Sugar and Gum Confectionery - UK

- Chris Wisson, Senior Food Analyst

Some questions answered in the report include:

Is there demand for healthier sweets?
Is an ageing population a threat to the market?
How can sweet brands leverage the trend for sharing?
How can gum continue its recent recovery after years of decline?

Table of contents

Figure 1: Forecast of UK retail sales of sugar confectionery, by value, 2006-16
Figure 2: Forecast of UK retail sales of gum, by value, 2006-16
Market factors

Rising sugar prices squeezing manufacturer margins
Consumers to remain cautious over discretionary purchases
Declining user numbers a threat to market growth
An ageing population may be problematic for certain segments
Companies, brands and innovation

Figure 3: Brands’ retail value shares in sugar confectionery and gum, 2010

Mars and Cadbury under threat despite holding a third of the market
Healthier sweets grow in importance in product launches

Figure 4: New products in the UK sugar confectionery and gum market by most common claims, 2008-11
Figure 5: New product launches: own-label vs brands, 2008-11

Mars and Cadbury drive advertising spend back into growth in 2010
The consumer
Mints are the most widely eaten type of sweet

Figure 6: Usage of sugar confectionery and gum, by type, August 2011

Many consumers still like to treat themselves with sweets

Figure 7: Usage of sugar confectionery, by occasion, August 2011

Sharing and newness important for sweet eaters

Figure 8: Attitudes towards sugar confectionery, August 2011

Gum users look for functionality

Figure 9: Attitudes towards gum, August 2011

What we think
ISSUES IN THE MARKET
Is there demand for healthier sweets?
Is an ageing population a threat to the market?
How can sweet brands leverage the trend for sharing?
How can gum continue its recent recovery after years of decline?
FUTURE OPPORTUNITIES
Mood to Order
Free From
INTERNAL MARKET ENVIRONMENT
Key points
Rising price of sugar putting pressure on the market
UK obesity levels on the rise

Figure 10: Body mass index in the UK, 2007-11

Rising numbers of Brits are snacking

Figure 11: Trends in statements towards snacking, 2007-11

Consumers conflicted over health factors

Figure 12: Trends in statements towards healthy eating, 2007-11

BROADER MARKET ENVIRONMENT
Key points
Consumers likely to remain cautious and limit discretionary purchases

Figure 13: Consumer Confidence Index, monthly, January 2007-October 2011

Children’s pocket money on the rise
Population changes in the UK to benefit different segments of the market

Figure 14: Projected trends in the UK population, by age group, 2011-16

Decline in D socio-economic group likely to impact on market

Figure 15: Projected trends in the UK population, by socio-economic group, 2011-16

COMPETITIVE CONTEXT
Key points
Sugar confectionery market grows despite falling user numbers

Figure 16: Percentage use of selected categories competing with sugar confectionery, 2007-11

Chocolate confectionery dominates the snacking occasion
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Soft sweets the strongest segment for NPD

Figure 17: Product launches within the UK sugar confectionery and gum market, by segment, 2008-11

Own-label innovation booms

Figure 18: New product launches in the UK sugar confectionery and gum market: own-label vs brands,
2008-11
Figure 19: NPD in the UK sugar confectionery and gum market, by company, top ten, 2010
Figure 20: NPD in the UK sugar confectionery and gum market, by top ten companies, 2008-11

Healthier sweets grow share in NPD

Figure 21: New products in the UK sugar confectionery and gum market by most common claims, 2008-11

KEY THEMES
Flavour mix packs grow in popularity
Sweet success for sour flavours
Nostalgia continues to be popular with consumers
Significant growth in sharing bags
Notable growth in healthier and more natural sweets
NPD arrests the decline in the mints segment
MARKET SIZE AND FORECAST
Key points
Sugar confectionery and gum sales return to growth in 2011

Figure 22: UK retail value sales of sugar confectionery and gum, 2006-11
Figure 23: UK retail value sales of sugar confectionery and gum, 2006-11

