PULSE REPORT

IRI Pulse Report Confectionery

Welcome to the Pulse Q3 2013 edition for confectionery. We hope you find it useful. Please do not hesitate to contact us if you have any questions or comments at !."ar#etin$%IRI&orld&ide.com.

Q3 2013

IRI&orld&ide.eu

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'(out the Report

)his confectionery report is one of ten super cate$ory reports desi$ned to sho& hi$h*level comparison and analysis for retail mar#ets across ma+or countries in urope. )his report contains data $athered from around urope. )his mar#et &as consolidated into one super cate$ory. )he report hi$hli$hts #ey metrics such as total sales fi$ures, mar#et trends, cate$ory shares, &inners and losers for urope and for individual countries. )he data has (een sourced from IRI retail data(ases and urostat, the statistical (ranch of administration for the uropean Commission. )he countries included in the report are- .rance, /ermany, Italy, the 0etherlands, 1pain and the !nited 2in$dom 3!.2.4. )he mar#et channels used for each country in this report are as follo&s-

Country
!2 1 6 07 I) .R

Channels used
5ypermar#ets, supermar#ets, dru$ stores and impulse outlets 5ypermar#ets, supermar#ets, hard discounters and dru$ stores, includin$ the Canary Islands 5ypermar#ets, supermar#ets, hard discounters and dru$ stores 5ypermar#ets, supermar#ets, hard discounters and dru$ stores 5ypermar#ets, supermar#ets, small self service, hard discounters and dru$ stores 5ypermar#ets and supermar#ets

.or analytical purposes, the data sourced from availa(le retail data(ases has (een consolidated to provide consistent results. 5o&ever, for some countries it has not (een possi(le to source data pertainin$ to certain cate$ories. When this occurred, it has (een documented in the notes section found at the end of the report.

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8n the Radar

7o& price chocolate cate$ories, ta#e home products and family pac#a$es are $uidin$ confectionary performance.

ECONOMIC FI URES INFLUENCIN

CONSUMER !E"#$IOR
#$ER# E 12 MONT"S INFL#TION R#TES

POPUL#TION IN MILLIONS 9an. 2012 Fran+e er3any Italy Netherlands S5a6n Un6ted 76n8do3 ,-.3 20.3 -0.3 1,.1 4,.2 ,3.4 9an. 2013 ,-., 20.-0., 1,.2 4,.1 ,3.2

UNEMPLO%MENT &'( 1ep. 2013 11.1 -.2 12.1.0 2,., 1.'vera$e 2012 10.2 -.10.1 -.3 2-.0 1.0

)P IN MILLIONS &*( 2012 2 032 201 2 ,44 200 1 -,- 01, ,00 ,32 1 040 -21 001 001 2013 3 stimate4 2 0-0 3-2 2 ,04 400 1 -,2 322 ,04 4-0 1 0-1 01, 1 2-4 020

1ep. 2013 /1.2 /1.2 /1.2 /3.1 /2.3 /2.1

'vera$e 2012 /2./2.4 /3./2.2 /2.3 /3.1

1ource- urostat, 1eptem(er 2013

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/78:'7 )R 061
TOT#L CONFECTIONER% $#LUE S#LES #N) ' C"#N E $S. PRIOR %E#R

/2.0' 91.1' /1.-'

$#LUE S#LES IN MILLIONS &*( Total EU )E U7 20 ,1, , 042 - 03,< 3 100 2 0-4 1 112 242

/1.4'

FR IT ES NL

/3.1' 91.0'
;(ased on an e<chan$e rate of =1.1>0 to the pound

TOT#L EUROPE /1.-' TOT#L CONFECTIONER% $#LUE S#LES FOR T"E L#ST SI= QU#RTERS

2 000

M6ll6ons

1 000

, 000

1 3,2 1 03, 222 ,-0 1 402 1 422 -23 213 203 1 412 ,30 220 4,2 1 ,24 1,2 221 2-1 1 ,14 3-, 200 212 1 3,2
309:u6n913

Fran+e er3any Italy ,41 Netherlands 1 4-, 201 123 121 1 2,0 S5a6n U7

- 000

4 000

2 312 1 ,20

130 1 424

3 000

2 000

30, 122 112 1 2-,

019o+t.912

1 000

0 019:u6l.912 309d;+.912 3193ars913 209se5t.913 Per6od End6n8

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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urope
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

AA.EC

Euros> 6n M6ll6ons

1A 2A0

2 3@>
11.BC

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S Chocolate confectionary, ta(lets and (ite siGes are common $ro&in$ cate$ories across urope. )a#e home pac#a$es and family products are performin$ (etter than impulse products. /ro&th across urope is driven (y ne& product innovation led (y main manufacturers such as "ondeleG &ith its (rand "il#a. .errero is $ro&in$ across several countries.

