Price drives growth: chocolate by value
Top eight chocolate confectionery sectors by value
     
  Value (£m) % y-o-y
Countlines (Exc CBCLs)   499.4 1.2
Bagged Selflines   448.1 3.7
Boxed Selflines   346.6 11.1
Milk Moulded   272.7 2.2
Shell Eggs   241.5 10.5
Twist Wrap Assortments   224.0 5.9
Milk Moulded Recipe   208.3 1.5
Plain+Plain Recipe   127.8 12.2
     
Source: Kantar Worldpanel, 52 w/e 17th June 2018    
     
Branded vs Own Label  
  Value (£m) % change
Branded 2,519.9 3.8
Own Label 393.2 9.8

Chocolate experienced value growth of 4.6% this year, outperforming the average in confectionery by 0.1 percentage points and the total fmcg sector by 1.2pp. The average price of chocolate, which increased by 3.7% this year, was the key driver of growth. The dominant effect of price gains is also reflected in the fact shoppers only purchased 0.8% more in volume terms this year. 

We're consuming chocolate differently this year. Snacking occasions are driving the decline of chocolate consumption (down 1.5% overall, and down 4.1% in snacking). Overall we're snacking more than we did last year (up 0.9%) but chocolate is being chosen less. 

Promotions are still proving to be the less popular strategy. Chocolate's share of on-promotion spending declined by 0.2pp, suggesting that retailers are continuing to focus on everyday low pricing. 

With price gains eating away at shoppers' wallets, it comes as no surprise that own label is sprinting ahead of brands with growth rates of 9.8% (more than double that of brands). However, shoppers are looking for luxury and indulgence, with premium brands Green & Black's and Ferrero growing at a faster pace than even own label at 14% and 11% respectively. 

Rachel Woolf, Kantar Worldpanel

Top ten chocolate brands
Top ten chocolate confectionery brands 
     
  Value (£m) % y-o-y
Cadbury Dairy Milk 505.5 -1.3%
Galaxy 211.4 1.4%
Maltesers 180.5 9.1%
Lindt Lindor 125.0 8.4%
Kinder 118.0 -3.8%
Cadbury Twirl 92.9 2.0%
Kit Kat 92.9 1.8%
M&Ms 92.8 8.7%
Celebrations 91.4 3.9%
Cadbury Wispa 84.2 3.6%
     
Source: Nielsen 52 w/e 4th August 2018    

Rising prices have kept Britain’s confectionery spend on an upward trajectory. The average confectionery consumer now spends £135 on the category annually, according to Nielsen. That’s £2.75 more than last year.

Part of this may be down to the growing appetite for premium products. Lindt had one of the strongest percentage growths in the top 10, adding just shy of £10m to its value, and Green & Black’s had a strong year despite being outside the top 10.

Growth was more muted in mainstream brands such as Cadbury Dairy Milk, which lost nearly £7m, and Galaxy, which grew by £3m.

That said, Cadbury isn’t resting on its laurels. This summer has not only seen the UK launch of Cadbury Darkmilk but also the announcement of a 30% reduced sugar Dairy Milk. Cadbury has also gone big on advertising with its ‘Go Madbury’ campaign, which invites consumers to invent their own Dairy Milk variant.

Maltesers enjoyed a particularly strong year, having brought out the much anticipated ‘flat Malteser’, or Maltesers Buttons. It also unveiled Maltesers Truffles in a bid to move into the gifting market.

In terms of formats, the ‘more to share’ sharing bags format has grown by 73%, according to Nielsen, adding an extra £27m in sales. This has become a battleground among Mondelez, Mars and Nestlé, who have used their power brands to encourage purchases.

Shopper satisfaction in retailer chocolate confectionery range  
             
Product Appeal Tesco Sainsbury's Asda Morrisons Aldi Lidl
Quality 73.3% 85.0% 81.8% 78.2% 88.0% 84.3%
Range 80.2% 83.3% 83.7% 84.7% 84.0% 78.4%
New ideas 36.8% 46.5% 46.8% 41.2% 46.0% 58.8%

Quality is the most important factor to consumers when buying chocolate confectionery, ahead of price. In this area, all retailers have performed fairly well in terms of shopper satisfaction, with Aldi leading the way thanks to premium-looking options such as Moser Roth. 

The prevalence of big-name brands in chocolate makes it hard for retailers to perform well on new ideas, says Jeremy Garlick, partner at Insight Traction. However, he says Aldi and Lidl "compete well with their own brand" despite limited space. Moser Roth includes a cherry mousse variant, for example, and Lidl's JD Gross combines a high cocoa content with a number of flavours.

Source: Shopper Intelligence, survey of 21,109 UK category shoppers July 2017

Shopper Intelligence is an annual multi category, multi retailer survey of UK shoppers. Enquiries to www.shopperintelligence.com.