Confectionery in convenience, which pre-pandemic had shown robust growth, hasn’t avoided the havoc wreaked by COVID-19, but there’s been plenty of upside for the category.
IbisWorld Senior Industry Analyst Matthew Barry tells Convenience World that international trade and production were disrupted in the short term due to COVID-19, with many overseas manufacturers enduring limited production or temporarily shutting down facilities to reduce the spread of the virus.
“Before the outbreak of COVID-19, confectionery, snacks and ice-cream products were expected to make up 10.5 per cent of total industry revenue,” he said. “However, greater demand for ready-to-eat food, groceries and other staples over this lockdown period is expected to slightly decrease confectionery products’ share of industry revenue in 2019-20.
“Over the next five years, when demand shifts back to a normal product mix, confectionery product share of revenue is expected to recover.”
Mr Barry highlights that one way to increase brand awareness is for brands in collaboration with convenience stores to offer exclusive products.
Diversity the way of confectionery
Georgia Bruton, Managing Partner and Director of Shopper at Wunderman Thompson, tells Convenience World that sales have decreased for the more impulse-driven choices such as gum, smaller lollies and snack-sized chocolate bars. This has been caused by people minimising or avoiding visits to convenience stores because of their perceived high foot traffic and consequent difficulty in social distancing, while many people have opted to stay home, which has reduced in-store foot traffic.
On the other hand, she says, sales of chocolate bars have been spiking across the lockdown period.
The role of corporations and brands, she says, is to step up and show consumers how they can play a role in their lives and society.
This, Ms Bruton says, has been evident in Mars, as an example, donating thank-you packs to frontline workers.
Cadbury, too, is showing its care and appreciation by surprising and delighting more than 60 community groups and businesses with chocolate deliveries as a small token of gratitude.
IRI Client Consultant Food and Grocery Brooke Olliver-Burnside tells Convenience World, price is always a driver of sales in confectionery but that there is a relaxing of attitudes when it comes to more flavourful formats and nostalgia around certain products.”
She says that during the pandemic confectionery is seen as a treat but also a luxury, which had led people to “step down into a more general space where core ranges reside”.
IRI Lead Consultant Jan-Willem Verstraten comments that there is less of a focus on health during the pandemic as people concern themselves more with their financial and mental wellbeing over their physical wellbeing.
He says that another boost for convenience confectionery could hinge on people avoiding public transport for the foreseeable future and using their cars instead, in line with social distancing precautions.
“As people use their cars more, there could be a slight spike in confectionery sales at convenience stores as people pop in and out more easily,” Mr Verstraten said.
“Confectionery also has the opportunity to capitalise on the idea that people will want snack bundles delivered to their homes as they avoid cinemas, restaurants and bars in favour of home entertaining.”
Such a trend, he adds, could give further impetus to partnerships, such as those between 7-Eleven, BP, Super Eats and Deliveroo.
Both Mr Verstraten and Ms Olliver-Burnside cite the importance of a marketing tool that could be powerful: promotion of the ‘stay at home and treat yourself’ message during the COVID-19 restrictions.
Nestlé partners up as local production bears fruit
Nestlé Head of Marketing Confectionery Joyce Tan says confectionery sales in convenience are linked to fuel sales and, as a result of the coronavirus restrictions, demand for confectionery generally has declined as consumers spend more time at home.
The upside to this, though, is increased demand for grocery products and the broader Nestlé portfolio in convenience outlets.
Read more in the July/August issue of Convenience World.