Western European confectionery markets are hardly fast moving: annual growth is just 2.5%, despite enormous spend on marketing and product innovation. But while the scope to boost sales of chocolate and sweets is limited, one category is massively under-exploited: cereal bars account for 14% of Sweden’s confectionery sales, but the figure elsewhere in Europe can be as low as a couple of percent. Datamonitor’s Joanne Birtwistle looks at the opportunities in this chewy market.
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The confectionery market in Western Europe is reaching saturation. Whereas Eastern Europe has compound annual growth rates (CAGR) of around the 7% mark, Western European countries have slowed to a more sluggish rate of around 2.5%. As the western market reaches maturity, companies need to concentrate on new product development as a means to keep driving sales growth.
Marketing activities play an increasing role in the battle for consumer interest. This is reflected by the immense budgets some large confectionery manufacturers allocate to promotion. However, there is a relatively new product on the market with potential that has not yet been met – and indeed, this could all be a matter of poor marketing.
An under-exploited resource?
Throughout Europe, the cereal bars sector of the confectionery market remains largely an untapped source of potential growth. The UK confectionery market for example, is by far the largest in Europe, totaling US$8.1bn in 2001. The chocolate sector made up a massive 68% of the total market. Cereal bars, however, made up just 2.5% of the total market.
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By GlobalDataCompare these figures to Sweden, a much smaller confectionery market, but where cereal bars have achieved much greater penetration. The total value of the confectionery market in Sweden was $982m in 2001 and cereal bars held around a 14% share in the total market: the highest penetration in Europe.
In relative terms, whilst the UK consumer spends $3.89 a year on cereal bars, those in Sweden spend $15.09 each. By 2006, Datamonitor expects that the average Swedish consumer will eat almost four kilograms of cereal bars, compared to just 360 grams for each UK consumer.
Healthy Swedes go for organics…
In Sweden, there is a much stronger tradition for organic and healthy products. There is also greater control over manufacturers’ claims on labels whereas the UK is renowned for having the most liberal regulatory regime in Europe.
The Swedish cereal bars market has grown in response to changes in attitudes to healthy eating. Products enriched with fibers and vitamins are finding an ever-increasing market as these products are seen as a healthier alternative to traditional confectionery products.
Whilst it is unlikely to expect the cereal bar to match the popularity of the chocolate bar in the UK, the marketing moguls could perhaps use a few of the reigning champion’s tricks to boost its image.
…but Brit bars are just too sugary
Manufacturers could market this product on two levels. It can be placed as a health food snack, if it truly holds healthy properties such as being low fat, organic, low in sugar or vitamin enriched. The problem is that cereal bars in the UK are not all so healthy – but they continue to be marketed as health foods.
Unsurprisingly, the more sugary breakfast replacement bars, which have primarily been aimed at children, receive bad press from organisations such as the Food Commission when marketers claim that they hold any of the above attributes.
Instead, marketing teams should look at selling cereal bars for what they really are: convenience snacks. Consumers increasingly choose grab-and-go food: energy drinks, sugar energy tablets and just recently, glucose enriched chocolate bars are already on the market with the fast-living consumer in mind.
Marketed as a filling, energy-crammed snack, cereal bars can turn their negative sugar laden image into a positive. Cereal bars are still a healthier alternative to chocolate: aside from the energy boosting sugar content, they also contain slow release carbohydrate, making it much more likely that energy levels will remain steady rather than peaking and then plummeting again as they can after a large intake of sugar.
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