), candy necklaces, ABC letters and bulls eyes are all seeing a tremendous growth in popularity. Teenagers and students are finding these classic sweets for the first time while the older generations are taking a trip down memory lane.”
KIDS THE KEY AUDIENCE
Kids are sugar confectionery’s key audience. According to Mintel, 38% of parents of children aged five to nine keep a stock of sweets at home for treats and 28% of people with children in the same age group purchase sugar confectionery as part of their weekly shop. However, the number of under-10s is shrinking
Leaf’s strategy for its Chewits brand, which was relaunched this year, is to appeal to children in the 11-14 age group while retaining the current brand appeal among five to 10-year-olds. Similarly, over the years, Haribo has also widened its net and today not only targets children but students and young adults too.
Some brands, of course, already have a loyal mature audience and are continuing to invest in their brands.
Werther’s Original and Campino both launched limited editions this year - Werther’s Original butter mints and Campino cherries & cream. Meanwhile, Cadbury Trebor Bassett’s (CTB) brought the Lion sports mixture and Lion midget gems under the Maynards name in a move which it expects will bring new consumers to the popular hard gum brands in 215g bags - an important format for the category, accounting for 51% of sales, says Mike Tipping, head of customer relations for CTB.
He suggests retailers should dual merchandise the products. “For example, by pairing sharing bags, like Liquorice Allsorts, with wine or DVDs, retailers can not only make shopping easier for their customers but also help to increase their sales through increased visibility and maximise cross purchase opportunities,” he says.
Nestlé Rowntree trade communications manager Graham Walker agrees hanging bags are a growth area, with sales up by about 20% in 2004. “By stocking the Nestlé Rowntree hanging bag range and displaying it on the ‘Grab a Bag’ stand, retailers can see uplift in sales of up to 50% versus a standard priced range,” he says. Similarly, Hancocks offers a kids’ prepack stand which holds 24 bags, and with an rrp of 39p each or three for 99p they can get a margin of nearly 40%. Don’t forget loose sweets, urges Brittle, as these can offer margins of 70%. With the right merchandising unit such as Hancocks’ one metre wide, 24-bin pick and mix, product can fly, he says. “Customers are finding that if they present their selection effectively and are proactive toward new trends and flavours, they can achieve strong sales from a very small area. Stores close to a school need to adjust their range accordingly, whereas those with a good amount of student and adult customers would do well to take advantage of the ‘retro’ trend.”
NEW PRODUCTS
Rowntrees is launching a sugar-free lolly in three flavours: strawberry, blackcurrant and orange with an rrp of 28p. It’s also reformulating its pocket money range as part of its ‘get real’ initiative to contain real fruit juice and no artificial colours or flavours. A new 10p product, Rowntrees Giant Bugs, joins the portfolio along with a new 20p line Rowntrees Beetles and Butterflies pack. Two new hanging bags will also roll out in the summer - Rowntrees Jungle Mix and Rowntrees Scary Sours in 195g bags, rrp £1.07. All products are being supported with a £1m media campaign and themed pos. Zed Candy has relaunched Fizz Bombs nearly 30 years after the product first hit UK shelves. Fizz Bombs come in five flavours and are presented in high-impact metallic foil packs featuring brand graphics and packed into a 20-unit display. Rrp 30p.
Ashbury has relaunched the Needlers bagged range and added new lines including Full o’ Fruits, Milky Splitz and Toffee Twists. The products are said to offer good margins and deals which could include a free merchandising stand. There will also be a three-for-two offer on all products during the launch. Rrp £1.19. Vivil has added two new sugar-free products to its portfolio - Crème Life Classics, available in strawberry, raspberry, blueberry and caramel, and Latte Macchiato. Both come in 140g bags with an rrp of £1.49.
RETAILER VIEW
Mr Patel gives over two to three metres to sugar confectionery in his White Hart Lane outlet, Pat’s Food Store, in north London. “In the winter, consumers go more for chocolate confectionery whereas in the summers it’s the sugar confectionery, wine gums etc,” he says. Even though he does not have a large number of children coming into the store, hanging bag products such as Haribo perform well. He’s unsure whether the market for sugar-free confectionery will take off. “When people buy sugar confectionery, they are not thinking about health,” he says.
