Notes of keynote confectionery 2011 report


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From 2006 to 2010:
• Sales of confectionery increased by 14% to £5.03bn.
• Chocolate sales rose by 17%.
• New product development (NPD) has been limited in recent years. Brands have produced their existing products in different formats, for example, as miniatures, or improved and modified the recipes of existing products. For example Nestlé and Cadbury used more organic and fair-trade ingredients.
• The market value is predicted to rise as the input costs are raising (price of cocoa and sugar + added tax: VAT).
• Even is the level of UK market penetration is increasing, the potential for growth is limited.
• The confectionary industry reacted quickly to the economic downturn by meliorating the value proposition and the number of promotions and discounts in order to attract cash-strapped consumers = the industry is unscathed.

1. Market Size:
2. Market Trends:
3. UK Chocolate Confectionery Sector:
4. UK Sugar Confectionery sector:

1. Employment
2. Distribution
3. Consumption
4. Key associations:

1. Brand strategy
2. Cadbury Ltd (Owned by Kraft since 2010)
Brands selection:
• Flake:
• Green & Black’s:
• Halls Soothers:
• Wishes:
• Wispa:
3. Kraft Foods UK Ltd
Main Brands:
• Milka
• Terry’s Chocolate Orange
4. Mars/Wrigley
Main Brands:
• Bite-size:
• Galaxy:
• Wrigley Extra:
5. Nestle
Brands selection:
• Aero:
• Polo:
• Rowntree:

1. Strengths
2. Weakness
3. Opportunities
4. Threats

V Buying Behaviour

VI Future trends

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Notes of keynote confectionery 2011 report

  1. 1. Keynote Confectionery 2011 report: Nestle, Kraft Food, MarsSUMMARYFrom 2006 to 2010: • Sales of confectionery increased by 14% to £5.03bn. • Chocolate sales rose by 17%. • New product development (NPD) has been limited in recent years. Brands have produced their existing products in different formats, for example, as miniatures, or improved and modified the recipes of existing products. For example Nestlé and Cadbury used more organic and fair-trade ingredients. • The market value is predicted to rise as the input costs are raising (price of cocoa and sugar + added tax: VAT). • Even is the level of UK market penetration is increasing, the potential for growth is limited. • The confectionary industry reacted quickly to the economic downturn by meliorating the value proposition and the number of promotions and discounts in order to attract cash-strapped consumers = the industry is unscathed.CONTENT I MARKET DEFINITION 1. Market Size: 2. Market Trends: 3. UK Chocolate Confectionery Sector: 4. UK Sugar Confectionery sector: II INDUSTRY BACKGROUND 1. Employment 2. Distribution 3. Consumption 4. Key associations: III COMPETITORS 1. Brand strategy 2. Cadbury Ltd (Owned by Kraft since 2010) Brands selection: • Flake: • Green & Black’s: • Halls Soothers: • Wishes: • Wispa: 3. Kraft Foods UK Ltd Main Brands: • Milka • Terry’s Chocolate Orange 4. Mars/Wrigley Main Brands: • Bite-size: ever-bitesize-promotion • Galaxy: • Wrigley Extra: 5. Nestle Brands selection: • Aero: • Polo: • Rowntree:
  2. 2. IV SWOT 1. Strengths 2. Weakness 3. Opportunities 4. Threats V Buying Behaviour VI Future trendsI MARKET DEFINITIONIn the Keynote report, the confectionary market is defined as follow:Confectionery market= chocolate + sugar confectioneries confectioneries.Chocolate confectionaries are defined as Count lines, Sharing bags, Blocks and Other, excluding chocolate Count-lines,biscuits and cereal bars. (I think Keynote s I should have defined the market as SNACK rather thanconfectionary including the cereal bars because they are direct substitutes to chocolate count e count-lines.)The UK has one of the world’s largest confectionery markets. Brands that are manufactured in the UK, suchas Cadbury, are international bestsellers.The population of the UK reached 62.2 million in 2010, up by 0.7% from 61.8 million in 2009. This should bypositively encourage wider demand for confectionery products.The amount spent on confectionery has risen at a relatively steady rate since 2006 and its share of the foodmarket has increased in size over the same period. In 2010, Key Note has estimated that the confectionery samemarket increased its share of the overall food market to 10.4%.Since confectionery products are generally considered to be treats or luxuries, the first first-world, westerncountries tend to have the highest level of consumption. Despite this, Nestlé announced plans to establish avea research and development (R&D) centre in India — one of the world’s fastest-growing economies — in growingorder to better understand and target developing markets.I.1 Market Size:UK sales of confectionery rose by an estimated 14%, reaching the £5bn mark for the first time in 2010 dueto higher prices of ingredients, as well as significant developments and innovations in the fruit sweetscategory following market trends.I.2 Market Trends:SharingRecession = save money= stay home = in-home entertainment (DVDs, iPods or computer games) = Shift hometowards ‘nights in’ over ‘nights out’ which, in turn, has increased occasions for sharing For example sharing.Cadbury released Crunchie Rocks and Nestlé released sharing formats of its Smarties and Rolos Rolos.
