Chocolate spread: refine and survive
Action is needed for a sector that suffers from overcrowding, heavy price cutting and poor support
New Year's resolutions may include a pledge to shed a few pounds but consumers always find it difficult to override their taste for sweet products.
Looking at ways to capitalise on the public's love of chocolate and boost chocolate spread consumption is essential if the sector, worth more than £13m [ACNielsen], is to grow against a background of heavy price cutting and a dearth of support.
Ferrero UK believes that a proliferation of cheaper own label products has contributed to the devaluation of the sector, while some tertiary brands have confused the sector and the consumer.
"There is no rationale for such overcrowding in the market and it makes sense for retailers to apply one of the key rules of category management refine your range and stock the brand leader plus one own label alternative," says a spokesman.
The company claims its Nutella smooth chocolate and hazelnut spread has 44% of the market and growth of 11% year on year. New for 2001 is a 750g jar to sit alongside its 400g, 200g and 25g sizes.
Efforts to enliven an unexciting category and bring in younger consumers resulted in a link last summer with the world's favourite dysfunctional TV family, The Simpsons. That, Ferrero says, contributed to Nutella's share rising by 5% to 49% during the promotional period, while the chocolate spreads category as a whole grew 12%. The company's major agreement with licence owner Fox to use The Simpsons will continue throughout 2001 across the whole range.
Increasing usage in kids' lunchboxes and as a cooking ingredient are ways to stretch the brand further, and these too will be targeted, with further support planned in addition to the company's sponsorship of the Youth Sport Trust.
Chivers Hartley brand marketing controller Yvonne Adam admits that chocolate spreads is an area that would benefit from innovation. "We are looking at different flavours and packaging formats, but this won't be until the spring."
Its Cadbury's Smoooth chocolate spread appeals to kids via its wacky cartoon characters. The range was recently extended to include a chocolate and fudge variant.
Renshaw Scotts' 12 week promotion on its Scotts Mississippi Mud chocolate spread gave consumers "more mud for their money" by promoting its 400g Mississippi Mud with 75% extra free.
"It's not something we could do all the time," says product manager Nigel Scott. "The category is suffering a paucity of promotional slots and EDLP continues. But we decided to embrace this as an opportunity to inject value."
Streamline Foods sees a niche in the market for organic, and new for 2001 will be organic chocolate hazelnut and smooth chocolate spreads.
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