Sweets dodge bullet in the war on sugar

British shoppers have once again shown that relentless messages about the perils of sugar consumption aren’t going to stop them reaching for a bag of sweets. Even the spread of checkout bans hasn’t put them off too much, with overall category volume up 1.7% year on year while falling prices have kept value sales virtually static.

“Unlike some products currently in the media spotlight, consumers understand confectionery products are a treat,” says Haribo UK MD Herwig Vennekens. “Understanding this helps consumers choose a treat that is right for them. This is supported by the fact consumers have more choice than ever before when it comes to treating themselves.”

One format has taken a hit from the checkout ban, however, according to Nielsen, and that’s single packs. “Singles sales continue to decline, and as more retailers decide to follow this trend the more we should expect singles sales to be impacted,” says Nielsen analyst Gemma Cooper, who adds singles have also been hit by the lower price of hanging bags.

It makes sense. Shoppers appear more willing to trade up from singles to hanging bags, increasingly sold at the £1 price mark, as the price difference between them narrows. Growing competition between the mults and the discounters will accelerate this trend.

“The rise of the discounters means sugar manufacturers have to be flexible in terms of their range of SKUs to be able to hit price points without heavily impacting their margin,” adds Cooper. “This demand for low price hasn’t stopped with discounters, as many of the big retailers are looking for opportunities to drive volume through price changes.”

Price-marked packs continue to play a big role in the category according to suppliers including Perfetti Van Melle and Wrigley, which this year extended its price-marked packs for Skittles and Starburst with three more Skittles flavours and Starburst FaveReds. “As our customers have chosen to invest in value we have supported them to do this in a number of ways,” says a Wrigley spokeswoman, admitting, however, that activity has delivered “varied” results for its brands, with Skittles and Starburst in decline.

Also looking to build growth in 2016 is Nestlé, after sales of its Rowntree’s brand fell almost £10m. The supplier says Fruit Gums and Fruit Pastilles have performed well - with NPD Fruit Pastilles Berries & Cream proving a hit over the summer - but admits Randoms has had a challenging year.

In addition to hitting the right price points, suppliers are working hard to justify their place on shelf as retailers continue to rationalise ranges. “We work very closely with our customers and consumers to ensure we have a range of products that’s attractive and appealing,” says Vennekens.

To this end, Haribo this year expanded its bestselling ranges - Starmix and Tangfastics - with Frenzy Editions, offering tropical flavours in a variety of lurid colours. It has also looked to build on the huge success of its Minions sweets - The Grocer’s top sugar confectionery launch in last year’s survey, which has more than doubled sales to £6.5m. The range was relaunched to support the Minions movie and updated with tangy Minions, and joined the Haribo Halloween line-up in the shape of Minions Gone Batty sweets.

Mondelez-owned Bassetts Jelly Babies is another character-based brand that’s enjoyed growth, with sales up 12.6% to £27.7m on volumes up 16.3%. New for 2015 was Bassetts Jelly Bunnies (see below), which raked in sales of £1m at Easter and is returning in 2016. Following this success, Mondelez has also launched a Santa Babies seasonal product.

Although overall sales of Bassetts stablemate Maynards are down, Wine Gums sales grew almost £1m to £39.1m and were extended this year with the permanent return of Wine Gums Red n’ Blacks, previously a limited-edition line, following calls on social media. Maynards has also benefited from a return to TV screens this year as part of a £2m UK marketing investment. Mondelez’s Cadbury Eclairs are down, though the supplier said this was to be expected following strong growth in 2014.

Ferrero, meanwhile, has been investing heavily in Tic Tac in 2015, launching Tic Tac Mixers - Cherry Cola and Peach Lemonade sweets that melt from a sweet fruit layer into a secondary flavour. It has supported Tic Tac with the Happy Rewards on-pack promotion.

Sugar-free innovation

While concerns over sugar have yet to make a real impact on category sales, some suppliers see sugar-free as an important area. These include Perftti Van Melle with its Smint brand, while Nestlé reports that, although Polo sales have been hit by the general decline in singles sales, its sugar-free single is in growth.

Storck ramped up its presence in sugar-free this year, extending Werther’s Original Creamy Toffee with a sugar-free variant. “As concerns over sugar have been highlighted by the media in the latter half of this year, this launch couldn’t have come at a better time,” says Storck UK sales director Andy Mutton.

One supplier that needs no convincing about the value of sugar-free is Wrigley. More than 95% of its gum brands are free from sugar, and the business continues to enjoy strong growth for many of its products on the back of an oral care message. The Eat, Drink, Chew strategy aims to encourage consumers to chew sugar-free gum whenever they eat or drink to help remove lingering food and keep teeth clean. The checkout ban on confectionery has also benefited the business, says Wrigley, as sugar-free gum takes the place of sweets on some fixtures.

Wrigley activity in 2015 included absorbing the Orbit brand into £214m market-leader Extra to take advantage of this year’s £15m brand spend. Wrigley has also tapped demand for sugar-free fruit flavours, rolling out soft-chew Strawberry and Bubblegum under Extra. Airwaves is in similar growth to its big brother, and was expanded this summer with Airwaves Extreme. Another success story has been Hubba Bubba, with value and volume up on the back of increased distribution. But it isn’t all smiles for Wrigley, with Five, Juicy Fruit and Doublemint in decline, although the supplier insists they remain important parts of its portfolio.

Mentos Gum has also struggled, and Perftti Van Melle has reacted to this by refining the range and cutting a number of lines, says the company’s trade marketing manager Mark Roberts, who adds: “We’re confident the refinements we have made, and NPD planned for 2016, can help us to place Mentos gum back on track.”