  3. 3. Healthier EatingDue to information published recently by the Food Standards Agency (FSA) that recommended voluntarytargets for manufacturers to follow in order to reduce the amount of unhealthy ingredients, h amount healthy eatingoptions are becoming increasingly popular leading to increased investment in this particular area.For example Cadbury’s took over the Natural Confectionery Company which manufactures sweets withoutartificial colourings or flavourings.Input Cost RisesThe price of cocoa increased by 369.9% from $774 per tonne at the beginning of the 2000 2000-2001 season to$3,637 per tonne in December 2009 according to t International Cocoa Organisation (ICCO). The cost of thesugar and palm oil also increased in 2010 2010.To delay passing price increases onto customers Cadbury reduced its 140 gram (g) bar of Dairy Milk to 120g Cadbury(removing two squares), but kept the price the same.Ethical SourcingAfter an intense campaign against it (KiKat Killer), Nestlé promised that it will source all of its palm oil from KiKat Killer),sustainable sources by 2015. Cadbury had already converted its Dairy Milk bars to 100% fair-trade in 2009.Mars pledged that its entire range of products would be made using sustainably sourced cocoa by 2020. sustainably-sourced
  4. 4. I.3 UK Chocolate Confectionery Sector:Count-lines such as Mars’s Snickers and Cadbury’s Crunchie:Key Note estimates that the count-lines subsector was worth £1.62bn in 2010, giving it a sector share of43.3%.The rising production costs observed in recent years have affected this subsector in particular.In October 2010, The Grocer revealed that Cadbury and Nestlé were to increase their recommended retailprices by up to 7% across some of their most popular lines, including Dairy Milk, Wispa and Yorkie.New product development (NPD) in this subsector has been fairly limited in recent years, with most newproducts being extensions of established brands or formats. Entirely new products are expensive todevelop and promote. Less risk is therefore involved in producing reformulations of existing products,particularly in times of financial instability.Sharing Bags such as Cadbury’s Heroes and Nestlé’s Quality Street:Key Note has estimated that the boxed chocolates and sharing bags subsector was worth £1.09bn,accounting for 29.3% of total chocolate confectionery sales in 2010.The majority of boxed chocolates are bought as formal gifts and come in a layered format, examples ofwhich include Cadbury’s Milk Tray and Lindt’s Swiss Tradition range. These gifts tend to be bought forseasonal occasions, such as Christmas, Valentine’s Day or Mother’s Day, as well as on other specialoccasions, such as birthdays or for parties.Blocks and moulded bars such as Cadbury Dairy Milk or Galaxy chocolate:Key Note’s predicts that this subsector increased in value by 2.7% from £711m in 2009 to £730m in 2010,accounting for 19.6% of the chocolate confectionery sector in the latter year.Much of the value growth in this subsector has been down to the increasing popularity of premiumproducts with higher cocoa content or organic ingredients. The sharing qualities of large chocolate barshave been overshadowed by the popularity of sharing bags
  5. 5. I.4 UK Sugar Confectionery sector:The sugar confectionery market increased in value by 1.1% from £268m in 2009 to an estimated £271m in2010.In 2010, leading suppliers, Haribo and Rowntree, substantially invested in their product portfolios, withboth companies introducing natural flavours and ingredients, such as fruit juices, while also replacingartificial additives with natural colourings. These changes have improved the health credentials of suchproducts, thus appealing to parents who are concerned about the level of unhealthy ingredients used insweet confectionery, particularly since children are the major consumers of these types of products.Fruit Sweets such as Fruitella and Haribo products.This subsector experienced an estimated growth of 6.6% in 2010 to £518m, up from £486m in 2009.Chewing and Bubblegum such as Trident and Extra:Key Note estimated that the chewing and bubblegum sector decreased by approximately 1.4% in 2010 to£340m, due to poorer than average sales.The focus has returned to mint-flavoured gums more recently, which are seen as simpler and moreeffective products. Wrigley has reverted to marketing its Extra brand as a breath freshenerMintsKey Note has estimated that the mints market was worth approximately £168m in 2010, giving it a marketshare of 13%.Although still popular among older age groups, penetration in the under-24s category is in decline in favourof other options, such as chewing gum.II INDUSTRY BACKGROUNDSince the UK exited recession in late 2009, however, a renewed interest in premium branded chocolateconfectionery has been seen as consumer confidence has improved, while household expenditure on foodhas consistently increased at a higher rate than inflation.The UK confectionery market comprises a relatively small number of companies (290). Although only 22.4%of the companies operating in the UK confectionery market are large enterprises (reporting a turnover £1mor more in 2010), these companies are likely to be major global players which dominate industry.II.1 EmploymentOf the 290 enterprises engaged in the manufacture of cocoa, chocolate and sugar confectionery, half (50%)employed four people or less, while more than two-thirds (69%) employed fewer than 10 people. Thissuggests that most businesses in the industry are smaller in size, in terms of both turnover and workforce.The majority of manufacturing operations in the industry relies heavily on plant machinery, which meansthat manual labour is now almost non-existent, keeping employee numbers low.II.2 DistributionThe four leading supermarket chains in the UK dominate the retail distribution of all groceries, includingconfectionery. In the week ending 28th November 2010, Tesco, ASDA, Sainsbury’s and Morrisonsaccounted for over three-quarters (76.1%) of all UK grocery sales, with Tesco representing 30.7% alone.Data from the 2010 edition of the National Statistics publication Family Spending revealed that 61.8% ofchocolate and confectionery purchases were made in large supermarket chains, while purchases transactedin other outlets accounted for 38.2%.II.3 ConsumptionData collated by Kantar Media data revealed that 17.9% of UK adults consumed chocolate bars three to sixtimes a week in the year ending September 2010, indicating that the chocolate confectionery market has avery large and loyal consumer base. Given the recession and the subsequent slow recovery, thisdemonstrates an incredibly robust market.
