Chocolate
Bars
March/April
2003
Chokky
Bars - is bigger better?
ing size bars bring more bang for your customer's
buck and the big brands are as popular as ever. But don't forget that
it is the customer that is king.
We all know that chocolate is a big contributor to shop
sales and it brings a healthy margin. Within the chocolate category,
bars are the biggest, accounting for over 60% of chocolate sales through
most convenience stores. Chocolate bars generated over $60 million in
2002 ($72 million including children's novelty bars) at the major franchised
convenience stores and nearly all from products made by the big three
- Cadbury (43%), Mars (35%) and Nestle (20%).
The top 25 units account for more than 55% of total sales,
with the top five generating over 20%. Outside the top five, performance
varies with advertising and promotions activity.
CATEGORY: Chocolate Bars
MARKET SIZE TOTAL: $616 million (Mat Dec 2002)
MARKET SIZE C*Track $34.8 million (Mat Dec 2002)
SALES GROWTH: +1.2% onY/A
Market size $616 million (Mat Dec 2002)
National C*Track Tier 1 (Major Franchised Outlets)
$34.8 million (Mat Dec 2002)
Growth +1.2% onY/A
| PRODUCT RANKINGS
C*Track |
| National C*Track Tier 1 (major franchised
convenience stores) |
|
|
|
Dec QTR 2002 |
Dec QTR 2001 |
| |
Bar Chocolate
Rankings |
|
$ shares |
$ shares |
| 1 |
Mars Plain King 80g |
Mars
|
5.9
|
5.7
|
| 2 |
Cherry Ripe Bar K/Size 85G |
Cherry Ripe |
5.2
|
6.1
|
| 3 |
Snikers Bar King 80G
|
Snickers |
4.6
|
4.5
|
| 4 |
Mars Plain 60G MARS |
Mars |
4.0
|
3.6
|
| 5 |
Mars Nars K/S 2@ 160G
|
Mars |
3.5
|
0.0
|
| 6 |
Picnic Picnic K/S 70G |
Picnic |
3.4
|
3.3
|
| 7 |
Twix
Bar K/S 80G |
Twix
|
3.1
|
3.0
|
| 8 |
Cherry Ripe Bar 55G |
Cherry Ripe |
3.0
|
3.0
|
| 9 |
Cadbury/Fry's Turk
Del't 55g
|
Cadbury/Fry's |
3.0
|
2.7
|
| 10 |
Snicjers Bar 60G |
Snickers |
2.6
|
2.4
|
| 11 |
Nestle Medium Bar 2
x 55 110g |
Nestle |
2.5
|
NA
|
| 12 |
Kit Kate Bar K/S 65G |
Kit Kat |
2.3
|
2.6
|
| 13 |
Cruchie Bar K/S 80G
|
Crunchie |
2.3
|
2.2
|
14
|
Twirl Bar K/S 63G
|
Twirl
|
2.3
|
2.1
|
| 15 |
Kit Kat
Bar 45G |
Kit Kat |
2.2
|
2.3
|
| 16 |
Cadbury Time-Out K/S 60G
|
Cadbury Time-Out |
2.0
|
2.3
|
| 17 |
Kit Kat
Bar Chunky 60G |
Kit Kat |
1.9
|
2.4
|
| 18 |
Kit Kat Bar K/S 78G |
Kit Kat |
1.9
|
NA
|
| 19 |
PICNIC BAR 50G |
Picnic |
1.9
|
1.5
|
| AC Nielsen
C*Track tracks scanned sales data at some 1,700 major branded and
franchised convenience stores across Australia including:7-Eleven,
Shell Select (incl multi-site franchisees) and Shell Shop, 7-Eleven
outlets, BP Express/Connect & BP Shop, Mobil Quix and Mobil
company operated service stations, Caltex Star Mart, Caltex Tier
1 & 2 outlets and Night Owl. |
The concentration of sales is even greater at the brand
level. Nearly 50% of sales are generated by the top five brands with
nearly 80% generated by the top 20 brands. This highlights the importance
of brand in this category, and the need to stock a range within each
brand to take full advantage of the manufacturer's spending on advertising
and product development. Different mixes suit different stores, based
on size of the store and its demographic.
"The main growth strategy for suppliers is brand
extension, offering different flavours within the brand," says
Greg Matheson, Franchise Activity Manager, Masterfoods Snack Foods.
"White chocolate varieties are in focus at the moment and white
chocolate consumers are responding to the greater opportunities to enjoy
chocolate. Brand extension stimulates consumer interest in the category
and with trusted brands, consumers are confident to try new varieties."
