Cadbury Dairy Milk sales in marvellous 14% growth

Growing your volume sales by 10% when you are already one of the biggest fmcg brands in the UK, and the market leader, is no mean feat. To do so in a category as mature as chocolate confectionery - as Cadbury Dairy Milk has done over the past 12 months - can only be described as Marvellous [Nielsen 52 w/e 12 October].

The success of NPD such as Marvellous Creations (see Top Launch below) and Cadbury Dairy Milk with Oreo has driven a stellar performance of the Mondelez brand, which has soared £62m year-on-year to break through the half a billion pound barrier.

Dairy Milk has contributed almost a third of the total 5.3% increase in the value of the market. The NPD has also served to insulate the brand from inflation in key commodities such as milk powder and cocoa butter (Mintec says the production cost of a chocolate bar has climbed 25% in the past year).

“Raw material cost increases are always in our thoughts,” confirms Matthew Williams, marketing director for chocolate at Mondelez. “In a recessionary market, everybody would love to pay less but in reality that’s not how you grow a business sustainably. So our focus is not just on innovation but also our core business to find ways to offer consumers genuine value that can be sustainable in terms of the bottom line as well as the top line.”

As well as flavour-based innovation, Mondelez has tapped into the sharing trend, but with a change of emphasis towards tablet bars. “In 2012 our sharing innovation focused on bags - for example with the launch of Cadbury Bitsa Wispa - which was highly successful,” says Williams. “This year, [large tablet] innovations like Marvellous Creations and Cadbury Dairy Milk with Oreo have been incremental in driving greater growth.”

With much of Mondelez’s attention on Dairy Milk during 2013, other brands have suffered in comparison. The launch of sharing bags for Wispa and Twirl drove massive growth in both brands in 2012. This has not been maintained and both brands have now lost value and volume.

Year-on-year comparisons may also have been affected by Mondelez running a major promotional push later in 2013 than in 2012. The Cadbury-wide Unwrap Gold promotion - which offered eight 18-carat gold replica chocolate bars as prizes - was held in September/October 2013, compared with May/June in 2012. “We expect to see even stronger sales for our key brands like Wispa and Twirl in upcoming market data,” says Williams.

One Cadbury countline already going strong - though still a long way from making it on to our top 20 brands table - is Crispello, The Grocer’s Top Products Survey Top Launch of 2012. Sales of the countline - and sharing bag, following its expansion this year - are around £10m after a year on shelf.

Given that it is more than 40 years older than Crispello, Cadbury Creme Egg could be forgiven for slowing down a little, and its value and volume sales have indeed fallen year-on-year. Mondelez points out that Easter fell a week earlier in 2013 than in 2012, which may have dented sales, but this year’s decline follows a similar performance last year.

While Mondelez’s focus on Cadbury Dairy Milk has dented some of its own brands, it also appears to have taken a bite out of CDM’s big rival - Mars’ Galaxy, which has fallen 5.3% by value. The £11.9m loss comes despite a rebrand of the range that saw the return of the ‘Why have cotton when you can have silk?’ strapline, and the introduction of new Galaxy SKUs Honeycomb and Nut crunch.

The Mars confectionery team can console itself with its success on Maltesers, however, which was expanded in March with the launch of the Teasers countline. The bar, which was inspired by the Maltesers sweet in the Celebrations range, was the first NPD to be delivered by the £6m R&D facility Mars opened last September. The launch was given a £4m marketing push, part of an increased spend for the Maltesers brand that appears to have paid dividends.

“A key contributor to our growth has been strong innovation like our Lindor Maxi Ball”

Annabelle Delorme, Lindt & Sprungli

Sales of the Mars bar, meanwhile (which at 80 years old makes Cadbury Creme Egg look like a spring chicken), have been turned around following a dip last year. The brand has benefited from a move into sharing bags with the Mars Mix product that is also available as a countline, and the return of the limited-edition Mars Caramel - a nougat-free version of the countline that was a big hit when sold for a limited time in 2012.

And the company adopted a similar approach for Snickers this year, with the roll-out of limited-edition lines designed to give consumers the choice of More Nuts or More Caramel. The launches were supported by a campaign including TV, outdoor and online activity. Shoppers appreciated the extra choice, with sales rising 10.8% and propelling Snickers two places up our top 20 chart.

Also leaping up the table this year is Nestlé’s Quality Street, which has defied a decline in the size of the tubs and tins market to grow 10.8% - overtaking Mars’ Celebrations, which has fallen in value. Sales of Cadbury Roses have also fallen this year, while Mondelez stablemate Heroes has grown slightly - though not quite enough to take it into the top 20.

Top products: the stats

Another big success story of 2013 has been Nestlé’s Milkybar, which has continued to build on the growth it enjoyed in 2012. Sales of the brand have risen 9.7% year-on-year - a performance driven by the Milkybar Giant Buttons sharing pouch - now the biggest seller in Nestlé’s sharing pouch line-up.

While the overall Kit Kat brand is virtually static year-on-year - and in slight volume decline - Nestlé says four-finger and Chunky have grown by value year-on-year. Chunky has been particularly strong, claims the company, with sales boosted by the return of its Choose a Chunky Champion promotion.

The bubble seems to have burst for Aero, however, with sales down almost 20% this year following a brilliant performance in 2012 driven by the relaunch of its medium bars and introduction of orange variants. Nestlé admits it was always going to be a challenge to maintain this performance, but adds that the relaunch of its Aero Bubbles has boosted its performance in sharing bags, and that its multipacks are in growth.

The two top 20 brands not produced by the big three chocolate confectioners have both had good years, with sales of Thorntons up 9.1%, and Lindt Lindor rocketing six places up the table on the back of 24.8% value growth. Thorntons will be expecting even bigger things in the coming year, having recently relaunched its toffee and fudge range as part of a revamp of its entire confectionery range designed to revitalise the look and feel of the portfolio and reduce complexity and duplication.

Swiss chocolate brand Lindt, meanwhile, has benefited from investment including a UK-specific TV campaign and below-the-line activity. This has driven a strong performance of its range, and in particular its boxes of Lindor chocolates. Growth has also been boosted by the launch of new lines, says Lindt & Sprungli UK marketing director Annabelle Delorme.

“Key contributors to our growth have also been our strong innovation pipeline delivering exciting concepts like the Lindor Maxi Ball - a giant Lindor ball that opens to become a bowl containing individual milk chocolate truffles, says Delorme. “We believe we can build on this momentum in 2014 and look forward to the year ahead.”