  6. 6. II.4 Key associations:CAOBISCOThe Association of Chocolate, Biscuit and Confectionery Industries of the EU represents over 2,000companies engaged in the manufacture of chocolate, biscuits and confectionery.FPAThe Food Processors Association is part of the FDF and was formed as an umbrella group for four separatesector associations in 2008, including: 1. Pickles and Sauces Association (PSA) 2. Soup, Gravy and Produce Processors Association (SGPPA) 3. UK Sweet Spreads Association (UKSSA) 4. Deserts and Cake Mixes AssociationICCOThe International Cocoa Organisation is a global organisation, which represents both cocoa-producing andcocoa-consuming nations as members.ICAThe International Confectionery Association claims to bring together the interests of the globalconfectionery industry and represents and promotes these interests internationally.III COMPETITORSCadbury (owned by Kraft), Nestlé and Mars are currently the major players dominating the UKconfectionery market.An article published in The Grocer in October 2010, hinted at the acquisition of the US Hershey brand byNestlé was in response to the newly-formed Kraft/ Cadbury conglomerate, as well as the Mars/Wrigleyalliance, which left Nestlé with a vastly reduced market share.III.1 Brand strategyAdvertising plays a major role in supporting confectionery brands and maintaining brand loyalty. Amultitude of confectionery products are launched on the market every year, making the industryincreasingly competitive.In 2010, advertising expenditure rose dramatically, with all sectors reporting increases over the 2 years.Expenditure on sugar confectionery increased by 128% and recorded the second-highest media spend in2010, after being fifth in 2009. The chocolate bars and count-lines sector registered the greatest level ofmedia expenditure, after increasing by 30.8% to reach £66.7m in 2010.After observing poor sales in 2009, chewing gum manufacturers appeared willing to spend more onadvertising in order to bolster sales; after a media spend of £9.3m was reported in 2010, up by 14.7% on2009.Confectionery is an industry in which marketing is among the most sophisticated in the world and serves tothrow consumer focus away from price and towards product quality and brand loyalty.III.2 Cadbury Ltd (Owned by Kraft since 2010)Company Structure:Cadbury Ltd operates in both the chocolate and sugar confectionery markets.It manufactures branded confectionery and beverages, including the internationally-successful Cadburychocolate brand. The company also manufactures dark chocolate under the Bourneville name, as well assupplying Maynards, Trebor and Basset sugar confectionery. The company owns the chewing gum brandTrident and manufactures the medicated sweet, Halls Soothers.Developments:Cadbury reduced its packaging by 35% for its 2010 Easter egg range in order to improve its ‘green’credentials.
