Choc watching
As healthy eating grips swathes of the UK population, the one category you would think would be suffering would be confectionery.
But the situation is far from desperate. The latest Taylor Nelson Sofres combined panel data indicates that the UK confectionery market worth £4.2bn is down just 2.6% in volume year-on-year and up 3.6% in value.
Firms have even turned the healthy angle to their advantage, a trend that a spokeswoman for Leatherhead Food Research (LFR) highlights: "Nestlé Rowntree's Randoms achieved sales of £4.9M since May 2009 and Cadbury's The Natural Confectionery Company [marketed as free of artificial colours, flavours and preservatives] has seen sales rise fivefold in 2009 so far (total sales £9.5M)."
In addition, she says there's a "growing demand for 'better-for-you' confectionery". Items fitting this bracket boast overall health benefits, such as antioxidant properties.
There's also a cross-over in the form of fruit-based snacks, an area Zetar is exploring with its Humzinger and Fruit Factory brands.
Real fruit juice flavouring
In sugar confectionery, healthy eating is prompting more companies to use real fruit juice for flavouring, according to Mintel's 2009 UK Confectionery report. A classic example of this was Cadbury's February launch of Bassetts Allsorts Red Liquorice made with fruit juice, natural colours and flavours.
Haribo Fruity Frutti launched earlier this year adds a twist to the theme by combining jelly, foam and liquid fruit filling.
Breakthroughs in sourcing natural ingredients continue to help confectioners. Last month, Food Manufacture reported Chr Hansen's launch of CapColors White 100 WSS-P, which it claims is the first 'all natural' white food colour for products such as chewing gum. The colouring contains calcium carbonate as an alternative to titanium oxide (E171).
Elsewhere, LFR has created creamy fillings for chocolate by adding hydrocolloids to 'water in oil' emulsions. It is also exploring cryo crystallisation to reduce saturated fat.
The interplay between good-for-you and premium has been well-documented, but as the recession has deepened, the ascendance of premium has become more marked. "Expect a rise in the number of premium offerings, particularly in chocolate, through consumers trading up to more expensive, organic and single-origin varieties, and through limited editions and re-branding," says the Leatherhead spokeswoman. "The global market for premium chocolate is estimated at over $9bn in 2009, growing at 1520%."
Chocolate provides an ideal platform for innovation. A glance at the TNS data confirms that while chocolate as a whole is down 3.4% in volume year-on-year, almost all sub-categories exhibiting any growth are chocolate in nature.
The biggest growth area is milk assorted chocolates, which has grown year-on-year by 45% to £34M and 38.3% in volume, although still occupies only 0.8% of the market. Hot on its heels is the mini egg format, which has grown 24.8% in value and 15.8% in volume. Milk and plain assortment chocolates grew 13.2% in value and 5.1% in volume in the year to October 5. The only two other sectors achieving double digit growth are shell eggs and twist wrap assortments.
The future of confectionery is definitely golden brown for Nestlé, which inaugurated its Chocolate Centre of Excellence in Broc, Switzerland in September. It says the facility will "spearhead its drive in the premium and luxury chocolate segment, which in turn will influence the firm's entire chocolate range."
The premium trend lay behind Cadbury's September launch of two Koko by Cadbury eggs for the female gifting sector. And earlier this year luxury chocolate maker Montezuma's installed a new production line at its factory in Chichester to boost capacity amid talks of diversifying into new areas in 2010.
Some straddle premium and value for money. As David Williams, non-executive chairman of Zetar said in its full year results to April 30 this year: "While consumers continue to purchase indulgent products in recessionary times, value for money proposals increasingly became their top priority. The [confectionery] division responded quickly to this shift in consumer demand by engaging in more promotional activity and developing high volume lower margin products, while still maintaining a balance with our more indulgent products."
For Haribo md Herwig Vennekens, the key lies in providing quality for money. "Rewarding brands offer quality at an affordable price," he says. "We think it might be to do with the recessionary environment." In addition to the use of fruit juice in its gums and jellies, Vennekens says Haribo sees mileage in niche markets such as vegetarian consumers. "We are investigating a new product for vegetarians. We do countlines products sold in drums. In that range it has been number one for a considerable period, so we thought, why not make it available in a bagged format."
Overall, chocolate, premium indulgence and healthier formulations are the watchwords for 2010. If you can find a point of difference at a reasonable price, you're halfway there. FM