With only 250sq ft, Robert Teal doesn’t have a lot of room to play with in his Barnsley store, Vitesse Quickservice News and Food, in South Yorkshire. Nevertheless, sugar confectionery - which he sources from Hancocks - is still a core category. “It’s a growing market,” he says. Bassett’s Cherry Drops roll performs very well, as do sharing bags. “We currently have five rolls for 99p on offer, but it depends on what we can buy.” He believes there is a market for sugar-free, especially if they are extensions of major brands. “Yes, especially sugar-free products that aren’t priced as super premium. Sugar-free tends to be more expensive. I think a mainstream priced sugar-free would be good.”
With almost 100% penetration and one of the biggest per capita consumption rates in Europe, the UK has always been a good market for sugar confectionery. But with the spotlight trained on children’s health, and stiff competition from other impulse categories, manufacturers have plenty to chew over. Despite the challenges, it’s still a core component of the c-store mix, as its performance at Hancocks demonstrates: sugar confectionery accounts for 3,000 of the cash and carry’s 5,000 confectionery lines and generates 60% of sales. “It continues to achieve steady growth of 2.8% in a climate of extreme competition,” says Hancocks purchasing director Richard Brittle. “Chocolate grows at just 2.3% so sugar confectionery, at £1.9bn, is definitely an important sector of the £6.2bn confectionery market.” However, as Natalie Croft, senior consultant at marketing consultancy Clear points out, as more information enters the public domain via government and the Foods Standards Agency, so demand for healthier options will increase. The key will be producing new product development that satisfies parents’ concerns about nutrition without turning off the target audience - children. SUGAR FREE, VALUE LADEN
Croft says one of the best examples of a brand that has tapped into the health trend but is still delivering bags of taste and fun and kid appeal is Chupa Chups. “It leads with sugar- free lollipops and communicates messages like ‘sucking is good for you’,” she says. In fact, following the success of its sugar-free lollipop Cremosa last year, Chupa Chups has launched Cuore di Frutta, an orange flavoured snack containing fewer calories, 35% of the recommended daily allowance of Vitamin C and an alternative to conventional sugars and sweeteners that helps prevent tooth decay. Manufacturers have also been stripping out additives and infusing products with natural juices. In addition to launching its own sugar- free lolly, Nestlé Rowntree’s Fruit Pastilles, Fruit Gums, Jelly Tots and Tooty Frooties have undergone just such a reformulation, as has Leaf’s Chewits brand. Removing sugar and additives isn’t the only way for a manufacturer to play the health card. Walkers Nonsuch is promoting the potential benefits of the inclusion of Brazil nuts and sesame seeds - both of which are sources of protein and vitamins - in its new English Crocante product. PURCHASER PROFILES
However important the ‘better for you’ segment may become, we’re still a long way from all sugar confectionery purchases being driven by health, as research by Clear demonstrates. The consultancy has identified three basic pillars for kids’ products: taste, nutrition and fun. It has also come up with three definitions for the purchaser, which is usually Mum: health conscious (tend to choose products that focus on nutrition); permissive (tend to buy sweets that deliver on taste and fun); and pragmatic (tend to look for products that hit all three pillars). While retailers should stock ‘better for you’ options, they should not neglect conventional offerings, says Croft. “Some consumers such as permissive mums have bigger concerns and priorities [than health]. While they may eventually start to pick up some confectionery products that are better for their kids, their concern is giving the kids what they want. It’s really down to pester power and giving in to make their own lives easier.” Just how strong is the market for ‘better for you’ sugar confectionery remains to be seen. “You can do sugar-free, you can go for vitamin-enhanced products, but these are all niche markets. At the end of the day, consumers want standard gums and jelly products and they want to be informed about the contents,” says Christian Freund, marketing manager at Haribo. The priority for Haribo is to educate consumers and take a responsible marketing stance, and that means not advertising to children under seven and ensuring there are clear nutritional guidelines on pack. A glance at the list of top selling loose sweets at Hancocks confirms fun and novelty is top of the agenda for children. Current favourites include Brainlickers, Toxic Waste and Toilet Candy, and a new product Lickety Lips has just been launched. This year’s emerging trend, however is ‘retro’, says Brittle. He says: “Old favourites such as rosy apples, flying saucers (voted the nation’s No. 1 sweet in a recent poll), candy necklaces, ABC letters and bulls eyes are all seeing a tremendous growth in popularity. Teenagers and students are finding these classic sweets for the first time while the older generations are taking a trip down memory lane.”