  7. 7. Cadbury also launched a £50m advertising plan in 2010 as part of its official sponsorship of the London2012 Olympic Games and new product innovations, such as Caramel Bunnies.On 28th February 2011, the company began its ‘Fairtrade Fortnight’, after Cadbury announced that itplanned to donate 20% of total sales from its fairtrade products to charity in order to fund a program thatwould give Ghanaian cocoa farmers solar panels.Brands:Cadbury’s Spots v Stripes 2-year promotional campaign for the London 2012 Olympic and ParalympicGames have dominated the company’s brand strategy since 2010. The packaging of Cadbury’s Dairy Milk,Crunchie, Wispa, Dairy Milk Caramel, Twirl and Double Decker products has been turned either spotted orstriped, so that consumers can chose a particular ’team. 1. Big Race Bar: limited-edition product part of the company’s 2-year Olympics Spots v Stripes promotional campaign and replaces the limited-edition Challenge Bars 2. Bliss Bar: vanilla mousse centre bar targeted women ‘the perfect treat for the ladies’. 3. Caramel Nibbles: (small Dairy Milk chocolate buttons filled with caramel) 4. Challenge Bar: (Three striped chunks, three spotted chunks and one plain chunk in the middle) 5. Creme Eggs: Cadbury’s longest build-up to Easter since the Second World War. Cadbury hoped that the flurry of early promotional activity would allow them to beat 2010 sales of Creme Egg, which grew by 6.2% on 2009 levels to £48.9m, according to Symphony IRI. 6. Crunchie Rocks: new sharing bag format which included bite-sized pieces of the popular count-line 7. Dairy Milk : Cadbury price-marked its range of single Dairy Milk bars, including Cadbury Dairy Milk, Cadbury Dairy Milk Caramel, Cadbury Dairy Milk Fruit & Nut, and Cadbury Dairy Milk Whole Nut at 45p. Cadbury’s new advertisements feature the singer Paolo Nutini. Nutini leant his voice to the debut album of Cadbury Dairy Milk’s Fairtrade-supporting label, Glass and a Half Full Records, for the 2010 ‘Fairtrade Fortnight’ scheme Big Swap Songs. 8. Flake: Red lipstick kisses were featured on packs and consumers were offered the chance to win one of a million Benefit lipsticks. Cadbury replaced its previous ‘Only the Crumbliest, Flakiest’ campaign with a television advert that featured a girl in a yellow Anthony Price-designed dress, an analogy for the Flake bar. 9. Fry’s Cream: For the first time in two decades, Cadbury gave its Fry’s Cream chocolate bar range a new packaging featuring the brands 1761 launch date. 10. Green & Black’s: Green & Black’s announced that it intended to switch its full range of chocolate products to fairtrade, a move which is due to be completed by the end of 2011. In September 2010, Green & Black’s chocolate was named the coolest food brand in the UK for the fourth year in a row by Cool Brands, which ranks thousands of brands each year according to style, innovation, desirability and originality. 11. Halls Soothers: In January 2011, Cadbury launched a £1m marketing campaign for its Halls Soothers sore throat sweets. 12. Heroes: “Lifting the lid on a cardboard box just doesn’t have the same emotive symbolism as the tin, which often takes pride of place in the front room. Even the ‘light green’ consumer turns to tend a blind eye towards sustainability at Christmas.”