1A 2A0

M6ll6ons

2 3@> 1.B 0on 1easonal Confec tionery )otal = 1ales 1.0 1easonal Confectionery

C = vs. D'

urope includes- .rance, /ermany, Italy, 0etherlands, 1pain and !nited 2in$dom 1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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.rance
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R
HB.3C

C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

Euros> 6n M6ll6ons

2 A@0

@00

23.HC

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S 1easonal confectionary performed &ell, driven (y .errero. .erreroIs &innin$ strate$y is (ased on (oth #eepin$ investment in advertisin$ and launchin$ ne& formats of its (loc#(usters for aster 2013. 0on*seasonal confectionary suffered from a reinforcement of the crisis and the declinin$ of children concepts, such as 2inder 1urprise. 5o&ever, (ite siGes are &ell, than#s to a more active promotional drive. :ars are +ust flat, due to a (ad performance of .errero and 2inder :ueno. )a(lets are in decline (ecause of less innovations from 0estlJ and "il#a. 7indt #eeps $oin$ &ell than#s to its premium offer.

2 A@0

M6ll6ons

@00

0.H 0on 1easonal Confec tionery )otal = 1ales 3.B 1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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/ermany
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R
@E.3C

C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

Euros> 6n M6ll6ons

B >E>

>.HC

3@H

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S Folume declined overall, &hereas value $ains came mainly from hi$her prices K a trend &hich &ill continue into ne<t year K as many chocolate manufacturers already are confronted &ith hi$her prices for cacao (utter and other in$redients. Folume $ro&th continued for the savory snac#s se$ments, the (i$$est volume driver overall. In contrast, all chocolate cate$ories continued to decline, especially chocolate (ars, &hich lost due to declinin$ promotion sales of some of the (i$ players.

B >E>

M6ll6ons

3@H 1.> 0on 1easonal Confec tionery )otal = 1ales

0.>

1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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Italy
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R
AA.1C

C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

Euros> 6n M6ll6ons

1 A11

2E3
11.@C

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S Confectionery e<penditure in (oth seasonal and non*seasonal cate$ories declined. Chocolate ta(lets confirmed its positive trend (oth in value 3L>.EC4 and in volume 3L3.3C4, and is the least e<pensive cate$ory in terms of euroM2/. 1nac#s are declinin$ (oth in volume and value. "ondeleGIs "il#a performed very &ell, than#s (oth to its promotional strate$y and innovation in ta(let, snac# and (ite siGe cate$ories. Che&in$ $um sho&ed the fastest value decline 3*@.1C4 due to advertisin$ and a drop in ne& product development investment. :y the end of QE, &ith the ma+ority of sales (ein$ $enerated at the end of the season, &e &ill see if and ho& the crisis &ill affect Christmas confectionary sales.

1 A11

M6ll6ons

2E3 *2.1 0on 1easonal Confec tionery )otal = 1ales

*0.> 1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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0etherlands
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

@@.0C

1.0C

Euros> 6n M6ll6ons

A3E

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S )otal supermar#et sales in the third quarter of 2013 $re& (y1.EC. )otal confectionary had ne$ative $ro&th. Results of Q3 &ere &orse than the movin$ annual total 3"')4 and year to date 3D)64. Currently, there are only t&o cate$ories &ith positive $ro&th, namely throat drops and the more relevant liquorice. )he (i$$est a(solute loss in value came from chocolate. 'll types had ne$ative sales, &ith the e<ception of (ars and ta(lets. :rands &hich did sho& $ro&th in Q3 &ere "il#a, Ritter 1port, )ony Chocolony, :ros and 7on#a. )he candy cate$ory $re& on "') and D)6, (ut sales have fallen in Q3. )offeeM(on(on and (oiled s&eetMlollipops are responsi(le for this.

