»

Feb 05

Why has Confectionery become so boring?

Why has the Confectionery Display become so boring?

A glance at any confectionery display – whether in a supermarket, service station or newsagent – will convince you that new product development has all but ceased in the confectionery industry.  Of course there are occasionally a few unfamiliar products, but these are generally either imports that you’ve never heard of from an opportunistic trader or perhaps a seasonal special, something really original like a chocolate reindeer!

Historically the confectionery market was driven by innovation and new products, Admittedly a lot of them didn’t last very long, but that’s the nature of new products and some introduced in the past 20 years or so have become long term favourites.  

Even relatively recently, new products arrived in the market regularly, often two or three a year from each major company and there was forward planning to ensure that the consumer was presented with a succession of new ideas and tastes.    There has been some modest innovation in assortment centres, but even here the emphasis seems to have been on complexity and image rather than on anything actually original.

It’s not as though there aren’t opportunities, because if you look in different markets you will see products not familiar in your own, surly there must be things out there worth a run.  Within any single company’s global portfolio there are many products which do well in local markets which no-one seems to have the imagination to try elsewhere.

This problem is not confined to relatively mature markets such as chocolate. Chewing gum, which should be the most dynamic and creative section of the market appealing as it does to the youth sector, is just as boring.  There has been an innovation, liquid centred gum, but no-one could accuse the manufacturers of exactly over promoting it and the same company used a dreary old stick pack format (and not even a good quality one) to try to launch gum under one of its flagship brands.   Other than that the same product in an occasional new wrapper with the same old flavours seem to be trotted out year on year. The R&D functions of major gum companies have, I know, lots of radical and interesting ideas for the gum market but none of them seem to have seen the light of day. 

The confectionery industry’s current perception of innovation seems to be a bigger version of an existing product without claiming to have increased portion size – eg “bar and a half”.  Companies have been relaunching or reintroducing products from many years ago and in one case even copying another company’s product quite unashamedly – previously unheard of.

Why has this state of affairs arisen?  It is difficult to believe that it is because the consumer has lost interest in new products.  Historically new products fuelled a number of requirements of the businesses.  What is more other sectors of the food industry are extremely active with regular new product introductions just look at the breakfast cereal aisle some time.

What factors used to drive innovation in the confectionery industry?

There was competition between businesses which lead companies such as Mars, Rowntree, Cadbury, Nestle etc. to build their market position and profile by introducing a regular stream of new products. 

A successful new product undoubtedly improved a company’s market share, however this could be a two edged sword as a profusion of products could fragment a business and merely spread the same sales over a wider range of products to no real increase in value.  Certainly some companies fell into this trap.

Another important factor was replacement, as older and more traditional products decreased in market share so new products sought to replace them. The decline in one particular product was memorably attributed quite simply to the increasing age and consequent demise of the people who bought it “never recruited a new consumer in twenty years”.

What then has lead to such dreadful stagnation in what used to be a dynamic market.   Some suggestions might include:-

  • In order to reduce manufacturing costs plants have become more specialised and automated. This has made them much less flexible and the huge investment involved in change has made companies more interested in spending money on marketing to make the consumer buy what they can make rather than making what the consumer actually wants to buy
  • The huge amounts of money invested in mergers and consolidation in the past ten years has reduced the investment available for innovation and made businesses increasingly risk averse – the “risk” money has been spent buying other companies as a “cheap” way of expanding the business rather than through organic growth of the market and supporting the market through advertising.
  • Marketing and technical departments within company units have become extremely defensive – picking up a good idea from elsewhere has become a mark of failure “why do they need us if someone else’s idea is successful”.  Consequently where a product has been introduced from elsewhere the objective has been to make it fail rather than to make it succeed.
  • Knowledge and “feel” for a market and consequently the courage to back a new idea has all but disappeared as people move more frequently and will not risk being associated with failure.  I remember working in a couple of businesses where the marketing guys had such a total understanding of their market that they virtually never had a failure, but in both cases the people concerned had been in the business for years rather than months
  • Research has become king.  Today nothing happens without market research, focus groups, concept development and so on.  Not only is this in itself incredibly expensive, it slows everything down and people actually believe that the thoughts of six housewives in Bolton on a Thursday in November will actually tell them how sixty odd million people of many different persuasions will react to their product.  Not three, but one strike, one doubt, one negative and it’s back to the drawing board.

What then is the answer, how do we revitalise the confectionery market, because other consumer markets don’t seem to be so paralysed.  Look at snack foods, fabric conditioners, even household air fresheners and you will see plenty of evidence of original if at times slightly strange thought.  Would any other industry be blithely selling its consumers products invented in their current form twenty, thirty even forty years ago?