However, Keynote’s latest Confectionery Report has noted that cash-strapped UK consumers are frustrated by reduced weight, higher priced products and could turn to cheaper supermarket brands.
The report claims that confectioners can adapt to preserve sales by price-marking products and embarking on interactive online campaigns.
Economic trends
“GDP remains volatile,” said the report of the UK market.
“Many economists expect a double-dip recession in the first half of 2012. Though the confectionery industry did well in 2011, Key Note expects that, if the economy worsens, it will eventually take its toll on the industry, particularly on value sales,” it continued.
The report said that UK unemployment stats continued to rise, allowing value confectionery to gain prominence while putting pressure on manufacturers to lower retail prices.
How then can confectioners keep sales rolling?
Price marked opportunity
One way, Keynote suggests is by placing the price of products on the packaging.
“Consumers respond positively to price-marked packs,” said Keynote.
The report pointed to research by Him! which found that 71% of consumers are more likely to buy price-marked packs as they are perceived to represent better value.
All the leading UK confectioners have reacted. Last year, Cadbury price-marked its top selling countlines: Twirl, Dairy Milk, Wispa and Dairy Milk, while Mars started putting a 49p tag its core range, including Snickers, Twix and Mars bars.
Nestlé has also picked up on the trend. In January 2011, it launched its Orange Aero Chocolate in both price-marked and non-price marked packs. The company later indicated that the price marked packs in particular were flying off shelves.
Create buzz on social media
Another way for confectioners to stand out is through social media, said Keynote.
“The rise of interactive campaigns is energising the confectionery market on a whole new level,” said Keynote.
The report noted that many of these campaigns had nothing to do with the product, such as Cadbury’s ‘Keep Signing Keep Team GB pumped’ campaign and Moam’s ‘Music Mixer, but could aid brand development.
Benefits from engagement
Manufacturers can also obtain valuable consumer insights they’d normally have to pay top dollar for, it added. Nestlé, for example, discovered demand for a new flavour formulation after its Kit Kat ‘Choose a Chunky Champion’ campaign invited consumers to select its favourite new flavour.
The industry leaders are also using smart phone technology to reach consumers. Mars, Nestlé and Cadbury have all been using the interactive Blippar app to engage consumers. Smart phone users with the Blippar app can for example point their phone at a Cadbury’s chocolate and play the interactive game “Quack Smack”.
Threats
Keynote also noted a potential industry threat in cash-strapped times. It said that although the confectionery segment had not been hit as hard, supermarket own-brands were proving fierce competition in other sectors.
The report noted how Mark’s And Spencer’s Percy Pigs had impacted the UK sugar confectionery market, and added that other cheap supermarket products could start to impact other areas, once retailers achieve similar quality.
The report also warned that manufacturers trying to keep input costs low by reducing the weight of their products while keeping the same price tag could soon suffer hits to their consumer loyalty.
Source:
Keynote Market Report 2012 Confectionery, 30th Edition, March 2012
ISBN 978-1-84729-843-0
Edited by Katie Hughes