A3E

M6ll6ons

*1.0 0on 1easonal Confectionery )otal = 1ales A *1E.H 1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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1pain
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R
HB.3C

C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

AEA

Euros> 6n M6ll6ons

2BE

23.HC

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S )he confectionery mar#et is in a $ood shape, in spite of four years economic crisis, and is e<periencin$ $ro&th across the ."C/ mar#et 30.>C4. )his positive trend in value &as driven (y chocolate ta(lets and candies, the t&o (i$$est cate$ories. 'll leadin$ manufacturers performed &ell in value. /um and chocolates decreased in value. 1&eets $re& (y 23.3C. )his cate$ory has an important presence in the impulse channel, (ut in the last year, the retail channel has $ained more &ei$ht. Private la(el has $ained more presence, &hich has resulted in lo&er cate$ory price.

AEA

M6ll6ons

2BE

E.H 0on 1easonal Confec tionery )otal = 1ales

0.A 1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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!nited 2in$dom
C#TE OR% S"#RE OF $#LUE IN T"E L#ST %E#R C#TE OR% $#LUE S#LES IN T"E L#ST %E#R

@0.2C

Euros> 6n M6ll6ons

> 3>3

@.AC

>A3

0on 1easonal Confectionery

1easonal Confectionery

TOP - C#TE ORIES? E$OLUTION

Falue sales 3=4 and C chan$e vs. year a$o

7E% TREN)S Confectionery continued to sho& $ro&th in the !.2. throu$h the non*seasonal sector. /ro&th &ithin non*seasonal confectionery &as mainly driven (y the ta#e home format, &here promotions &ith display have dominated, (ut the level of promotions is startin$ to reduce. )he 8ffice of .air )radin$ Promotional $uidelines are startin$ to have an effect, as retailers such as 1ains(uryIs and )esco reduce the amount of promotions to ensure that products are not at a promoted price for lon$er than their everyday price. 0e& product development remains a ma+or driver for non*seasonal confectionery $ro&th, particularly in chocolate. Cad(urys "arvelous Creations, "altesers )easers and 2it 2at Chun#y 7imited ditions arenota(le e<amples. 1easonal confectionery sa& mar$inal declines, (ut this is li#ely to sta(iliGe (y end of QE as seasonal sales (ecome increasin$ly (ac#*&ei$hted &ith the ma+ority of sales (ein$ $enerated at the end of the season.

> 3>3

M6ll6ons

>A3 3.E 0on 1easonal Confec tionery )otal = 1ales *1.B 1easonal Confectionery

C = vs. D'

1ource- IRI retail data(ases? Period endin$ 2@ 1eptem(er 2013

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.inal 0otes

Notes on Cate8ory )e@6n6t6ons @or Countr6es 6ue to the diverse products found in individual countries across this mar#et, it &as necessary to consolidate the availa(le data into the cate$ories in this report. In some cases, it &asnIt al&ays possi(le to ali$n products across all si< countries, hence the need to hi$hli$ht any anomalies in the report. )hose e<ceptions are listed (elo&-

Con@e+t6onery )he 0etherlands and Italy data in this report includes toffee products, &hereas the other countries do not.

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Resources

)o $ain insi$ht into opportunities across specific cate$ories, se$ments, channels or retailers, contact your IRI client service representative re$ardin$ custom analyses levera$in$ the follo&in$ resources IRI In@oS+an CensusE is a syndicated retail trac#in$ service that ena(les manufacturers and retailers to acquire industry insi$hts used to ma#e (etter (usiness decisions. IRI Info1can Census utiliGes the data that IRI collects from $rocery, dru$, and mass merchandise retailers to provide the most comprehensive and accurate syndicated data offerin$ in the ."C/ sector. With access to accurate, $ranular detail (y cate$ory, $eo$raphy, measure, and time period, clients have the tools needed to develop mar#etin$ and sales strate$ies (ased on product performance, distri(ution, and promotion responsiveness. 'll data a(out alcohol comes from IRI In@oS+an CensusE. IRI Consult6n8 provides strate$ic insi$hts and advice, levera$in$ a variety of data sources, predictive analytics, ena(lin$ technolo$ies, and (usiness analyses to help ."C/ manufacturers and retailers address si$nificant sales and mar#etin$ issues effectively.

.8R "8R

I0.8R"')I80

Please contact Cristina 7aGGaroni, Consultant, IRI at Cr6st6na.LaCCaron6DIRIBorldB6de.+o3 or L 3@ 02 >2>H@ 333 &ith questions or comments a(out this report.

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