Open wide for healthier treats. Manufacturers know the drill now in the war on sugar and that means cleaning up their act
Sweet sales are going sour. In the past year, Brits have chewed and sucked their way through 2.8 million fewer kilos of sweets and gum [IRI 52 w/e 15 July 2017]. That’s a decline of 1.7%. Value sales are down 1.4% as prices have risen as a result of falling deals and wider inflationary pressures.
No prizes for guessing the overriding factor here. “Health has become increasingly important to consumers and is currently driving category development; consumer habits are changing and they are more conscious about what they eat and the amount of sugar they consume,” says Ana Baptista, head of corporate media relations at Nestlé, whose Rowntrees brand has suffered the greatest loss of the year in sugar confectionery, an eyewatering £4.8m, 0r 5.9%.
What’s in this report?
The growing volume of calls for the government to extend the sugar levy from soft drinks to sweets and chocolate, and measures by retailers to wean shoppers off sugar, are clearly having an impact on sales. But is this proof that Britain’s sweet tooth is being pulled as the war on sugar rumbles on? Or is the decline a symptom of a period of transition for the confectionery sector?
There are clear parallels between confectionery and soft drinks, which from next April will be subject to a sugar tax, imposing a 24p levy on every litre of pop containing 8g of sugar or more and 18p on every litre with between 5g and 7.9g.
And just as the impending levy has spurred soft drinks manufacturers to step up development of low and no-sugar alternatives, the mere threat of a similar tax on sweets (and, of course, falling sales) is encouraging confectioners to step up their efforts to cut the amount of sugar they use in their products.
“Consumers are more conscious about what they eat and the amount of sugar they consume”
“We want to help people snack more mindfully, while still being able to experience the joy of our products,” says Claire Molyneux, marketing manager for candy at Mondelez, whose Maynards Bassetts brand is up 2.3% on volumes up 9.6%, partly thanks to undercutting Rowntrees and emphasising its use of natural flavours and colours. “By 2020, we’ll reduce salt and saturated fat by 10%, as well as expanding portion control options (those containing 200kcal or less) by 25%.”
According to Mondelez’s research, adds Molyneux, there is another factor that has driven Maynards’ market-beating performance: consumers are now more aware of the sugar contained in its products thanks to clearly labelled calorie information and ingredients, and have benefited from the use of portionable formats.
Sweets: Winners & Losers
There is also a key difference between soft drinks and sugar confectionery. Soft drinks can be an indulgence, of course, but their primary purposes are varied (to slake a thirst, boost performance, etc), meaning that we are now seeing strong growth in unsweetened products such as bottled water and infusions. Confectionery, on the other hand, is by its very nature an indulgence; people eat it for one reason only: because it’s sweet.
“Ultimately consumers are making a conscious decision to indulge in a treat when they pick up a sugar confectionery product and our role is to give them the best possible quality product and experience,” says Andy Mutton, sales director Storck UK, which makes Werther’s Original. “We launched sugar-free products in 2009, addressing consumers’ need for sugar-free; Werther’s now has a 55.1% share of the sugar-free confectionery market.”
Mutton lays the blame for sugar confectionery’s decline at the door of the underperformance of some of the category’s biggest brands, which have relied on price to steal share from rivals. In the process, they’ve devalued the category. Werther’s has no such worries, according to Mutton, with 7.2% growth to £21.8m on volumes up 3.5% off the back of its successful Sugar Free Original variants, and a £4m TV advertising spend.
Tangerine Confectionery was one of the first to go sugar-free, with its Natural Sweet Shop range, which uses natural sweeteners including stevia instead of sugar. Tapping this trend, sugar confectionery and gum reported the highest growth rates in stevia-based NPD, up 125% in the second quarter of 2017, according to Mintel.
Others have been quick to follow suit. Nestlé has developed a new 30% Less Sugar range of Fruit Pastilles and Randoms. In June, Fudge Kitchen launched Sugar Free Peanut Brittle and Almond Bark using sugar replacement Zusto, which it claims delivers on sweetness and texture with a quarter of the calories of sugar and none of the aftertaste of many sugar substitutes. The product uses non-digestible, water-soluble fibres derived from natural substances, including corn and superfood chicory, with probiotic inulin, which provide a food source for good bacteria and substantially reduce calories, lowering blood sugar levels.
Mark Roberts, trade marketing manager for Perfetti van Melle, which makes Chupa Chups, Fruittella and Mentos, says that the overall decline in sugar confectionery is down to a combination of shoppers looking for healthier alternatives and seeking to reduce their sugar consumption. Added to that, he says, is the introduction of so-called ‘healthy snacking’ alternatives at the tills.