A good example of this brand leveraging is the Kit Kat
range, which is now available in 6 variants. "The launch of Chunky
Milk in 2000 did very well in all channels because it met the consumer
need for a Kit Kat that would satisfy hunger," says Martin Brown,
Marketing Manager, Nestle Confectionery. "It was a new product,
exciting for consumers, and backed by strong communication, so it got
a lot of trial. Display and speed to market also contributed strongly
to Chunky's success. Kit Kat 4 Finger White and Chunky White were extensions
to take advantage of the explosion in white chocolate in 2001-2, and
they brought a lot of consumers back into the brand.
| Share of Sales |
*(%) |
| Mars |
15.6 |
| Kit Kat |
10.6 |
| Cherry Ripe |
8.8 |
| Snickers |
7.7 |
| Picnic |
4.9 |
| Europe |
4.4 |
| Crunchie |
3.6 |
| Twirl |
3.5 |
| Time Out |
3.1 |
| Twix |
2.7 |
| Aero |
2.5 |
| Flake |
2.5 |
| Bounty |
1.8 |
| Viking Bar |
1.3 |
| Milo Bar |
1.3 |
| Chokito |
1.1 |
| Crunch |
1.1 |
| Chomp |
1.0 |
| Breakaway |
0.9 |
| Violet Crumble |
0.9 |
* Share of Sales excluding
Children's Novelty
Source: AC Nielsen C*Track. |
But, is bigger
better?
In 2002, the number of bars sold was lower than in 2001,
but sales growth was just over 2%. This is partly due to price rises,
and because, on average, bars are bigger. This is a continuation of
the trend from the past couple of years. Twelve of the top 20 units
are now king size bars.
| Chocolate Bar
Sales in Tier 1 Convenience Stores |
|
MAT 22/12/02 |
Growth YonY |
| Units - regular ('000) |
28,052 |
-11% |
| Units - king size ('000) |
13,346 |
+ 8% |
| Total units ('000) |
41,398 |
- 5% |
| Total sales |
$60.7m |
+ 2% |
| Source: AC Nielsen
C*Track |
"Our king sized variants were launched to satisfy
those who want more chocolate and good value for money," says Martin
Brown. "The king size range is a strategy well-suited to the petrol
and convenience channel, because it meets a need for greater hunger.
In this channel, many consumers are hungry young males who want a satisfying
snack, as well as good value. King size bars also offer the retailer
higher dollar margin, so everyone is better off."
Clearly, if you can sell a bigger bar for a higher price
and maintain the same margin, you are better off, and bigger is better.
However the products must suit your customers. Not all consumers want
bigger bars.
A good example of this is Crispy from Network Foods, a
12 gram chocolate bar that is selling very well through the route trade
- milk bars, corner stores, news agencies, and school canteens. "After
we introduced our new modern packaging in mid-2001, sales doubled in
2001 versus 2000," says Connie Yeung, Product Manager, Network
Foods. "Crispy appeals to kids (and their parents) for a snack.
Small size and its crispy rice content are its appeal with a target
market of 6 to 12 year olds. If you are located near schools or enjoy
lots of school holiday traffic, it is an ideal product."
Other things matter
Along with brand extension, promotions drive consumer
excitement. "New products have a high incidence of novelty and
trial rates when they hit the market place," says Greg Matheson.
"To maximise the sales opportunity, retailers need to ensure maximum
distribution and display of these products as close to launch as possible.
This will also ensure maximum leverage off advertising and brand support
from manufacturers is achieved."
Promotions are planned every year by the manufacturer
or supplier when sales are reviewed and budgets prepared. Activities
such as combos are organized at that time, then agreed with the major
retailer accounts. Sometimes large retailer groups will initiate a promotion
with suppliers - for example the Shell expansion program which had two
bars for a discount price plus fly buys. The combo is the most popular
promotion. It appeals to the consumer and increases volume, although
there is a small sacrifice in margin.
"We like to run one major promotion each year,"
says Greg Matheson. "Last year it was the Mars Free Bar (1 in 6
Mars gave an instant win of a free Mars bar). This was funded by Masterfoods
with no cost to the retailer. Major promotions are usually timed for
the peak winter chocolate season."
Suppliers put a lot of time and effort into their promotions,
and retailers can take advantage of this to their benefit. For large
accounts, suppliers will build the display and stock the display areas
for retailers. Smaller retailers can call on supplier representatives
for help to tailor the promotion and other stock to the size of the
store and level of sales. "All retailers should expect the same
level of service from their sales reps industry-wide," says Greg
Matheson. "In return, suppliers expect retailers to do the right
thing in supporting promotions."
Some 75% of confectionery purchase happens on impulse
- one of the highest rates. Therefore, location in high traffic areas
is essential to maximise the sales opportunity. "If there is a
big event in the store and it is displayed well, there is a significant
increase in sales," says Martin Brown. "Visibility is the
key to impulse purchases, and you can increase the frequency of purchases
through combos and multiple locations."
Customer is king
Although overall the top 20 brands account for nearly
80% of sales, suppliers do not recommend just stocking the top 20. Each
store has a different top 20, and you know your own market better than
anyone. A different range will be right for a store near a school compared
to a store near a building site. A multi-site operation will have different
needs to a general grocery store. You can use the sales rep to guide
the product range for your customer base, but you need to know your
customer first.
"With more and more varieties being introduced to
try to accommodate all tastes, it is a challenge for C-Store owners
to allocate valuable space to the right mix of stock," says Greg
Matheson. "You are not expected to keep the whole range. On the
other hand, some retailers are reluctant to try new products, and they
need to be open to new ideas, and then decide if the new product fits
with your customer base."