ConfectionerySector Report

On a typical day, one billion people around

the world eat chocolate. Most shoppers are

driven by value, with chocolate viewed as an

affordable treat. But an increasing number

are also seeking luxury.

According to research, 62% of all shoppers

in-store will enter the confectionery zone. With ‘Indulgence’ and ‘Fun & Enjoyment‘ identified as being key catalysts for sales growth, it is important for brands to create POP displays that reinforce these characteristics in-store.

As a result, there is a continuously high level of innovation within POP display in the category. Put simply, POP creativity remains a vital ingredient to help brands serve up appetising results for shoppers and on the bottom line.

Introduction

The Irish Confectionery Market

The World’s Biggest Chocolate ConsumersPounds of chocolate consumed per capita each year

According to a 2015 figures by Statista, Ireland has the third biggest chocolate consumers in the world per capita, behind Switzerland and Germany.  

Switzerland

Germany

Ireland

United Kingdom

Norway

Sweden

Australia

Netherlands

United States

France

19.8 lbs

17.4 lbs

16.3 lbs

16.3 lbs

14.6 lbs

11.9 lbs

10.8 lbs

10.4 lbs

9.5 lbs

9.3 lbs

The Irish Confectionery Market

Chocolate confectionery

€621mEstimated total chocolate confectionery sales in 2015.(Source: Euromonitor)

New product developments and strong marketing and advertising campaigns by the major players continue to drive growth. Mondelez Ireland remains the market leader, with a value share of 42%, thanks in large part to the strength of its Cadbury brand. It also continued to see a strong performance in seasonal chocolate and boxed assortments.

The Irish Confectionery Market

Sugar confectionery

€196m The estimated total value of sugar confectionery sales in Ireland during 2015.(Source: Euromonitor)

It is a category in decline and is expected to be valued at just €180 million by 2020. Substitute products and the onset of private label and discounting are having a negative impact on the category. Mondelez Ireland continues to be the leader in the sector, with a value share

of 33%.

Confectionery in retail

Checkout banThe ban on advertising of foods that are high in fat, salt and sugar during children’s TV programming in Ireland has impacted how confectionery brands could promote to the key children’s market. In-store, Tesco announced a ban on sweets at the

checkout which came into effect at the start of January 2015. Whilst the announcement attracted a lot of media headlines, Irish retailer Superquinn got there first, doing so some

30 years ago.

However, despite new legislation, the move by Tesco, and lobbying from Superquinn founder, Feargal Quinn, to date no further government measures have been introduced, with responsibility being placed squarely on consumers to reduce consumption, as opposed to encouraging or requiring manufacturers to address the issue.

In a survey for Lidl, 68% of parents said they were pestered by their children for chocolate at the checkout, and 66% gave in some or all of the time.

Confectionery Shoppers

The €1 price point is five times more important to confectionery than €2.

49% of confectionery was sold on promotion in 2015.

Half (49%) of all female chocolate eaters eat chocolate

as a comfort food compared with

just one in three (33%) men.

30% of confectionery shoppers buy

because of promotional activity.

24% of shoppers say eating chocolate makes them feel guilty.

22% of chocolate shoppers look for healthier product

choices in-store.

Shoppers go big for bite-size

Shoppers continue to snap up bite-size varieties in larger, re-sealable bags that allow them to save money, as well as managing consumption. This also reflects what Mars identifies as a need to cut costs with a ‘big night at home’, without sacrificing quality.

In the UK, sales of bite-size confectionery has grown by more than 40% since 2009. As a result, in-store display increasingly has to be focused on communicating messages around sharing and value.

Confectionery Shoppers

Confectionery Shoppers

ConvenienceConvenience remains a key channel for children, being the outlets where they spend their much valued pocket money and represents nearly half of the kids category

(IRI, Defined Kids Sugar Confectionery).

Over 21% of all snacks consumed in Ireland are chocolate, with two thirds of this is made up of milk chocolate. Convenient access to a treat or sugar boost (“minutes of happiness”) is still hugely important to shoppers.

According to research, 33% of shoppers say that PMPs (Price-marked packs) help to not only make pricing clearer and more transparency, but also to make the hunt for value easier at the fixture. Communicating messages on POP relating to value, as well as portion control remain key.

Confectionery Shoppers

The push for poshThe growing demand for gourmet and quality products in confectionery (“moments of happiness”) is a key trend. Premium brand Lindt has seen sales increase by 65% over the past five years. With higher price points, lower weights, and higher quality ingredients, they give the consumer the option to indulge without overindulging, while providing them with a great food experience.

The impact of this from a retail marketer perspective is likely to be a move towards more equally premium looking point-of-purchase solutions, taking cues from sectors such as health and beauty as well as artisan

beverage (tea and coffee) brands that have launched in recent years.