Could guilt-free sweets help drive sales?
Here’s another result of all the hoopla about how much sugar we eat: one in three Brits feel guilty after indulging their sweet tooth, up from one in five a year ago [Harris Interactive].
So we asked creative agency Isobel to come up with some concepts to make confectionery a slightly less guilty pleasure. Enter the Charity Sweet Shop and Half is Plenty, two ideas cooked up by Isobel’s creative team.
The Charity Sweet Shop (see above) would sell confectionery on behalf of charities in pop-up stalls in shopping centres and department stores. Think chewy brains for the Alzheimer’s Association and suckable bullets for War Child in pick ‘n’ mix-style bags allowing shoppers to satisfy their sweet tooth while helping a cause close to their heart.
“It could show up in a lot of amazing retail spaces and help bespoke charities,” says Christi Tronetti, marketing director at Isobel. “Consumers can go in, do their own pick & mix bags and with each selection donate a portion to charity. This could become reality; charities are always looking for attention and a voice.”
Half is Plenty Half Bars, meanwhile, are the chocolate bar everybody loves, cut straight down the middle. You still pay for the full thing, but half of the money goes to a good cause. “Visually it would be quite arresting,” says Tronetti. “People like to support brands that have a cause and there’s no reason candy can’t fall into that territory.Chocolate bars today are quite large anyway and we wanted to make people feel it’s OK to indulge.”
Appeasing consumers’ feelings of guilt by appealing to their social conscience isn’t as wacky as it sounds. Wrigley’s latest Starburst offering - limited-edition packs of the brand’s strawberry flavour Starburst - includes a deal with Asda as part of the supermarket’s Tickled Pink campaign, which raises money for two of the UK’s leading breast cancer charities.
Stripped from checkouts
“Retailers are leveraging on that by taking a lot of confectionery away from checkouts, which has had an adverse impact because of the impulse nature of the category,” says Roberts. “With less promotion and support that has obviously limited the level of penetration and consumption among shoppers.”
“Less promotion and support has limited the level of penetration and consumption”
As a result, Roberts says that Perfetti has focused its efforts on promoting sugar-free brands like Smint, with the introduction of Smint Clean Breath in March. The manufacturer also launched two variants of Fruittella 30% Less Sugar in January - strawberry and summer fruits - supported by a £1.5m marketing spend, with more than one million samples trialled this year, according to Roberts.
“As a manufacturer we know we have to reduce sugar in our products by 5% this year and 20% by 2020 to meet PHE guidelines, so we have a big part to play in helping consumers understand the effects of sugar and signposting them to the sugar-free and reduced sugar alternatives,” he says. “Therefore, we now have one sugar-free offering in each of our major brands, Mentos, Chupa Chups and Fruittella, as well as launching Fruittella 30% Less Sugar at the start of this year.”
“Parents can look at the packaging and understand easily what the ingredients are”
As in chocolate, some contend that confectioners need to tread a fine line when it comes to reformulation to ensure cutting sugar from recipes doesn’t impact taste. Mark Stangroom, director at Better Little Treats, owner of the YumEarth brand, says that using natural ingredients can help negate any adverse impact on taste.
“Our strapline ‘sweet on simple’ reflects the idea that parents can look at the packaging and understand easily what ingredients are in the products, and as one of the only confectionery brands in the UK that is free from all 14 common allergens, it means that children who might otherwise miss out can enjoy treats as their peers do,” says Stangroom. “The brand has also managed to harness other consumer trends - for example YumEarth has one of the only vegan jelly bean products in the UK.”
Growing demand for natural and animal-free products is influencing other players in the market too. In May, adult confectionery brand Candy Kittens revealed its plans to make its entire portfolio vegan friendly. With two variants already vegan-friendly - Sweet Pineapple and Sweet Peach - the brand said it wanted consistency across its whole selection. The changes would broaden Candy Kittens’ appeal to “the widest possible group of customers” said MD Ed Williams at the time of the announcement.
“People are following vegan diets for religious reasons, moral reasons, dietary reasons,” he said, adding that the range would be completely vegan in time for a brand relaunch early next year. “We’re taking so much time over this, so that the product is not just as good, but better. The texture of the vegan sweets is actually nicer than the gelatine sweets. It’s definitely a better product, and something we’re really excited about.”
With the ‘natural’ trend influencing sectors ranging from dairy to soft drinks , it stands to reason that confectionery brands and their competitors are getting in on the act. Dried fruit & veg snack brand Bear Nibbles might baulk at any associations with confectionery (rightly so, given that its products only contain fruit & veg), but you could argue its lines are increasingly using cues from this sector.
