Sugar Tax

Chocolate is a fast-moving category. In a recent issue of Retail Express, Tamara Birch found out the latest trends retailers need to cater for

The indulgent year

Chocolate is a convenience store staple. In fact, the category has the third highest basket penetration and accounts for 75% of total value sales. The past 12 months have been a successful year for chocolate as people looked to comfort themselves and indulge.

“The chocolate category continues to perform well over the course of the pandemic as shoppers seek out treats from well-known brands to cheer themselves up,” says Mark Walker, sales director at Swizzels. Susan Nash, trade communications manager at Mondelez International, echoes this and says: “In uncertain times, consumers look for reassurance and brands they know and love. Consumers can trust in category-leading brands, such as Cadbury, to deliver on familiarity and taste.”

In the height of the pandemic, many retailers commented on how snacking was at an all-time high. As a result, chocolate sales were up, especially sharing formats.

Katy Clark, head of marketing at Ritter Sport UK & IRE, says that while Covid-19 affected on-the-go sales in chocolate, there was an uplift in multipacks. “At-home snacking has been driven by multipacks and larger sharing formats as people turned to comforts and ‘big’ nights in became the norm,” she says. As we come out of lockdown, however, suppliers are expecting missions to be driven by celebration and outdoor socialising.

“With the new vaccination, there is a sense of hope and people are looking forward to the possibility of spending more time together. This may still be in smaller groups, but we anticipate shoppers wanting to market events, making them even more special and gift loved ones with affordable luxuries, like chocolate,” says Levi Boorer, customer development director at Ferrero. Plan any seasonal events likely to have an uplift in sales early to make sure you’re prepared and dedicate a promotional bay to the occasion. This will make it easy to spot and drive impulse purchases. Start by buying a calendar and marking up key sales opportunities so you don’t miss out.

Health and free-from

While retailers have continuously reported that health isn’t a factor in chocolate, the pandemic has shone a light on the importance of good health. While the obvious choice is choosing reduced sugar, this isn’t always the case. Many are switching to calorie counting and will make sure a chocolate bar will fit in their daily calories.

Ritter Sport’s Katy Clark says: “Portion control packs are one of the ways brands can help consumers make informed choices and manage their calorie intake.” While on the go is still making a comeback, single formats could serve a purpose for portion control, so make sure to maintain availability and use PoS accordingly. Lines, such as Mars Wrigley’s 100-calorie Mars, Twix and Snickers bars are ideal to help you cater to those buying smaller portions.

Dark chocolate is also gaining traction. “As we mature, our taste preferences change and many older consumers prefer the high cocoa hit of dark chocolate brands, such as Darkmilk, which offers the best of both worlds,” Mondelez’s Susan Nash says. Suppliers have been jumping on the dark chocolate bandwagon. Nestlé Confectionery launched Aero Dark & Milk earlier this year, which contains 51% cocoa and 49% milk.

While health is becoming prominent, offering an alternative is vital to achieving high sales and long-term loyalty. “Veganism continues to be a hugely influential trend that brands are responding to with new products as well,” says Clark. Above all, though, the top purchasing decision is taste, which is something shoppers are not willing to compromise on. “Eighty-seven per cent of consumers agree taste is the most important factor when purchasing chocolate, with a similar amount stating they prefer to have a smaller amount of regular chocolate than a larger amount of low-sugar.

Retailer viewpoint: Sasi Patel, Go Local Rochdale, Greater Manchester

“During the winter, chocolate is a great product to stock because everyone wants comfort. In the summer, it’s not the best-seller because it’s hard to maintain the standard you want – but it never stops selling. “Everything has become orange these days, and it’s great. We’ve also tapped into white chocolate trends. Dark chocolate has made an entry in the past 12 months with health-conscious shoppers and the elderly.

“Chocolate is an important space, and I dedicated five metres to the category. I stock sharing blocks and single formats beneath them.

“US chocolate is massive right now. In fact, I’ve invested £700 into bringing a US range in and they’ve worked, even considering the price of these products is astronomically high compared with UK products.

“For example, a KitKat from the UK is 80p, but one from the US is £2.50. The main differences are the size and the flavours.”

Premium brands and sustainable products

Pack sizes remain crucial to driving chocolate sales this year, but Ferrero’s Levi Boorer says premium boxed confectionery will also be important. “The category has shown resilience during tough times and It’s important retailers offer the right pack formats to suit basket size and shopper missions.

