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Confectionery: opportunities abound amid the volatility

In supermarkets, the diverse category of confectionery has been affected by volatility, with consumers stockpiling at the beginning of the Covid-19 outbreak and then easing up as supply issue fears around the pandemic stabilised.

According to major players, price, as always, has been a driver of confectionery sales, especially with financial constraints coming to the fore during the pandemic crisis. But that’s not to say there isn’t opportunity for price to be bypassed in the interests of ‘premiumisation’, innovation, nostalgia, a sense of normality, and sustainability.

Opportunity, they say, can be increased through innovation in products and in-store, meeting trend and taking advantage of social media and online opportunities.

However, also of importance is that brands show their care and support of communities.

According to IRI Food and Grocery Consultant Brooke Olliver-Burnside, chocolate blocks have been a clear winner in supermarkets, whereas sales in total sugar confectionery have slowed.

She tells Retail World there was initial stockpiling in supermarkets, with growth numbers in February and March outgrowing what is normally seen in confectionery over the year.

However, as supply fears around coronavirus stabilised, so too did confectionery purchases.

She adds that supermarket retailers have been filling shelf gaps with products to promote touch points with consumers, with confectionery amid cleaning products being a familiar sight.

“Price is a keen motivator, no doubt,” she said. “However, there’s a relaxing here when it comes to more flavourful formats and nostalgia around certain products.

“The nostalgia sees people reaching for old favourites or revamped versions of old favourites, especially when feeling vulnerable, or in times of crisis such as now.”

Coronavirus aside, she says emerging trends evident in wider snacking and confectionery include health, sustainability and premiumisation.

“Premiumisation is all about people looking to the next level when it comes to treating themselves,” Ms Olliver-Burnside said. “However, there’s been a shift in confectionery in that while it’s seen as a way for people to treat themselves, it’s also seen as a luxury.

“This concern with pricing in the premium range offering has led people to step down into a more general space where core ranges reside.”

According to Nielsen, as unemployment levels increase and economic and business forecasts plunge, two types of consumers are emerging.

There are those relatively unaffected by health problems or income loss who have unchanged or even more discretionary income through being unable to spend on out-of-home eating, entertainment, travel, etc. In contrast, a second group of consumers have had their income and spending significantly curtailed or constrained due to unemployment, furloughing or other Covid-19-related challenges.

Both Mr Verstraten and Ms Olliver-Burnside underscore that promotion of the ‘stay at home and treat yourself’ message during this time of restriction is a marketing tool that could be powerful.

“The confectionery category really has the opportunity to play in the area of escapism associated with treats because people are looking for comfort, reassurance and normality at this time,” Ms Olliver-Burnside said.

“And what we’ve found is that chocolate bites and chocolate share bags work really well in this category as they lend themselves well to portion control, especially in scenarios where parents are working remotely and have their children at home with them.”

As a result of the coronavirus restrictions, people have become more comfortable with online shopping, Ms Olliver-Burnside says, as well as taking a keen interest in whether products are Australian made.

Read about the latest trends in confectionery in the August issue of Retail World.

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