Steady growth in value terms obscures underlying problems

Figure 24: UK retail value sales of sugar confectionery, 2006-11

Gum climbs out of its sticky decline

Figure 25: UK retail value sales of gum, 2006-11

Forecast
Sugar confectionery

Figure 26: Forecast of UK retail sales of sugar confectionery, by value, 2006-16
Figure 27: Forecast of UK retail sales of sugar confectionery, by value, 2006-16

Gum

Figure 28: Forecast of UK retail sales of gum, by value, 2006-16
Figure 29: Forecast of UK retail sales of gum, by value, 2006-16

Forecast methodology
SEGMENT PERFORMANCE
Key points
Soft confectionery: the sweet of choice

Figure 30: UK retail value sales of sugar confectionery and gum, by type, 2009-11

Soft Fruit sweets strengthen leading position in the market

Figure 31: UK retail value sales of sugar confectionery by type, 2009-11

Gum sales back on the rise

Figure 32: UK retail value sales of gum by type, 2009-11

MARKET SHARE
Key points
Market leaders under pressure as they lose market share

Figure 33: Market share of sales of sugar confectionery and gum, by company, 2008-11

Mars and Cadbury address their problems by overhauling brands
Soft fruits and mints show strong growth
COMPANIES AND PRODUCTS
Mars
Kraft Foods
Haribo
Nestlé
Swizzels Matlow
Perfetti Van Melle
Leaf UK
BRAND COMMUNICATION AND PROMOTION
Key points
Market advertising spend back into growth in 2010

Figure 34: Topline advertising spend for sugar confectionery and gum, 2007-11

Mars and Cadbury Trebor Bassett lead adspend in the market

Figure 35: Advertising spend for sugar confectionery and gum, by main companies, 2007-11
Figure 36: Advertising spend for sugar confectionery and gum, by top ten brands, 2008-11

Nestlé, Haribo and Ferrero driving growth through strong adspend
TV growing again as the preferred medium for advertising

Figure 37: Advertising expenditure in the UK sugar confectionery and gum market, by media type, 2007-11

CHANNELS TO MARKET
Key points
Independents hold a high, but falling market share

Figure 38: UK retail sales of sugar confectionery and gum, by outlet type, 2008-10

CONSUMER - TRENDS IN USAGE BY TYPE
Key points
Nine in ten adults eat sugar confectionery

Figure 39: Usage of sugar confectionery and gum, by type, August 2011

Half of sweet and gum consumers eat three to six types

Figure 40: Repertoire of usage of sugar confectionery and gum, by type, August 2011

Half of adults eat confectionery at least once a week

Figure 41: Frequency of consumption of sugar confectionery, August 2011
Figure 42: Frequency of consumption of gum, August 2011

Both confectionery and mints see usage fall

Figure 43: Percentage point change in usage of sugar confectionery and gum, 2007-11

Women have more of a sweet tooth than men
Over-65s remain the core users of mints
Gum segment driven by younger users
CONSUMER - TRENDS IN USAGE BY OCCASION
Key points
Sweets and gum most often eaten as a small treat to lift a mood

Figure 44: Usage of sugar confectionery, by occasion, August 2011

Single and dual-occasion users dominate the market

Figure 45: Repertoire of usage of sugar confectionery, by occasion, August 2011

CONSUMER - ATTITUDES TOWARDS SUGAR CONFECTIONERY AND GUM
Key points
Sharing and newness resonate most with sweets users

Figure 46: Attitudes towards sugar confectionery, August 2011

Healthier sweets strike a chord with many consumers
Chewing gum used by over nine in ten eaters for fresh breath

Figure 47: Attitudes towards gum, August 2011

Healthy chewing gum important to six in ten consumers
CONSUMER - TARGET GROUPS
Key points
FIVE TARGET GROUPS

Figure 48: Target groups, August 2011

Sweet lovers (20%)
Health-conscious (19%)
Comfort eaters (16%)
Groupers (25%)
Indulgents (20%)
APPENDIX - INTERNAL MARKET ENVIRONMENT

Figure 49: Agreement with selected lifestyle statements, 2007-11
Figure 50: Agreement with selected lifestyle statements, by demographics, 2011
Figure 51: Agreement with selected lifestyle statements, by demographics, 2011 (continued)
Figure 52: Body Mass Index, 2007-11