Key Trend

The rise of the male consumerAs highlighted by a recent report in The Grocer, when it comes to confectionery, sweets are for kids; chocolate is for women. Traditional category messages around indulgences, femininity or tongue-in-cheek ‘not for girls’ laddish humour means that brands in the sector have yet to tap into

potential sales from the sophisticated man about town.

For this reason, a growing number of brands could begin focusing on the introduction of more sophisticated male-orientated chocolate lines and promoting a greater

sense of discovery through in-store POP messaging to attract this potentially lucrative shopper audience.

Key Trend

CustomisationA report by KPMG (Taste of the Future), predicts that customisation is poised to be embraced more widely by major confectionery brands. Mars has been customising M&Ms since 2004, whilst Cadbury allows shoppers to create personalised wrappers online. As

a solution it feels somewhat dated compared to Coca-Cola’s highly engaging personlised in-store bottle campaign. Meanwhile, Nestle’s Maison Cailler brand offers a unique profiling system that shoppers can use to discover their ‘chocolate personality’.

In Denmark, Mondelez-owned brand, Marabou, encouraged customers to rename chocolate bars to reflect why they buy them. During the month-long campaign, sales rose by 24%. Shoppers could print a free sticker in-store to add to their chocolate bar. Over 4,700 stickers were printed. Twice a week,

Marabou chose the most original names, winning their creators a giant bar of chocolate.

Key Trend

NostalgiaAn increasingly popular way for brands to connect with shoppers is by tapping into

the past. It has seen a number of product

lines revived in recent years, including Cadbury’s Wispa.

Through introducing playful, childlike elements into POP displays, marketers can play on positive shoppers associations

with long-held memories of consuming confectionery transporting them back in

time with interactive displays that engage

and deliver a sense of wonder, the use of beloved real-life figures, mascots, and taglines. Such elements can also be incorporated in new ways to connect with

younger audiences as well.

Sales of confectionery grew by 6% during Christmas 2015, whilst Halloween is the third largest season outside of Christmas and Easter for confectionery, with more than €30m of confectionery estimated to be sold in the four weeks run up to Halloween. 

There is a continuing swing between promotional mechanics employed during key seasonal trading periods. In the lead up to Easter 2013 the total number of promotions run on Easter chocolate actually dropped by more than 25 per cent. In recent years, we have also begun to see a trend developing of a shift from Multibuy offers towards Price Reduction. Interestingly, last year highlighted an almost level split between the two with 373 Multibuy offers and 351 Price Reduction promotions (Source: Brandview).

Promotional Mechanics

Seasonal trading

Confectionery POP

Treats in-storeA large part of in-store POP execution within the sector is understandably about creating visual impact through both structural design and recognised branding cues that make displays instantly identifiable to the shopper.

But aesthetics and branding should not be-all and end-all. Instead, success also involves

understanding the purchase experience from a sensory perspective at each stage of the shopper journey, to understand which sensory triggers evoke which emotions, and why.

The need to better understand key triggers is particularly visible within categories such as boxed chocolate, with some brands choosing to position their displays as ‘unashamedly feminine’. An example of this was the in-store campaign by Nestlé for Mother’s Day 2015, reinforcing the brand’s association with being feminine and ‘gift worthy’.

One of the most obvious examples of the move by confectionery brands towards exploring the true limits of creating in-store theatre is the M&M’s World™ Store by Mars.

The M&M’s World Store Is perhaps an extreme example of retail marketing approaches within the sector. But even more conservative

of budgets, if invested in well-executed campaigns, can add value to brand equity and drive long-term purchase loyalty as this gondola end display for Cadbury, created to bring its Joyville campaign to life in-store, shows.

Taste of retail theatre

Product innovation increases during seasonal periods, with special edition products, seasonal packaging, and new flavours. In addition, a high degree

of brand-retailer collaboration takes place, reflected in shelf management and overall in-store execution.

It is imperative for brands and retailers to move beyond catching shopper attention with appealing packaging only, and create a strong connection with the shopper at the shelf with powerful messaging that touches them

at an emotional level.

With over 2 billion of the world’s population being overweight or obese, consumers are increasingly looking for healthier confectionery options. In addition, modern and fast paced lifestyles have made snacking the fourth meal of the day, thus consumers seek confectionery products that can be part of their daily diets.

A focus on higher quality, organic, and exotic ingredients, innovative product packaging, and enhanced in-store execution, are some of the ways retailers are positioning private labels as brands in their own right.

Retailers, in collaboration with brands, are increasing their efforts to ensure the confectionery category has a strong presence in all key areas of the store, thus catering to the impulse purchasing nature of the category.

1. Seasonality

2. Emotional Appeal

3. Health & Wellness

4. Premium & Desirable

5. Creating Consumption Occasions

Five key change drivers for in-store activation in the confectionery category

Smurfit Kappa DisplayUnit 17, Whitestown Industrial Estate, Tallaght, Dublin 24

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