The health debate has finally caught up with the sugar confectionery market and this, combined with a worrying lack of innovation in sugar confectionery, has led to poor sales during the past year.
While TNS says the overall confectionery market is in growth, for the most part sugar confectionery is in the doldrums.
The sugar market is broken down into fruits, candy, mints, toffees and medicated. Of these five sub-sectors, only sugar candy is currently heading in the right direction with 7.9% growth taking it up to £147m.
Nestlé Rowntree’s sales communications manager Graham Walker believes that the overall sugar confectionery market has struggled as
many manufacturers, including Rowntree, have spent much of the past year trying to get to grips with what parents want to give their kids as treats. As such, for most of the year any real landmark innovation has been missing.
Walker explains: “It has been obvious that serious innovation has been needed in the sugar confectionery market for some time. However, a lot of innovations can be rushed out without enough work and therefore they do not create the right kind of longevity.”
It is for this reason, he says, that Rowntree took its time with its own key innovation this year when it relaunched its entire Rowntree range with the strapline ‘Get Real’ in June.
He says the message emphasises the commitment that Rowntree has made to removing all artificial colours and flavours from its products. “So far the feedback we have had from parents has been great. They are impressed that we are able to offer permissible options.”
Tony Camp, MD at Leaf UK, maker of Chewits, agrees that manufacturers have to take health more seriously but that cannot be allowed to take too much away from what sweets are about.
“As manufacturers we have to consider how we engage both parents and kids. To say that sweets are a treat and therefore shouldn’t be considered in terms of health is just laziness. We have to look at the trends and what consumers are asking for. This means taking out hydrogenated fats, using real fruit juice and reducing sugar. But if you take all the sugar out of a sweet than what are you left with? Taste remains vitally important.”
If manufacturers are still getting to grips with what consumers are looking for in terms of the health issue, then one way of attracting consumers to the category is getting the packaging right. As companies become more aware of different eating occasions, such as in the car, sharing while watching a DVD or simply impulse, it is key that consumers are able to find what they are looking for quickly.
This becomes even more relevant as, according to Camp, the average consumer spends just three seconds at the sugar confectionery fixture. This explains why the makers of sugar confectionery have been quick to embrace the potential benefits of Shelf Ready Packaging (SRP).
Leaf, Rowntree and Haribo, with the launch of its Starlets brand in September, have all enjoyed an upturn in sales thanks to SRP, while Fox’s Confectionery is set to employ shelf ready outers this month when it launches its Fox’s Glacier Garden Fruits. Fox’s marketing manager Tracey Wilson says these outers will allow for easier merchandising, while new formats are a basic tool that can be used to attract a new audience or encourage a greater rate of repeat purchase.
When it comes to the confectionery itself there are two dominant trends. The rise of sour sweets continues unabated while manufacturers are also looking at supplying more adult-oriented confectionery.
Commenting on the launch this year of Sour Spiders and Scary Sours, Walker says: “At the moment is just seems that kids want even sourer products - the sourer the better it seems.”
Cadbury Trebor Bassett’s head of customer relations, Mike Tipping, says that Maynards Sours, which were launched in 2003, continue to attract new buyers to the category. In June, Haribo extended its Strawbs range into the sour arena with the 200g bag line Sour Strawbs while Chewits, which is 40 years old this year, has come up with Xtremely Sour Apple and Xtremely Hot Lime Chewits.
A telling sign that many companies are now looking towards a more grown-up customer is reflected by the fact that Fox’s is to stop producing its jellies range in a bid to concentrate on its boiled lines.
This has not proved an issue for Haribo as, according to MD Per Henérius, its consumers are simply growing up with the brand. He explains: “Our products have a very broad appeal and are eaten by consumers from five to 45 years old. The audience is getting older and it is important to try to appeal to teenagers and students who can drift away from the confectionery market if nothing appeals.”
Adult confectionery is certainly an area with a great deal of investment in terms of marketing and NPD. In May, Fox’s launched XXXTREME, a fruit-flavoured sweet infused with taurine and caffeine inspired by the success of the energy drinks market.
Masterfoods has already enjoyed success with its Aquadrops and intends to invest £2.7m in the brand in the second half of 2005.
Andrea Taylor, Masterfoods trade relations manager, says: “Aquadrops is a key player in the non-medicated purposeful sugar market and we are continuing to support it this year and next.” A further £2.7m spend is already earmarked for the brand for 2006.
Better times are ahead for sugar confectionery, according to Walker. “When it comes to talking about the confectionery market, this time next year I am confident that sales will have improved and we will no longer be
talking about a lack of innovation.”
However, he argues that it will be the larger companies willing to look to the medium to long term that will have the most success.
“There are hundreds of sugar confectionery companies, but too often they come up with brands that only work in the short term. For true success it takes time to build brands and create innovative products that will be sustainable,” he says.
Camp believes that it is the strength of brands such as Chewits and Starburst from Masterfoods that allows for successful innovation. “New brands often struggle to cut the mustard. Brands with heritage have a greater chance of achieving long-term growth,” he suggests.
Henérius, however, maintains that the industry still has some way to go to get back on track. He warns: “The market isn’t dormant in terms of product launches, but there’s more focus on looking at what competitors are doing and following suit rather than creating fresh ideas.
“Innovation is the lifeblood of fmcg companies. If the confectionery market is to get back into growth, companies will have to invest in developing products and brands that will excite consumers and keep them coming back for more. It’s got to be a continuous process.”