Ferrero The double winner in Confectionery and Spreads

With a quality portfolio spanning confectionery with its Ferrero, Kinder and Thorntons brands, and spreads with the family favourite Nutella, Ferrero’s iconic brands are going to be unmissable for consumers in the run up to December, with high profile advertising and promotional activity across the portfolio.

As a major supplier Ferrero isn’t just important before Christmas – the combined business presents a ‘double bubble’ profit opportunity all year round for wholesalers and cash & carries, says Jodie Wood, Business Unit Controller at Ferrero:

“We have quite a varied brand portfolio, with Ferrero, Kinder, Tic Tac, Thorntons and Nutella and are seeing good growth across the brands, which continues to be driven by success at key occasions throughout the year, with the leading ones being Christmas, Easter, Valentine’s Day, Mother’s Day and Diwali.”

Ferrero’s market share has more than doubled since 2013 and is now up to 6.9% including Thorntons (Kantar.) Christmas represents a significant opportunity for a number of their brands, specifically Thorntons, Pralines and Kinder. Jodie Wood explains:

“Last year, the Christmas period was very successful for us, and saw the total Ferrero brand grow by £8.6m (Nielsen.) It is important as a leading confectionery manufacturer to offer retailers products and ranges that help them cater for the different types of festive shopping needs.

Whether it’s to gift, to share or simply to treat and enjoy with loved ones, we know shoppers love Ferrero products and that they are a staple at Christmas. As such, wholesalers need to make sure they are carrying the right products for retailers to stock up effectively, and our team works closely with wholesalers to ensure they are able to provide these products to retailers and have suitable promotions to push them in depot as necessary.”

Interestingly, Jodie points out that Ferrero have seen that in some parts of the UK, Diwali is the biggest opportunity of the year: “However, our research shows that the majority of retailers do not actively engage with their customers around the occasion. We know that boxed chocolates are most commonly bought as a gift during Asian festivals and we work with retailers and wholesalers every year to help them maximise the opportunity to a gold standard.”

Ferrero have bolstered their Christmas portfolio significantly for 2018, with an array of new products being launched between now and December: “To communicate this, each of our brands will be supported independently to reflect the different needs they fulfil and audiences they appeal to. The support will predominantly be through digital and social channels, but we will also be on TV to drive awareness of Thorntons and amplify our ‘Pass the Love On’ campaign.

“We have also developed our advent calendar ranges to capture more interest and suit more shoppers’ needs. The Thorntons and Kinder products appeal to a range of tastes and budgets, and wholesalers are encouraged to stock up by October, as shopper demand for them peaks through November.”

Alongside the introduction of these new products, much of Ferrero’s existing range has undergone a packaging refresh, and the research shows that the new designs are resonating with shoppers more than ever. Looking at the major brands, Jodie Wood says Tic Tac is performing very well:

“The introduction of our ‘Open Up’ campaign featuring Mr Tic Tac this summer had an immediate impact on sales, driving the brand back in to growth (Nielsen.) “

A +2.2% volume uplift on the core range helped Tic Tac grow its overall share of the pocket confectionery market by +0.2%. Tic Tac is on TV again with ‘Open Up’ in September, and will be amplifying the campaign further through video on demand and social content.

“We have also refreshed our Tic Tac line up, with Intense Mint replacing Mint Rush. Intense Mint is an extra-strong mint and offers shoppers more variety, with clear differentiation from the rest of our core range. The introduction of Intense Mint provides an appealing option in a key part of the market; there are three key flavour territories in the category and we have strong, differentiated products for each.”

Another popular Ferrero brand, this time in grocery as opposed to confectionery, Nutella is a very popular brand and is now worth over £70m. Jodie Wood explains:

“This is due to the constant strength of the spread, which is now supported by our Nutella & Go! and Nutella B-Ready products, which are enabling people to enjoy Nutella in a variety of new ways.”

Nutella remains the number one product in the spreads category and is now found in one in four UK households (Nielsen.) 44% of people claim to love Nutella, and the activity around the brand focuses on key consumption occasions throughout the year. In September, Ferrero are running a back to school campaign to strengthen the product’s position in parents’ minds as a tasty breakfast for the family on those special school mornings.

“Following that, we will target Christmas and Pancake Day, the two main peaks we see for Nutella consumption throughout the year. We’ll be distributing limited-edition jars for each occasion – including our first ever glow-in-the-dark 200g jars at Christmas – to generate further interest, and will use a combination of VoD, social and TV campaigns to push demand at strategic points around each occasion.”

Going back to confectionery, Jodie Wood and the Ferrero team have heard from retailers that confectionery is the main category that they would like more support on. While Ferrero are working on the products and promotional assets to benefit retailers in store, wholesalers can provide additional support to help drive sales directly:

“Because the confectionery category is so diverse, with many brands for retailers to choose from, it can be difficult for a retailer to know where to start when faced with the options in a depot.

However, we also know that the majority of retailers prefer to stock the best sellers they know their customers are looking for. These bestsellers should be easy to locate in depot, and brand blocking should be used so retailers can grab what they are looking for quickly and easily.”

Jodie Wood says the top brands should also be signposted with eye-catching POS, making it easy for retailers to find what they need:

“Seasonal products should also be amplified. The seasonal range is always designed to drive sales in the category, so retailers need to know about what is available and be able to locate it when stocking up.”

Ferrero have invested in digital ordering, as an important way to help grow the business. In Jodie Wood’s words, everyone knows that digital is a part of everyday life and this applies to the retail landscape too:

“The speed of evolution in this sector is fast, and we need to ensure we are listening to our customers’ needs and adapting our tools. As such, last year we launched our trade digital platform, Your Perfect Store. While it targets retailers directly, it helps to drive sales and grow the category to the benefit of wholesalers.

“In developing the platform, our research showed that confectionery is the category retailers want the most help with from suppliers, particularly in terms of category advice and NPD news. Your Perfect Store gives up-to-date information about all our products, helping to drive awareness of seasonal specials and communicate when to stock up in anticipation of demand peaking. It also includes category advice and tips on how to grow sales, and we recently added a members section to give users access the latest news on must-stock items and upcoming events, as well as giving them a platform to manage their POS materials from.”

The relationship between retail and digital is constantly evolving, says Jodie, and it is vital for suppliers and retailers to stay at the forefront to drive the best business results.

This includes social media, and Ferrero are increasingly using Twitter to share their top tips and provide advice to retailers looking to grow their confectionery sales. Summing up, despite majoring on the Christmas opportunity, Jodie Wood insists that there are Ferrero sales occasions for their customers all year round:

“As always, we have some fantastic new products and activations coming up for Christmas, which seems to get earlier every year when you factor in product development and setting up campaigns. Bringing new products to market is always exciting, and it’s great to see how they are received by wholesalers, and ultimately, the shopper. I’m looking forward to seeing more great products from Ferrero bringing success to the category.

“However, it’s not all about Christmas, and there are plenty of other occasions to keep us on our toes as an industry. Those challenges bring exceptional opportunities though, and we are constantly working closely with our trade customers to capitalise on them.”