“Children love the fun associated with sour foods and have a higher preference for them”
The launch of Super Sour YoYos in February is a clear attempt to cash in on the trend for sour flavours that has been influencing candy NPD for a number of years. “Children love the fun that’s associated with sour foods and have a higher natural preference towards them, witnessed by the increasing emergence of sour recipes within confectionery,” said Emma Howgego, marketing director at Bear Nibbles, at the time of the launch. “As obesity and sugar consumption issues escalate, we’re more and more determined to find solutions that make healthy eating genuinely fun and accessible.”
Another confectioner that’s going down the natural route is Tangerine, which has added real fruit juice to its Wham and Fruit Salad chews, as well as refreshing the packaging of both these brands as well as Black Jack (which any 30-something Brit will remember from their childhood). Category & marketing director Russell Tanner says these brands are attracting adult shoppers by reminding them about the flavours of childhood.
Gum & Mints: Winners & Losers
“An important trend for us at Tangerine Confectionery is ‘kidulting’ - adults looking for ways to relive their childhood,” says Tanner. “Our Sweet Champions range capitalises on this trend both through the products, range of formats and also its advertising campaign, which provokes a sense of nostalgia among customers who remember them fondly from childhood.”
Sales in Tangerine Confectionery’s 200g Sweet Champions Assortment have also soared thanks to demand for sharing sweets, according to Tanner. He adds that the Sweet Champions Sharing Carton (a bumper selection of retro brands, including Dip Dab, Refreshers, Sherbet Fountain and Fruit Salad) has also capitalised on this growth market
Perfetti’s Roberts says that as one of the biggest growth areas in sugar confectionery, up 1.4% year on year currently, sharing bags remain a key priority, with the manufacturer reporting market-beating 9% year on year growth. However, he adds that brands should be wary of neglecting the on-the-go consumer.
“Sharing bags are still a big area of focus for us,” he says. “However, there is still a definite need for singles and multipacks, so we have to ensure that we remain relevant with the launch of limited-edition flavours and sugar-free offerings in singles.”
An overwhelming trend is the move towards the ‘big night in’. Research by Mintel found that one in five consumers now buy sweets for an evening in, highlighting the need for brands to drive visibility in-store and include sweets as a tie-in with associated products such as pizza and soft drinks.Wrigley’s confections marketing manager Dan Newell says that while confectionery remains an impulse buy, there has been a distinct shift from on the go to more eating at home. Sharing bags have also become increasingly popular, with consumers spending less on evenings out, choosing to stay at home instead, he says.
“Big nights in remain a key sales opportunity as consumers are more conscious of spending”
“With 47% of consumers spending less money on out-of-home entertainment and 50% eating less, the big night in remains a key sales opportunity, as consumers are more conscious of their spending,” says Newell. “Wrigley’s Skittles and Starburst are a vital offering for big night in with 60% of Skittles being consumed as an evening snack, overindexing total sugar confectionery.”
To meet this demand, Newell says that Skittles and Starburst are now available in hanging bag and sharing bag formats, including the July launch of the Limited Edition Starburst Strawberry 165g sharing bag exclusive to Asda. In order to boost sales further, he says that sharing bags should be merchandised in a clear dedicated display communicating the big night in occasion.
Sweets sour as sugar war rumbles on
- The performance of the sugar confectionery sector has been anything but sweet this past year as concern over the amount of sugar we consume has intensified and retailers have scaled back on deals.
- The only sector in growth is sugar fruits; even then most of the growth is a result of inflation (volumes have inched up by just 0.6%). All other sectors are in value decline with volumes flat or falling.
- There is one area showing promise, says Kantar analyst Charlotte Helary: low sugar. “Nestlé is championing its new recipe, reporting it tastes exactly the same with 40% less sugar, and Werther’s Sugar Free variants have seen big success.”
“Creating a destination that will draw shoppers into the fixture, and offering cross-category promotions, encourage incremental purchases,” he says. “Retailers should focus the display on products ideal for sharing such as Starburst Tear and Share pouches, which are individually wrapped and offer a variety of flavours for everyone to enjoy.”
Big Bear Confectionery’s marketing manager Andrew Ovens says that the move towards at-home sharing is being driven by Netflix, on-demand TV and at-home film streaming. Reflecting this, he says that the manufacturer has launched Poppets Movie Mix, a new larger 175g pack containing four flavours. “Traditionally Poppets are known as a boxed treat. However we offer Movie Mix in a pouch, which is much more in line with the category when it comes to snacking at home in the evening,” says Ovens. “With a PMP variant of £1, the assurance of value is a great incentive to purchase, particularly in the convenience sector.”