  8. 8. 13. Koko: Cadbury introduced a range of Koko Assorted Truffles with a more traditional packaging update for the Koko selection box.14. Maynards: Cadbury’s sharing product range includes a number of Maynards confectioneries, such as Maynards’ Wine Gums, Sports Mix and Midget Gems.15. Mini Eggs: Cadbury’s Mini Egg twin pots returned as a limited-edition item, which was available until April. The product also received a new look for its re-launch.16. The Natural Confectionery Company: The brand expanded into the miniature impulse market for the first time in August 2010 after launching 29g packs of Ocean Minis jelly sweets.17. Picnic: Cadbury gave its Picnic brand a packaging design in 2010 which featured a new bold lettering design and was inspired by the 1980s.18. Trebor: Cadbury claims that the original Trebor Extra Strong mints brand is still the main market leader in the mints subsector. In July 2010, Trebor extended its Extra Strong range with the launch of a multipack format.19. Trident: Cadbury’s other gum brand, Trident, has been in decline for some time. Trident now focuses largely on fruit flavoured gum, with the two bestselling varieties comprising Trident Splash Strawberry & Lime and Trident Tropical Twist. In 2011, it was announced that Cadbury’s Stride and Trident chewing gum brands were to include vitamins and ginseng.
  9. 9. 20. Wishes: Cadbury introduced Cadbury Wishes — star-shaped milk chocolate with aerated centres celebrating Cadbury’s new partnership with the Make-A-Wish Foundation. 21. Wispa: Cadbury introduced the Wispa Duo in June 2010 — two smaller bars in one Pack. Kraft Foods UK LtdCompany Structure:Kraft added Cadbury to its portfolio of other well-known confectionery brands, such as Toblerone, CôteD’or and Terry’s Chocolate Orange. Kraft also owns the Milka chocolate brand which, despite success inEurope, has not received anywhere near the level of penetration in the UK, partly because of the unfailingpopularity of the Cadbury brand.Kraft claims to be the largest buyer in the world of fairtrade and Rainforest Alliance cocoa.Developments:In September 2010, Kraft’s Chairman and Chief Executive (CE), Irene Rosenfeld, presented the company’sglobal growth strategy in New York, which revealed that the addition of Cadbury was expected to deliver anextra $1bn of sales as the brand grows and is distributed to new markets.Brands: 1. Milka: Kraft announced that it would be introducing a new smaller, count-line Milka chocolate bar, which would be supported by a £4.7m media spend. 2. Terry’s Chocolate Orange: Mars/WrigleyCompany Structure:Mars sells a wide range of food and food-related products in the UK, including the major confectionerybrands Mars and Snickers. In October 2008, Mars Inc acquired Wrigley in a $23bn deal. Despite thetakeover, however, Wrigley has continued to operate independently from its Chicago headquarters.The Wrigley Company Ltd manufactures and supplies chewing gum and bubblegum under the brand namesExtra, Orbit, Juicy Fruit and Hubba Bubba. Wrigley’s sugar confectionery brands include its own-brandchewy mints, Wrigley’s Extra Chewy Mints, and the fruit-flavoured candy, Starburst.Developments:From summer 2010, Mars, Snickers, Milky Way, Topic and Flyte all had their saturated fat content reducedby 15%. Mars also claimed that its products contained 40% to 45% less saturated fat per 100g than thecurrent average of the top 25 UK chocolate brands. Mars opened its first European M&Ms World store in
  10. 10. Leicester Square, London. This was in addition to other similar outlets based in Orlando, Las Vegas and NewYork. In February 2011, Mars teamed up with the Football Association (FA) in an attempt to persuade150,000 adults to start playing football for the first time by 2013.Brands: 1. Bite-size: Mars’s Milky Way Magic Stars and Galaxy Counters were introduced in sharing bag formats in 2010. Mars’ entire bite-size range, which also includes miniature Mars and Snickers sweets, was promoted in Blockbuster from July 2010 as part of Mars’ ‘Big Night In’ promotional campaign. bitesize-promotion 2. Galaxy: Mars’ launched Galaxy Bubbles, which was supported by a £2.5m media spend. It was Galaxy’s biggest brand launch to date according to the company and the product is available in single format or multipacks of four. 3. M&M’s: Mars released limited-edition M&M’s in a new pastel-coloured packaging for the Easter season.
