Maybe it’s the credit crunch biting and the fear that consumers just won’t have the cash to flash this year, but according to Hancocks cash & carry purchasing director Richard Brittle, what is noticeable about Christmas 2008 is the focus on brand extensions and improvements to existing products with packaging changes and rebranding. Npd, it seems, is a little thinner on the ground than recent years.
Brittle says that the seasonal supermarket scramble may well also account for this. “I think that the companies are finding it difficult because of the pricing in the supermarkets,” he confirms.
To compete, he says, c-stores should be looking at products that fly under the radar of the multiples. He cites Walnut Whip six-packs as just such a product: “It’s a bit different, and not that well known, but those that stock it do well,” he points out.
Total market sales last year saw the impulse sector declining by -10% against an entire market up 2%, driven by the multiples (up 7% in value, AC Nielsen 17 weeks to end of December). This is why, says Brittle, c-stores need to differentiate themselves from the supermarkets and instead play to their strengths. He predicts that lines such as Galaxy Mistletoe Kisses, the Quality Street My Favourites range, and Cadbury Magical Elves will not be heavily price-squeezed in the multiples as they are individual impulse products, making them ideal for small stores.
While the market for total seasonal impulse is small at £7m, it is up overall by 179% and by 163% in the impulse sector at £4.4m. However, although the grocery multiples sector lags behind at £2.6m, it is growing by 211%.
Brittle also recommends Advent calendars as a strong stockline for c-stores because they are often not subjected to the kind of cut-price discounting applied to other Christmas confectionery products.
In fact, Brittle believes that despite the gloomy headlines retailers shouldn’t be too worried about the credit crunch affecting sales in this category. Confectionery is, after all, one of the cheapest treats and is often considered an inexpensive option as a gift. Says Brittle: “I’ve been through three recessions and confectionery always does well. People stop in but will still eat chocolate.”
However, he doesn’t think consumers will be buying as much premium confectionery this year and, as a result, Hancocks has cut back its premium range for Christmas 2008. Brittle believes £1 lines, such as Hancocks’ three new 300g cartons under the Kingsway label, will do well in c-stores. Also new and exclusive to the cash & carry at the £1 retail price are two 180g packs of Marandi nougat: peanut and fruit soft nougat 180g and chocolate- covered hazelnut soft nougat 180g.
Elizabeth Shaw managing director Malachy McReynolds agrees with Brittle that the credit crunch may well benefit certain sectors of the confectionery market. He says: “With most people keeping an eye on costs this Christmas we believe that there will be an increase in people seeking out affordable luxuries to enjoy at home, with friends, or to give as gifts. Our product portfolio fills that niche perfectly.”
To that end, Elizabeth Shaw has concentrated on its key product, Famous Names, but has also revamped Vodka Shots, which contain a liquid centre of a shot of vodka in neat, lemon or raspberry flavours. Other products for Christmas include Mint Crisp, Mint Selection, Clusters, Café Liqueur and Liqueur Truffles.
Nestlé is concentrating on improving existing products with its ‘Quality Product in Quality Packaging’ message, taking a fresh look at some of its core brands. In a bid to bring Quality Street to a younger audience, the Big Ones have now been rebranded as My Favourites with new variant My Caramel Swirl replacing Orange Crunch. Two My Caramel Swirls will also be available free in the Quality Street carton packs.
Also coming under the Quality Street brand for the first time is Nestlé’s Matchmakers. A sampling campaign and money-off coupons will support the change. The Quality Street brand as a whole will benefit from a £3m spend. My Favourites pos material includes an impulse unit to hook on the edge of shelves, a dumpbin and wobbler.
In the Nestlé Black Magic range, which was revamped last year, packs remain the same but the outers are now blue for standout. The brand will benefit from a £1.5m marketing spend this Christmas.
Other changes for the company include a new pack design for After Eight, which will also be available in a 50% extra-free format to drive sales early on in the season. And while the milk chocolate and 85% dark variant standalone packs have disappeared this year, they will appear in the new After Eight variety pack which also includes the white chocolate variant.
The entire range will benefit from a £3m media spend, focusing on the core 300g pack. Straws also get a new look, transforming from silver packaging to green.
In its children’s range Nestlé has launched two new Giant Tubes – Rowntree’s Pick & Mix and Blue Smarties – which brings the range to a total of eight.
In selection boxes Nestlé has reduced its packaging by 33%, but kept products the same size. The message that the company has cut the packaging but not the chocolate will be communicated in a £500,000 spend in women’s magazines and through a PR campaign featuring Nell McAndrew.