KIDS THE KEY AUDIENCE
Kids are sugar confectionery’s key audience. According to Mintel, 38% of parents of children aged five to nine keep a stock of sweets at home for treats and 28% of people with children in the same age group purchase sugar confectionery as part of their weekly shop. However, the number of under-10s is shrinking
Leaf’s strategy for its Chewits brand, which was relaunched this year, is to appeal to children in the 11-14 age group while retaining the current brand appeal among five to 10-year-olds. Similarly, over the years, Haribo has also widened its net and today not only targets children but students and young adults too.
Some brands, of course, already have a loyal mature audience and are continuing to invest in their brands.
Werther’s Original and Campino both launched limited editions this year - Werther’s Original butter mints and Campino cherries & cream. Meanwhile, Cadbury Trebor Bassett’s (CTB) brought the Lion sports mixture and Lion midget gems under the Maynards name in a move which it expects will bring new consumers to the popular hard gum brands in 215g bags - an important format for the category, accounting for 51% of sales, says Mike Tipping, head of customer relations for CTB.
He suggests retailers should dual merchandise the products. “For example, by pairing sharing bags, like Liquorice Allsorts, with wine or DVDs, retailers can not only make shopping easier for their customers but also help to increase their sales through increased visibility and maximise cross purchase opportunities,” he says.
Nestlé Rowntree trade communications manager Graham Walker agrees hanging bags are a growth area, with sales up by about 20% in 2004. “By stocking the Nestlé Rowntree hanging bag range and displaying it on the ‘Grab a Bag’ stand, retailers can see uplift in sales of up to 50% versus a standard priced range,” he says. Similarly, Hancocks offers a kids’ prepack stand which holds 24 bags, and with an rrp of 39p each or three for 99p they can get a margin of nearly 40%. Don’t forget loose sweets, urges Brittle, as these can offer margins of 70%. With the right merchandising unit such as Hancocks’ one metre wide, 24-bin pick and mix, product can fly, he says. “Customers are finding that if they present their selection effectively and are proactive toward new trends and flavours, they can achieve strong sales from a very small area. Stores close to a school need to adjust their range accordingly, whereas those with a good amount of student and adult customers would do well to take advantage of the ‘retro’ trend.”
NEW PRODUCTS
Rowntrees is launching a sugar-free lolly in three flavours: strawberry, blackcurrant and orange with an rrp of 28p. It’s also reformulating its pocket money range as part of its ‘get real’ initiative to contain real fruit juice and no artificial colours or flavours. A new 10p product, Rowntrees Giant Bugs, joins the portfolio along with a new 20p line Rowntrees Beetles and Butterflies pack. Two new hanging bags will also roll out in the summer - Rowntrees Jungle Mix and Rowntrees Scary Sours in 195g bags, rrp £1.07. All products are being supported with a £1m media campaign and themed pos. Zed Candy has relaunched Fizz Bombs nearly 30 years after the product first hit UK shelves. Fizz Bombs come in five flavours and are presented in high-impact metallic foil packs featuring brand graphics and packed into a 20-unit display. Rrp 30p.
Ashbury has relaunched the Needlers bagged range and added new lines including Full o’ Fruits, Milky Splitz and Toffee Twists. The products are said to offer good margins and deals which could include a free merchandising stand. There will also be a three-for-two offer on all products during the launch. Rrp £1.19. Vivil has added two new sugar-free products to its portfolio - Crème Life Classics, available in strawberry, raspberry, blueberry and caramel, and Latte Macchiato. Both come in 140g bags with an rrp of £1.49.
RETAILER VIEW
Mr Patel gives over two to three metres to sugar confectionery in his White Hart Lane outlet, Pat’s Food Store, in north London. “In the winter, consumers go more for chocolate confectionery whereas in the summers it’s the sugar confectionery, wine gums etc,” he says. Even though he does not have a large number of children coming into the store, hanging bag products such as Haribo perform well. He’s unsure whether the market for sugar-free confectionery will take off. “When people buy sugar confectionery, they are not thinking about health,” he says.
With only 250sq ft, Robert Teal doesn’t have a lot of room to play with in his Barnsley store, Vitesse Quickservice News and Food, in South Yorkshire. Nevertheless, sugar confectionery - which he sources from Hancocks - is still a core category. “It’s a growing market,” he says. Bassett’s Cherry Drops roll performs very well, as do sharing bags. “We currently have five rolls for 99p on offer, but it depends on what we can buy.” He believes there is a market for sugar-free, especially if they are extensions of major brands. “Yes, especially sugar-free products that aren’t priced as super premium. Sugar-free tends to be more expensive. I think a mainstream priced sugar-free would be good.”
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