  11. 11. 4. Mars Bar: as an official sponsor of the 2010 football World Cup, Mars changed its packaging from black for the first time in its 78-year history. 5. Skittles: Mars released a mystery blue flavour in the first quarter of 2011 and asked consumers to ‘guess the flavour’. 6. Snicker: The limited-edition Snickers Maximus bar was launched in January 2011, with Mars building on and extending its Mr T campaign to launch the countline, which included more nuts and caramel instead of nougat. 7. Starburst: Starburst is Mars’ major brands and is often marketed as a healthier confectionery option via on-pack information that highlights the product’s fruit juice content and the fact that it contains no artificial flavours or colourings. 8. Wrigley Extra: Wrigley expanded its Extra Ice range in early 2011 with a number of new products including Extra Ice Peppermint and Extra Ice White. The peppermint flavour joined the existing Extra Ice Spearmint, which contains microgranules and xylitol — ingredients which help to stop the formation of plaque. Meanwhile, Extra Ice White contains sodium bicarbonate which helps teeth maintain their natural whiteness. Both products are accredited by the British Dental Health Foundation (BDHF). Nestlé UK LtdCompany Structure:Nestlé is a subsidiary of Nestlé SA and employs 3,000 people at 23 sites across the UK and the Republic ofIreland. Nestlé sells a wide range of products and well-known brands including Nescafé coffee; Nesquik,Aero and Skinny Cow hot chocolate; Carnation condensed milk; FAB ice lollies; Buxton mineral water and arange of confectionery products such as Aero, Milkybar and Yorkie.Developments:Nestlé announced plans to close its After Eight and Toffee Crisp factory in Castleford by 2012 and move themanufacturing facilities to its Halifax site.