After a successful launch last year, Mars is returning Galaxy Mistletoe Kisses to the Christmas market. The bar is available from this month to capitalise on early sales in the run up to Christmas, and will feature improved packaging. The brand will be supported by a £1m media spend throughout the season, and a freestanding display and prefilled unit will be available to retailers.
Mars is also launching limited-edition Christmas packaging for Maltesers and Celebrations. The Maltesers 400g box has a ‘winter magic’ design and will be supported by a £1m media spend including TV ads. The large Celebrations carton also has a new design, with a large bow to denote a gift product.
New seasonal designs have also been added to tubes, sharing buckets and selection boxes.
Following up the Snickers campaign featuring Mr T, a selection box featuring the star wearing a Santa hat is added this year. In tubs the company has launched the Celebrations tub, a reusable, dishwasher-, freezer- and microwave-safe tub which trialled in Sainsbury’s last year and is available throughout the market for this Christmas.
Cadbury says that it has listened to consumer feedback on its 2007 range to come up with its core offer for this year. The company has redesigned its selection packs to give them a more seasonal feel using traditional red and white Christmas colours. The medium and large selection packs and the medium, lenticular Winter and Super selection boxes are recommended for small stores. And shelf-ready packaging has this year been colour-coded to reflect the differences in the box sizes.
The selection range includes Cadbury Dairy Milk, Elves, Cadbury Twirl and Cadbury Flake.
The company has also made a change to its Advent calendars after research showed that consumers were confused by the two existing SKUs. This year the calendars have been redesigned with younger images for Cadbury Dairy Milk calendars and a more traditional design for the Cadbury Dairy Milk Variety Miniatures.
Many of the major manufacturers will be publicising their green credentials in the Christmas season this year.
For example, Cadbury’s selection boxes will include trays made from recyclable materials.
Mars says its selection boxes, Advent calendars, Maltesers boxes and Celebrations large cartons are all made from 100% recycled cardboard. The company has introduced a recycled reindeer logo on products packaged in its recycled cardboard.
As well as reducing the size of its selection boxes, Nestlé packs are now made from recycled board with the plastic trays constructed from recycled bottles. The selection packs and Quality Street cartons will carry a message encouraging recycling.
The company says that it will have used 231 tonnes less packaging in 2008 than in 2007.
Kraft is hoping to capitalise on the success of its Terry’s Chocolate Orange variants with a new addition for Christmas 2008: Cracking Hazelnut.
A £2.5m media investment will back the launch, which begins in October. Dazzling Dark Mint Ball featuring Terry’s dark chocolate flavoured with peppermint oil also returns.
The Toblerone brand will be supported by a £4.1m marketing campaign throughout the Christmas period. Segsations and Toblerone One by One have also had a makeover for 2008. One by One is being rebranded as Toblerone Tinys with a new pack design. Segsations also features a new design with each chocolate personalised with one of 77 messages.
Bendicks says that its must-stocks for this year include the Bendicks Mint Collection which saw a 24% growth in independents last Christmas. Bittermints 200g and 400g boxes have a special-edition gift card for Christmas. Also in the range are Victorian Mints, White Chocolate Mints and Chocolate Mint Crisps. In twistwrap the company recommends Mingles. In the Werthers range, special-edition 350g gift jars are available for Butter Candy and Chewy Toffees.
Also putting money behind its brand this Christmas is Ferrero, which has dedicated £5m to support its Gifting Boxed Chocolate ranges, including Ferrero Rocher, Ferrero Collection and Ferrero Raffaelo. A new boxed chocolate range is planned for this year but details have yet to be released.
The campaign will include TV and press advertising as well as consumer sampling and online ads running from October to December. The ads will target 35- to 50-year-olds in a bid to promote boxed chocolates to a wider audience.
One retailer who is looking forward to Christmas this year is Depesh Patel from Quickmart, in Copthorne, West Sussex. Depesh says that despite being close to two other stores, he’s never yet been left with any confectionery stock after Christmas.
“We start stocking about two months before Christmas, displaying stock on a gondola in the middle of the shop, which is dedicated to Christmas stock.”
He uses two cash and carry outlets to get the best prices and finds he refills about once a week, stocking two of each confectionery product, including some smaller, unbranded lines.
“We like to give our customers options with some of the other stuff, but most of it is main brands; we always do well with Mars products.”
According to Depesh, his success comes from both customer loyalty and strong merchandising: “My mum is really good at making sure the display catches people’s attention. We put it next to the queue for the post office.”
Depesh says that the store usually runs out of stock the week before Christmas but he then restocks for Christmas Day. “There are always people who need last-minute boxes of chocolates – often husbands doing last-minute shopping.”