The sugar confectionery sector is the star performer, with big brands and gum proving powerhouses
Sugar is sweet. That is the reality for UK retailers, with the sugar confectionery market generating more sales than ever before. Information Resources values the total sugar confectionery market at £906.5m in terms of value sales (52 w/e August 11, 2002), an increase of 0.7% on the previous year. And when gum is included in the mix, the figure climbs to over £1bn, and the rate of growth accelerates too.
Anne Hollamby, head of marketing at Bendicks, comments: "The UK confectionery market is being driven primarily by sugar confectionery, with gum showing the highest growth in the entire market at 13% MAT."
Manufacturers have been watching this trend closely, reacting with new products, brand extensions and high value advertising campaigns.
"Sugar confectionery is definitely the sector to look out for", says Sam McElligott, trade relations manager at Masterfoods.
"Market trends show that the UK is beginning to mirror the market in the US ­ where sales of sugar sweets are the same as chocolate."
McElligott says the sugar sector is also mimicking what's happening in the chocolate sector, where sales are dominated by the big brands. Sales of the top 10 sugar singles grew by 10% in 2001, McElligott points out, and accounted for 40% of sugar sales.
Cadbury, which accounts for just over 20% of the market, agrees it is the branded sugar lines that are pushing up sales. "Within the sugar market Cadbury Trebor Bassett has seen growth in the branded sector driven by innovative product development," says a Cadbury spokesperson.
While sugar confectionery is divided into several sub-sectors, one notable trend, particularly in the multiple grocery sector, has been the surge in demand for large hanging bags of sugar sweets. According to Masterfoods [Information Resources data], sales of big bags of sugar sweets tripled in 2001, while Haribo says sugar confectionery bags are now worth nearly £400m [ACNielsen]. Bendicks says Werther's Original is now the top selling sugar hanging bag [ACNielsen]. The brand has a value growth rate of 73%, which the company puts down to the introduction of Original Chewy Toffees, launched in September last year.
Bendicks also produces another hanging bag heavyweight, Campino, worth more than £11m at rsp.
Meanwhile, Haribo says within the bagged sector, gums and jellies is one of the biggest and fastest growing categories, with value sales up 4.1% to £238m over the past year.
Haribo's managing director Helmut Mager says multiple grocers were quick to spot the trend towards bagged lines, giving the sector much support.
"As a result, multiple grocers now account for around 60% of the value of the gums and jellies market in the UK, and two-thirds of its volume sales ­ with both continuing to grow year-on-year," says Mager, who believes the market for bagged confectionery lines hasn't peaked yet. "I think this is something we'll see even more of over the next few years," he says.
Other major manufacturers to launch into this market this year include Masterfoods with its Starburst Sea Monsters and Nestlé ’owntree, with three new hanging bags under the Wonka brand name and the new Rowntrees Fruit Rush.