APPENDIX - COMPETITIVE CONTEXT

Figure 53: Trends in consumption of confectionery and snacks, 2007-11

APPENDIX - MARKET SIZE AND FORECAST

Figure 54: Forecast of UK retail sales of sugar confectionery, by value, best and worst-case forecast, 2011-
16
Figure 55: Forecast of UK retail sales of gum, by value, best and worst-case forecast, 2011-16

APPENDIX - CONSUMER - TRENDS IN USAGE

Figure 56: Usage of sugar confectionery and gum, by type, August 2011
Figure 57: Usage of sugar confectionery and gum by type, by demographics, August 2011
Figure 58: Usage of sugar confectionery and gum by type, by demographics, August 2011 (continued)
Figure 59: Repertoire of usage of sugar confectionery and gum, by type, August 2011
Figure 60: Repertoire of usage of sugar confectionery and gum by type, by demographics, August 2011
Figure 61: Usage of sugar confectionery and gum, by occasion, August 2011
Figure 62: Usage of sugar confectionery and gum, by occasion, by demographics, August 2011
Figure 63: Usage of sugar confectionery and gum by occasion, by demographics, August 2011 (continued) 117
Figure 64: Usage of sugar confectionery and gum, by occasion, by type, August 2011
Figure 65: Usage of sugar confectionery and gum by occasion, by type, August 2011 (continued)
Figure 66: Repertoire of usage of sugar confectionery and gum by occasion, August 2011
Figure 67: Repertoire of usage of sugar confectionery and gum, by occasion, by demographics, August
2011

Mints

Figure 68: Frequency of eating mints, 2007-11
Figure 69: Frequency of eating mints, by demographics, 2011
Other sugar confectionery
Figure 70: Frequency of eating other sugar confectionery (incl. sweets for children), 2007-11
Figure 71: Frequency of eating other sugar confectionery (incl. sweets for children), by demographics, 2011126

Gum

Figure 72: Frequency of eating chewing gum, 2007-11
Figure 73: Frequency of eating chewing gum, by demographics, 2011
Figure 74: How respondents would describe their financial situation, by demographics, July 2011

APPENDIX - CONSUMER - ATTITUDES TOWARDS SUGAR CONFECTIONERY AND GUM
Sugar confectionery and mints

Figure 75: Attitudes towards sugar confectionery, August 2011
Figure 76: Attitudes towards sugar confectionery, by demographics, August 2011
Figure 77: Attitudes towards sugar confectionery, by demographics, August 2011 (continued)
Figure 78: Attitudes towards sugar confectionery, by demographics, August 2011 (continued)
Figure 79: Attitudes towards sugar confectionery, by demographics, August 2011 (continued)
Figure 80: Attitudes towards sugar confectionery, by demographics, August 2011 (continued)

Gum

Figure 81: Attitudes towards gum, August 2011
Figure 82: Attitudes towards gum, by demographics, August 2011
Figure 83: Attitudes towards gum, by demographics, August 2011 (continued)
Figure 84: Attitudes towards gum, by demographics, August 2011 (continued)
Figure 85: Attitudes towards gum, by demographics, August 2011 (continued)
Figure 86: Attitudes towards gum, by demographics, August 2011 (continued)

APPENDIX - CONSUMER - TARGET GROUPS

Figure 87: Target groups, by demographics, August 2011
Figure 88: Usage of sugar confectionery and gum by type, by target groups, August 2011
Figure 89: Frequency of consumption of sugar confectionery, by target groups, August 2011
Figure 90: Usage of sugar confectionery and gum by occasion, by target groups, August 2011
Figure 91: Attitudes towards sugar confectionery, by target groups, August 2011
Figure 92: Frequency of purchase of gum, by target groups, August 2011
Figure 93: Health and healthy lifestyles, by target groups, August 2011
Figure 94: Eating habits, by target groups, August 2011

APPENDIX: UK RESEARCH METHODOLOGY
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy

Related research categories

By market: United Kingdom (in Europe)