Capturing the market for niche confectionery product ranges

The issue of new product development amid highly testing times is an intriguing one, as Confectionery Production board member Graham Godfrey discusses in his latest feature

In spite of pressure on household budgets amid the cost of living squeeze, there is an increasing interest in “niche” confectionery products which generally attract a significant premium over standard products. For an industry tragically short of true innovation this is a very positive development.

The reasons for this from the manufacturers point of view are probably twofold:-
• Smaller and artisan producers see them as a way to attract interest and sales of their products and a way to compete with existing brands
• Larger manufacturers (to be slightly cynical) probably see it as a way to introduce higher margin products to their brands in addition to broadening their appeal.Leaving aside sugar free sugar confectionery, which has become mainstream in most markets, the main drivers seem to be:-
• Vegetarian/Vegan (Religion, Lifestyle)
• Gluten Free (Intolerance)
• Dairy free (either lactose intolerance or environmental concerns)
• Reduced Sugar
• Increased fibre
• Very high cocoa solids

It is possible to question some of these drivers – only about 8% of the general UK population are actually lactose intolerant to any degree although this is genetic and much higher in other population groups. Similarly about 6% have some degree of gluten sensitivity but true Coeliacs only constitute about 2% of the population.

However, totally accepting that people are free to adjust and vary their diet in any way they like, there is clearly quite a large a niche market for confectionery products which meet these various demands.

It is unfortunate that most of the current products which fall into these categories do not actually replicate the eating experience of more conventional products they seek to replicate and to some extent are “single purchase” products – buy it once, dislike it compared to mainstream products, no repeat purchase. In truth this issue applies to the wider food industry as well as confectionery

It seems reasonable that customers who purchase niche products, for whatever reason, should experience the same satisfaction and enjoyment as the products they are moving from. Should we as an industry be producing inferior products at a higher price just because a customer wishes, or needs, to make a change in their diet. Furthermore should we be loading up these products with a wide range of additives as a shortcut to trying to make them acceptable.

Category challenges

Each category and indeed each product has its own challenges in fully meeting consumer expectation while providing the desired ingredient change. Some are much more difficult to achieve than others but ultimately it should be our objective to either provide a closely similar product without an unreasonable price premium or to be positive and provide a completely alternative product which has its own consumer alignment.

We should exploit and develop technologies which will retain consumer satisfaction and loyalty rather than producing products which rely on a niche claim and clever labelling.

For example, a “dairy free” chocolate which is a moderate quality dark chocolate with rice flour or other powder simply added to it is not in any way a true alternative to milk chocolate. It is possible, however, to produce a good dairy free analogue to milk chocolate but it requires some technology, which has a cost. Quality products which satisfy the consumer need can justify a cost and will build brand and product loyalty. Consumers will turn (and already have turned) away from products they consider to be inferior in delivery and/or excessive in price.
We should also beware of making simplistic “environmental” claims, relying on consumers lacking the experience and knowledge to challenge those claims.

For example, dairy cows certainly produce methane and have done for thousands of years, but the proportion of dairy methane emissions attributable to the confectionery industry is fairly small, whereas the water demands for nut growing, particularly Almonds, are massive and causing major water shortages and environmental change in some regions, notably California. On that basis is Almond milk really environmentally preferable to Dairy milk? Perhaps, but do be prepared to make a supportable and well argued case based on accurate facts, not prejudices

Niche products fulfilling developing consumer needs are an extremely positive way for the confectionery industry to develop innovative products and equally to allow small manufacturers to start and develop their businesses. However it is vital that the new products on offer give the consumer the same experience and satisfaction as the products they are planning to displace. Consumers should not have to accept an inferior product just because it fulfils a specific need or demand

Related content

Leave a reply

Confectionery Production