Sales of block chocolate jumped 7.3% year-on-year [TNS 15 June 2008], significantly outperforming overall confectionery, which grew just 3%, well below inflation. Recipe block chocolate, which includes products such as Dairy Milk with Caramel and Fruit & Nut did even better, growing 7.9% in the last year. Volumes increased by 4.1% and 3.9% respectively.
The growth in value comes despite an 11.4% rise in the price of the leading countline, Cadbury Dairy Milk, and a reduction in its pack size. Some attribute the success to Cadbury’s gorilla ad. But in the battle of the block chocolate brands, Galaxy’s partnership with Sex and the City also appeared successful. Sales of Galaxy grew 12% over the past year, while Dairy Milk only rose 2% [TNS Brands Survey].
“I’m not surprised to see Galaxy gaining ground over Cadbury,” said Don Williams, CEO of brand consultants Pi Global. “It has captured and strengthened a similar emotive territory to that which Cadbury used to own.”
But Galaxy’s success could also come from a much-increased promotional spend by Mars. Assosia data show Mars, along with Nestlé, substantially upping the number of lines on promotion in supermarkets’ paid-for featured space. Mars’ promotional space rose 47% and Nestlé’s 12%. Cadbury reduced its promotional space 12%, which perhaps accounts for its healthy margin growth this year of 210 basis points. In 2006-7 there were 188 Dairy Milk promotions against 21 on Galaxy. In 2007-8, this had shifted to 109 vs. 74.
“Mars and Nestlé have upped their presence on gondola ends in response to Cadbury’s previous dominance,” said Assosia MD Kay Staniland. “As Cadbury had organic sales growth of 7%, it seems its strategy is paying off.”