Interview: ISM: Guylian adapting strategy to compete in declining UK market
Mieke Callebaut says the company is always looking to innovate
Belgian confectioner Guylian has admitted to seeing a decline in overall confectionery sales in the UK, a key market for the company. Michelle Russell caught up with Mieke Callebaut, marketing and sales director for Guylian Europe and the US at the ISM confectionery exhibition in Cologne to find out what the company is doing to overcome this challenge and where its focus is for the future.
Guylian is no stranger to the global chocolate market, claiming to be one of the top ten selling boxed chocolate brands globally. With its headquarters in Belgium, the company has sales offices worldwide and, as a result, its products are sold in around 100 countries across Europe, Asia, Australia and America.
But it is the UK market that Guylian suggests is toughest. Mieke Callebaut, marketing and sales director for Guylian in Europe and the US, tells just-food the company is having to adapt its strategy in the UK to compete in what she suggests has become a highly-promotional and struggling confectionery market.
The marketing director says there has been a drop in the value of confectionery sales in the UK. "It is very clear from the latest data that there has been a decline in confectionery [sales], and when I see those figures ... that is major. I don't think the declines are as big in other markets," she tells just-food at ISM, the annual confectionery industry expo in Cologne.
"It is a combination of people downtrading. Instead of a box of 400g or 500g chocolates, they will buy a 250g box. They still have a little indulgence but at a lower price level."
Callebaut said "a very high amount" of promotional activity initiated by multiples competing for market share, has "devalued" the segment. "We are seeing volume declines but they're not as big as the value declines."
Callebaut says Guylian has had to adapt to the trading environment in the UK in order to compete effectively.
"Consumers have learnt by the trade that promotions are coming so they wait to buy. As a company with a premium offering we want to keep the quality of the ingredient so we don't want to downgrade on ingredients, but of course in such an environment we have had to adapt. We try to offer different exclusive variants to different retailers."
In time for the ISM show, Guylian added to its iconic Sea Shell chocolate range with the launch of a vanilla line. The product is available in either a plain milk chocolate shell or plain white chocolate - the latter a trend Callebaut said is growing in Europe.
"This year we have seen an interest in white chocolate. Dark chocolate still remains a niche product in markets like the UK and Australia where it has not really become mainstream. But a lot of leading brands are coming up with white chocolate products and that is what we are doing. We will of course stick to our shape every time. That is the identify of our branding."
Aside from product development, Callebaut said the company is always looking to innovate in packaging.
"There is innovation in packaging every year [from confectioners] and it is something we are also trying to do. Retailers want something special, something that will stand out on the shelf and that is what we are trying to do in terms of weight, size, look, etc."
As for international growth, Callebaut said the firm has "done pretty well" to date, particularly in Asia, a key market for Guylian since its acquisition by South Korean firm Lotte Confectionery in 2008.
"We have got good growth and this has been generated out of Asia where there is definitely organic growth. More and more people are coming into the category that can afford Western premium products. We are working on extending our presence here and in travel retail where we also have a good presence. Our brand has really grown in this category and that has helped us grow sales in domestic areas. We now have, for more than three years, a sales and marketing manager based in Shanghai."
Beyond Asia, however, Callebaut said there remain "some markets that are not yet filled in".
"Mainly Africa," she tells just-food. "We are there in a number of markets but we don't have the big volumes yet. We are also developing well in the Middle East, a region where this is a good disposable income and they have a sweet tooth and enjoy premium chocolates. Then we have South America, which is a booming economy. We are looking to strongly increase our presence there."
South Korea-based Lotte Confectionery Co. has entered into a deal to acquire Kazakh confectioner Rakhat JSC....
- What are the implications of Brexit for UK food?
- PepsiCo 2015 results, 2016 outlook - takeaways
- Richelieu Foods CEO eyes growth - interview
- The mixed fortunes of Kellogg's two main US arms
- Mondelez results and outlook - 7 things to learn
- PepsiCo's Nooyi: "macro challenges" will continue
- PepsiCo forecasts dip in sales growth in 2016
- Russia draws up plans for tax on palm oil
- Real Good Food acquires Chantilly Patisserie
- Kellogg US performance hits FY sales, profits