“Furthermore, we advise retailers continue to back the brands that they know shoppers will purchase, ensuring they’re offering a number of premium brands,” he says. Shoppers have been trading up over the past 12 months due to being unable to spend money elsewhere, and as businesses start to open up and they can see their loved ones again, trade up will likely continue. In fact, premium is growing in value by 7.4%, according to Oliver Steward, customer category manager, at Nestlé Confectionery.

“Retailers can capitalise on this growing area by stocking up on key packs, such as Aero Darker Milk, and merchandise on-shelf towards the top of the fixture as this is where shoppers look to trade up, and also look for secondary siting opportunities alongside categories associated with sharing and gifting such as cards, BWS and flowers,” he says. As a result, make sure to have a gift section in store, or stock a premium brand, such as Ferrero Rocher 300g, to drive spend.

On top of premium products, shoppers are choosing lines that have been ethically sourced. According to Hames Chocolate, customers have become more aware of how their food is made and the impact this has on the environment. A spokesperson said: “As a result, buying sustainably sourced products is a a purchase driver. Consumers
will, therefore, be looking for products that are recognised by sustainable farming organisations, such as Cocoa Horizons and Rainforest Alliance.”

Supplier view: Oliver Steward, customer category manager, Nestlé Confectionery

“While it’s evident that sales of chocolate singles have declined in convenience stores during the pandemic, we believe the easing of lockdown, along with engaging activity from manufacturers will boost singles sales.

“Retailers can also increase confectionery sales by ensuring they have merchandised the category effectively. The most popular shopping missions for the chocolate category are top-up (46%), treat (18%), meal occasions (11%), food to go (11%) and newsagents (8%). Creating mission-led merchandising in-store, such as locating the singles fixture adjacent to food to go, enables retailers to increase basket spend.”

Top products

Cadbury Dairy Milk
Although not a new product, the Cadbury Dairy Milk range did undergo a package refresh. The new look reflects on the brand’s vision from founder John Cadbury. The pack’s new look includes a redrawn Cadbury wordmark, a new Dairy Milk logo. The new pack design is based on the original Dairy Milk packaging, which aims to drive further standout on shelf.

Green & Black’s
Green & Black’s Organic tablets has received a new package design to help encourage trade up in the category. The design also includes a category-first intensity scale, located on front of pack, and aims to help guide consumers through the range and encourage them to discover the right product suited to their taste preference.

Drumstick Chocolate
Drumstick Chocolate is a new concept for Swizzels and combines the brand’s drumstick lolly encased in milk chocolate. The chocolate bar is filled with a raspberry and milk fondant centre and real raspberry pieces. Available to convenience stores in a standard pack format, Drumstick Chocolate will also be launched as a PMP later this year.

Ritter Sport
Ritter Sport has a wide range of products available, including the recently launched Mini Pouches. The Ritter Sport Mini Pouches contain under 100 calories per square, aiming to help retailers capitalise on the growing demand for low-sugar chocolate.

Nestlé Confectionery ‘Win a staycation’ promotion
Nestlé Confectionery has launched a ‘Win a staycation’ competition on its single formats, including KitKat, Aero and Yorkie. Available on all packs now, shoppers have the chance to win an up to £1,500 staycation until 27 June. The campaign will be supported by a £500,000 digital and outdoor campaign.

Aero Dark & Milk
Aero Dark & Milk is available in a £1 90g sharing bar and is made with 51% cocoa and 49% milk chocolate. Hannah Smithson, brand manager for Aero at Nestlé Confectionery, says: “Aero has grown by more than 30% in value over the past year, while dark chocolate is also experiencing higher after becoming increasingly popular with UK consumers in recent years.”

Galaxy Orange Block and Fusions
Galaxy Orange Block and Fusions by Mars Wrigley UK aim to expand on the growing popular of orange in confectionery, which has grown by 20% in the past two years. Galaxy Orange is available in a large block, single formats and PMPs. Galaxy Fusion will be available in late 2021.

Ferrero Collection
People turn to the brands they know and love during times of uncertainty, according to Boorer. “Our range of premium established brands – Ferrero Rocher, Ferrero Collection, Reffaello and Thorntons – offers consumers high quality treats or gifts, which we know are in demand and suit the growth of the ‘big night in’ occasion, too,” he says.

This feature appeared in the 4 May issue of Retail Express. To get the latest issue, click here