  12. 12. In May 2010, Greenpeace dropped its campaign against Nestlé’s Kit Kat, which had been usingunsustainable sources of palm oil, following the company’s announcement of a deal with The Forest Trustto source the oil only from sustainable sources by 2015.In 2010, the company announced ambitious targets to decrease its CO2 emissions by 20% and increase itsenergy from renewable sources by 10% by 2015.Brands:Nestlé launched some of its best-selling brands in price-marked packs in 2010.Toffee Crisp, Aero Peppermint, Kit Kat four-finger milk, Kit Kat Chunky milk and Yorkie milk were all madeavailable with a 45p flash on the pack, appealing to impulse-purchase consumers. 1. Aero: Nestlé announced that it planned to make a ‘huge’ investment in its Aero brand. This began with the re-introduction of the Aero Caramel (originally launched in 2004) with a £5m, 4-month media campaign — a record spends for the brand. The product’s tagline was ‘irresistibubble’ and Nestlé were keen to highlight that it contained only 189 calories, in order to appeal to the health- conscious consumer. 2. Animal Bar: Animal Bars generally appeal to the health-conscious consumer, particularly parents, as each bar contains only 98 calories and has no artificial flavourings. 3. Polo: Nestlé launched a media campaign which asked consumers whether they were suckers or crunchers of the well-known Polo brand. 4. Quality Street: for Mothering Sunday 2011, 400g boxes of Quality Street were rebranded ‘Quality Treats’. 5. Rowntree: In order to price its sharing bags at £1, Rowntree’s reduced its Fruit Pastilles and Fruit Gums from 200g to 140g in January. The 185g Pick ‘n’ Mix pack also reduced in size to 130g for the same reason. SWOTSTRENGTHS 1. Wide variety of products = high degree of segmentation (price and flavour) =robust market 2. High level of penetration 3. Strong brands = customers’ loyalty and receptivity to NPD 4. Large players= wide diversification 5. Seasonal market: Christmas, Easter, Mothering... = sales booster 6. Large popularity among children=sustainability 7. Chocolate + gums = everyday treat/breath-freshenersWEAKNESSES 1. Large amount of investment required 2. Risk launching new brands to stay in the competition 3. Stringent legislation ( 4. Wide variety of products= complicated relationship between manufacturer and retailer 5. Mature market = difficulty to launch new product 6. Awareness of health, ecological and ethical issues due to obesity, palm oil and fair-tradeOPPORTUNITIES 1. Seasonal or limited-edition products easily implementable 2. Healthy eating is an area which has not yet been fully developed: Dark chocolate is becoming more popular thanks for health benefits 3. Use of social networking to exploit the popularity of this medium for marketing purposes
  13. 13. 4. Increasing demand for miniature and sharing productsTHREATS 1. New entrants: supermarkets brand. 2. Sharing bags start to compete directly with similar confectionery products. 3. Health lobbies (FSA)= direct response to the rising levels of obesity 4. Rising input costs 5. Reduction of products size to keep prices the sameV BUYING BEHAVIOUR • Chocolate bars and other chocolate items had the highest level of penetration in 2010, with 89% of adults consuming such products in the 12 months ending • September 2010. Nearly three-fifths of all adults (58%) consumed mints during the same period, while 45% consumed chewing gum. • Women were the most likely to consume chocolate and sweet confectionery compared to men. Indeed, many chocolate bars are specifically targeted at women, e.g. Cadbury’s Flake and Bliss Bar; and Mars’ lower-calorie count-line, Twix Fino. Penetration of mints and chewing gum was relatively indistinguishable between genders. • Chocolate bars particularly appeal to the ‘on-the-go’ eating habit, as they provide a convenient snack for those who have a busy lifestyle. This is reflected in the results compiled in Table 7.3, which shows that adults aged between 35 and 44 registering the highest consumption of such products, at 92.3%. • Although people are less concerned with the levels of unhealthy ingredients in confectionery, the rising number of people cutting back on chocolate for health reasons could indicate that more people are now maintaining a healthier diet, which is further reflected in the decreasing level of people who see chocolate as a harmless and affordable treat. • Men were more likely to buy chocolate in multipacks then women, at 34% compared to 32%, while women were more likely to buy individual chocolate bars than men, at 68.8% compared to 66%. This reveals that women are more likely to buy chocolate on impulse and on-the-go. More men than women believed chocolate to be a harmless treat, at 52.1% compared to 47.1%, reaffirming that women are more likely to take the health risks involved in consuming chocolate seriously.VI FUTURE TRENDS • Brand Extensions replace new product developments based on customers’ loyalty due to recession. • Sharing Bags of confectionery remain popular due to ‘on-the go’ and ‘night-in’ behaviours. • Social networking sites are becoming the main medium to influence younger consumers. • Demand for Ethical, Sustainable and Organic Products set to rise due to recession, global warming and the quest of a more sustainable model of development. • Growth of high-cocoa chocolates (Dark chocolate) due to healthy benefits. • Premium-end chocolate improves alongside economy • Kraft announces plans to expand the Cadbury brand overseas (Introduction of Cadbury’s Caramel Bunny in the Republic of China (PRC))