Ferrero responds to challenging trading conditions with major Christmas investment
Ferrero is set to invest £3 million in a broad selection of new seasonal products for the UK and Ireland, including its classic series of boxed chocolates, figures and novelties for Christmas 2020, reports Neill Barston.
Confectionery Production attended the virtual launch for its expanded series, which significantly reaffirmed its pledge from last year to improve packaging on its ranges which will become 100% reusable, recyclable or compostable by 2025. This includes the creation of new copper trays formed from recycled PET for its Thorntons boxes, with the brand continuing to use at least 50% recycled content in its trays and fitments across the range.
Levi Boorer, UK customer development director said the business was ‘committed to finding long-term sustainable solutions for packaging.” As a result, the company will be producing clearer recycling icons across Ferrero’s wider series of products in order to encourage consumers to recycle more, with the Ferrero Collection series being trialled from September with 100% recyclable boxes.
During the virtual launch event, Boorer explained that the past few months had posed particular challenges for the business amid the pandemic, which had impacted on sales, with shopper confidence having been correspondingly down amid uncertain conditions.
He noted that UK sales figures had remained effectively flat during the coronavirus quarantine period in the UK, however, he said the picture in Ireland had in fact been particularly encouraging, with record gains for the period, boosted by a trend for more in-home snack eating during the past quarter. According to sector research, he expected growth for the festive season ahead, as families place an enhanced emphasis on meeting each other for the festive season where possible.
In addition, he said there was cause for optimism in that the wider confectionery sector had proved resilient, with research showing that the year ending December 2019 found confectionery sales in general up 3.6% compared to flat, or slightly reduced figures for other grocery segments, as the country contended with issues including Brexit, a general election and wider economic turbulence impacting on markets.
Speaking to Confectionery Production, he said that despite the tests posed to the business in recent months, he believed it had adapted swiftly to changed operating conditions that impacted on operating environments in many key sales outlets, through supporting colleagues and the wider community.
He said: “At Ferrero, like many other food businesses during the pandemic, we worked to guarantee production continuity and ensured we were not compromising the food supply chain in the UK. We know at hard times treats can spread a little happiness for our consumers, and we are proud to have been able to contribute to that. Community has always been important to us and it was important that we continued to protect the safety and wellbeing of our colleagues and our customers. We were active in supplying food banks nationally and FareShare with our products to support the vulnerable and donated 30,000 surgical masks to Ealing Council. We will continue to follow the advice of government, protect the safety of our colleagues and understand how we can support our industry and our communities during the constant evolution of this situation.”
Government strategy
As a result of the coronavirus pandemic, the UK government has produced an updated obesity strategy which urges responsible enjoyment of food ranges, including confectionery – which included a ban on perceived ‘unhealthy food’ before the watershed hour of 9pm.
In response, Ferrero said it is working with national authorities including Public Health England (PHE) on the issue of obesity and said that the business is committed to playing its part in addressing the issue.
The company said: “At Ferrero, we believe that all foods can be eaten in moderation as part of a balanced and varied diet combined with a physically active lifestyle. We have always offered our products in small, single wrapped portions because small portions allow people to enjoy their favourite products as part of a balanced diet. In fact, more than 95% of our products come in portions less than 150 kcal with clear nutritional information on pack.
“While we welcome the aims of the obesity strategy, we believe that the new set of proposals will have a negligible impact on obesity rates and unintended economic consequences. They focus too much on banning and controlling and not enough on encouraging and educating. In particular, they should support the role of portion sizes as a key factor in helping people to eat balanced diets and control calorie intake. We remain committed to engaging constructively with the Government, our industry bodies and others on this issue.”
Christmas releases
Speaking on the Christmas season, Boorer said: “Christmas is always an important point in the calendar for the confectionery industry, presenting a great opportunity for shoppers to enjoy the festive spirit. It’s important therefore that we offer the right products that meet the different shopper missions and needs, and will help retailers to grow their sales during this period.
“A strong core range is key during the Christmas period, as many shoppers love Ferrero products all year round. In addition to the popular established lines, we have been developing a number of new products to offer for Christmas 2020. Innovation is always important in generating excitement in the category, so we believe that the combination of our best-selling all-year-round products with new seasonal launches will help to excite shoppers over the festive period.
“Despite the recent challenges we have all faced, Christmas remains a time for families to celebrate. We’re optimistic that we can still deliver the same levels of emotional engagement in the shopping moment – regardless of how and where the celebrations take place this year. We are continuing to monitor the COVID-19 situation, ensuring our festive plans are in tune with the situation”.
In terms of releases for this Christmas, Ferrero said it is set to increase its activity with the Rocher, Collection, Raffaello and Thorntons ranges, with performance in this segment having improved by a total of 2.4%, with a new marketing campaign to follow.
Thorntons Classic also demonstrated key growth of 20% over Christmas last year, following the revitalisation of the range and establishing the brand as the number one assortment brand within the classic boxed category at Christmas. This year, Thorntons Classic is introducing new and remastered flavours, with revamped recipes for Nutty Caramel, Tempting Toffee and Creamy Fudge as well as the inclusion of a new Orange Blush option.
Thorntons Continental also had an impressive Christmas 2019, with the Continental Winter Markets box (278g) growing at 216%. The 142g box also performed particularly well, driving +25% growth. Ferrero will help retailers to build on that success by introducing remastered recipes for its Hazelnut Milano and Viennese Deluxe selection. Christmas 2020 will also see new nutella seasonal packaging across its 200g, 400g, 750g & 1kg jars, with new Christmas jumper pack designs.
“As the number one kids confectionery brand, Kinder is synonymous with Christmas, with our offering of novelties and figures helping to add extra magic throughout the season for shoppers. The kids confectionery category is worth £528m at Christmas , so it’s important that retailers stock products that shoppers will be excited to see in-store to pick up for their loved ones,” added Boorer.
Kinder Surprise will build on the performance of its popular 75g Santa figure, which was the number one novelty at Christmas in impulse last year, with 2020 seeing will seeing eight festive friends that can all link up to make one big team. A 36g version will include models of Santa, a penguin, a snowman and a Bear. The company will also return with an updated calendar series for Rocher, Raffaello and Rondnoir products.
