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Shoppers have been turning their back on premium
chocolate, returning to everyday block chocolate for
their credit crunch treats.
Sales of block chocolate jumped 7.3% year-on-year [TNS
15 June 2008], significantly outperforming overall
confectionery, which grew just 3%, well below inflation.
Recipe block chocolate, which includes products such as
Dairy Milk with Caramel and Fruit & Nut ?did even
better, growing 7.9% in the last year. Volumes increased
by 4.1% and 3.9% respectively.
The growth in value comes despite an 11.4% rise in the
price of the leading countline, Cadbury Dairy Milk, and
a reduction in its pack size. Some attribute the success
to Cadbury?s gorilla ad. But in the battle of the block
chocolate brands, Galaxy?s partnership with Sex and the
City also appeared successful. Sales of Galaxy grew 12%
over the past year, while Dairy Milk only rose 2% [TNS
Brands Survey].
?I?m not surprised to see Galaxy gaining ground over
Cadbury,? said Don Williams, CEO of brand consultants Pi
Global. ?It has captured and strengthened a similar
emotive territory to that which Cadbury used to own.?
But Galaxy?s success could also come from a
much-increased promotional spend by Mars. Assosia data
show Mars, along with Nestl? substantially upping the
number of lines on promotion in supermarkets? paid-for
featured space. Mars? promotional space rose 47% and
Nestl? 12%. Cadbury reduced its promotional space 12%,
which perhaps accounts for its healthy margin growth
this year of 210 basis points. In 2006-7 there were 188
Dairy Milk promotions against 21 on Galaxy. In 2007-8,
this had shifted to 109 vs. 74.
?Mars and Nestl?have upped their presence on gondola
ends in response to Cadbury?s previous dominance,? said
Assosia MD Kay Staniland. ?As Cadbury had organic sales
growth of 7%, it seems its strategy is paying off.?
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