“Creating a destination that will draw shoppers into the fixture encourages purchases”
Growing reliance on the £1 price point is also driving this trend, with sharing bags typically selling for a round pound. This reflects the wider trend in grocery of fewer price promotions and the adoption of everyday low prices. The impact of this on the confectionery sector should not be underestimated, contends Haribo MD Herwig Vennekens, who says the brand is spending big on ensuring it has the right format mix at the right price.
“As an example, we’ve developed a range of portion-controlled options from 10p single-serve mini bags to larger sharing packs pre-portioned into single servings, which have been hugely successful,” says Vennekens. “Seventy-one per cent of our consumers believe smaller bags have enabled them to moderate the amount of sweets their children eat, while 62% of adults with children have improved their own diet as a result.”
Pop-up gallery: confectionery innovations 2017
Haribo has also updated its packaging to provide clearer guidance and a stronger ‘sharing’ message, with plans to introduce resealable sharing bags, according to Vennekens.
“We believe that having a variety of pack sizes available helps consumers to moderate what they eat by choosing the most appropriate pack size for their consumption occasion; whether that is enjoying our treats from a mini or impulse pack for one, or from our larger bags to share with friends and family,” he adds. “While promoting our top-selling brands remains a priority, we have an increased focus on showcasing the variety of formats we offer, including our smaller, portion-controlled treats - which is evident through our campaign Little Bags of Happy.”
The sharing trend is significant when discussing portion control and pack sizes. Research (including a 2015 report by the University of Cambridge) suggests that people tend to consume more food & drink when it is served in a larger pack. In 2014, a poll for The Grocer revealed that one in four consumers regularly consume confectionery sharing bags by themselves in one sitting. Even if brands specify portion size on a sharing bag, it’s clear that not everyone follows the advice.
“The removal of sugar confectionery from tills gave retailers cause to home in on events”
Big changes in the way confectionery is merchandised and promoted are also driving growth in the sharing trend. “The removal of confectionery from tills has given retailers even further cause to home in on product themes and events,” adds Tanner. “Grouping sharing packs and ‘big night in’ treats together, including drinks and other sharing snacks, is a great opportunity for retailers to cross-sell consumers’ trusted brands.”
With confectionery having checked out from the till points of most retailers in recent years, Nestlé says retailers should be promoting the category more to maintain sales. Baptista points out that with 64% of sugar confectionery picked up from the main product shelf compared with 30% on the end of aisle or at the tills, there’s a big opportunity to promote more heavily.
”Thirty-five per cent of consumers purchase sugar confectionery because it’s on deal”
“To further promote the sugar confectionery category, retailers can offer product promotions to increase volume sales,” she says. “Thirty-five per cent of consumers purchased sugar confectionery because it was on promotion, offering retailers a way to drive purchase interest.”
Price is clearly crucial, for consumers and confectioners. Many brands are also shrinking sharing bags in order to hit the right price and combat inflation. However, manufacturers such as Walkers say they have so far resisted making this move. “Walkers’ Nonsuch has maintained pack sizes across the range despite fluctuations in raw materials costs, while other brands have reduced sizes to suit price points,” says marketing director Emma Walker.
For those who don’t want to resort to price cuts and smaller packs to compete, the most obvious tactic to adopt is clear: good old-fashioned new product development, licensing deals and limited-edition flavours. Take Big Bear, which has focused on limited-edition variants in recent months. In June, Big Bear launched Fox’s Limited Edition Ice Cream Favourites, a sharing bag with four ice cream flavours aimed at summer holiday travel.
“Limited editions are a key tactic we have been employing this year to drive growth and spark interest in our brands,” says Ovens. “We are also reconsidering our packaging formats to cater for different eating occasions and to appeal to different consumers.”
The kids category has also captured the imagination, with Jelly Belly in August launching its new DC Super Hero Collection. Teaming up with Warner Bros, it created Batman, Superman and Wonder Woman branded bags in 28g and 60g formats, catering to both the snacking and sharing occasion.
Swizzels has also given Love Hearts a digital makeover with the launch of a new emoji-themed range. The 12 emoji designs in each pack include the smiley face, laughing face and crying face emoji, with the launch supported by a Share the Love social media campaign. “The way in which we communicate has changed over recent years,” says brand manager Claire Lee. “We felt that now was the perfect time for us to introduce more modern ways for people to share the love.”
Indeed, if there’s one thing sweets need right now, it’s a bit more love. And a little less sugar.
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Is our sweet tooth being pulled? Confectionery report 2017
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Is Britain's sweet tooth being pulled? Confectionery category report 2017