Desiree Fung, custom research director for Planet Retail and Larry Wilson, vice president of customer relations, NCA, discussed major trends affecting the confections industry and global opportunities and sales in a webinar broadcast earlier this month. Fung said this spike in confection purchases linked to a major holiday is a global phenomenon, whether that holiday is Halloween in the U.S., Diwali in the Hindu tradition or Chinese New Year.
Other trends in addition to seasonal spending noted by Fung included
· “sharing the big night in" or consumer tendencies to seek entertainment at home during challenging economic times. Manufacturers responded by creating resealable ‘share bags’ containing movie-style candies designed for home consumption among a group or for a couple;
· nostalgia, or retro-sweet reintroductions will be a prominent factor driving sales in 2013. Fung says these sweet evoke memories consumers are keen to revisit, particularly in tough economic times. When consumers initiate a ‘push,’ as they did in 2008 requesting Cadbury return the nostalgic Wispa bar to the market in the U.K., the relaunch can generate robust sales in a short time frame. The company sold 1.2 million bars in the first week of its relaunch.
· enhancing brand identity through cross-promotional efforts. Companies can take iconic brands to a new level by ramping up branding efforts through specialized retail store presence in major locations (i.e. Hershey’s “Chocolate World" stores in China, Dubai, Singapore and the U.S.), offering factory tours, digital engagement campaigns, or general merchandising that pushes confections into new product categories
· and private label brands that are obtaining their own unique identity. Fung related that while consumers bought private label brands to economize, they have come to appreciate the quality, fun and variety in that segment. According to a Nielsen study, Fung said, 88% of shoppers globally intend to purchase private brands even once the economic climate improves.
Health and Wellness is a macro-trend affecting confection, with label claims of low sugar or no additives, says Fung, pushed by legislation related to the fight against obesity in multiple countries. She said consumers are demanding greater transparency in labeling and want more information related to choices. Manufacturers, Fung said are better off promoting moderate consumption while celebrating the role of confectionery for key occasions as an indulgent treat. “It is a category that must be handled responsibly," Fung said, “never posed as something to replace a full meal."
Wilson indicated while some of the top markets are saturated, growth is anticipated in emerging markets. Different types of products appeal more in certain markets than others, with the top five nations for chocolate sales represented by the U.S., the United Kingdom, Russia, Germany and Brazil. Gum sales on the other hand, are strongest in the U.S., followed by China, Brazil, Japan and Russia.
Wilson also cautioned manufacturers to be aware that increasingly, “stores without walls" or online purchases make up a larger portion of confectionery sales each year. More than one-quarter or 26% of global respondents to Nielsen’s “Global Digital Shopping Report" issued August, 2012, indicates they plan to purchase food and beverage products via an online connected device in the next three to six months—an increase from the 18% reported in 2010.
