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Mon 18 Feb 2008 04:00 AM

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Bags of enthusiasm

Manufacturers and distributors are focusing on premium plus points to shine on supermarket shelves.

Manufacturers and distributors are focusing on premium plus points to shine on supermarket shelves.

The GCC's confectionery category is growing at about 12% driven by its fast population growth and increased marketing activity, yet standing apart from rivals is tougher than ever.

Nadine Kabbani, Galaxy marketing coordinator for Mars GCC reveals its confectionery brands have a collective value share of 51%, however differentiation has arisen as a relentless challenge in the market.

Two or three players often have an agreement with the retailer to block space on the shelves, so many interesting products available don’t get the exposure.

"The chocolate category is becoming cluttered, and thus it is becoming more difficult to stand out. Speed of innovation is a challenge, as the competition is so fierce nowadays that the top players have to continuously innovate at a fast rate to stay ahead, and satisfy the growing and broad needs of the consumer and the customer [trade channels].

NPD is the lifeblood of the confectionery industry, and Dubai's Aramtec has capitalised on the increasing popularity of novelty and health-driven NPDs by revving up for a raft of new launches this year including Sunrice, Katjes, Poppycock, El Flamenco and Nimm2 Soft.

Kamal Nasrallah, sales and marketing manager for Aramtec argues that fast-moving products are often allocated greater shelf space and visibility than smaller players at supermarkets in the Middle East.

"Two or three players often have an agreement with the retailer to block space on the shelves, so many interesting products available don't get the exposure.

Competing against the key players also remains a constant battle for smaller manufacturers in the Middle East, nowhere more so than at the shelf point during range reviews where the majority of prime space is apportioned to the handful of fortunate confectionery giants.

The Middle East market is an interesting market in terms of taste profiles, according to Anthony, as many major global players have not achieved the same success in this market.

Kabbani concedes that the Middle East's confectionery category differs from other markets in terms of the governing taste profiles. "Consumers in the region prefer sweet milk chocolate to bitter chocolate, and there's more emphasis on sharing chocolates among family and friends.

Confectionery is a mature, habitually shopped category where health concerns around sugar consumption and artificial colours and flavours have long been recognised by consumers, and Aramtec has tapped into the demand for ‘grab and go' products filled with natural ingredients.

Aramtec has targeted young audiences with Storck's Nimm2 fruit candy, which delivers a delicious fruit filling and nine essential vitamins, and promotes the appealing combination of vitamins and sweets. The company is now set to debut Nimm2 Soft in the region as part of its expansion to tried-and-tested products.

Kabbani comments that good health has always been a core interest at Mars GCC, driven by its principle of responsibility towards consumers.

The company has been involved in community efforts to promote health and fitness, and developed the Al Haraka Baraka programme for more than 30 schools in the UAE, which promotes physical activity.

So what does Kabbani think are the most prominent trends? "We have witnessed demand for family packs for sharing, bulk shopping, and indulgent experiences.
Retailers are realising that to satisfy the wider market they have to offer a choice of brands and include some of the more niche names. Another of Aramtec's renowned brands is Toffifee, which offers crunchy hazelnut in caramel with nougat cream and a drop of dark chocolate on top.

Speed of innovation is a challenge, as the competition is so fierce nowadays that the top players have to continuously innovate.

The company has used the brand to grab a share of the booming market and supported its marketing efforts with a GCC-wide TV campaign for Toffifee in Eid last year.

Making a visual impression in-store is essential to steer people away from their routine purchases and trade up.

The idea for Storck's merci was to develop the first individually wrapped gift-giving chocolate in Germany, and the presentation has improved its impact on shelves and offered a significant sales opportunity for retailers as part of the novelties category.

In an effort to maximise confectionery sales, Kabbani recommends that retailers should strive to understand their shopper more and collaborate more closely with manufacturers including Mars - balanced between the top end and bottom end for its sales - to guarantee better category management in-store. Retailers should be selective, she says, and only propose quality products to avoid bad experiences.

"Retailers should leverage the power of the most-loved brands including Galaxy which is the top selling chocolate brand in the GCC, they are the ones the shoppers are looking for and sometimes they are difficult to find due to the inflation of new SKUs.

Aramtec started out in 1979, and it is now present in all of the retail channels after securing more than 40 front running confectionery brands.

The company has tripled in size since 2002. According to Nasrallah, the company's ambition for 2008 is to join the top ten or five companies.

Nasrallah says its decision to take on exclusive distribution for German-based brand Storck in the UAE was based primarily on the quality of its products.

"Storck wants to create products for everyone. It is extremely slow to introduce new products as they want to make sure they are 100% successful, and unwilling to move production from Germany," he says.

Bimal K Anthony, brand manager - retail division for Aramtec - currently "huge in Egypt, Europe and the US" - reveals the company plans to notably extend its portfolio this year, including the launch of Werther's Original Soft.

How does Anthony view the increasing competition?

"We stand apart for multiple reasons, but mostly because you won't find cheap brands in our portfolio.
We have a comprehensive range of high-end brands that presses most of the consumer buttons. Shoppers are now true connoisseurs of chocolate, demanding premium ingredients and exciting tastes.

The added-value range offers soft candy aficionados the creamy soft toffee with the classical creamy caramel taste of the original variant of hardboiled candies, which has been hugely successful in the region. The Soft toffees are offered in a bag with a blue coloured band wrapped around the package, clearly differentiated from the bag of the classic candy.

The Middle East market is an interesting one in terms of taste profiles, according to Anthony, as many of the major global players have not achieved the same success in this market.

Kabbani concedes that the Middle East's confectionery category differs from other markets in terms of taste profiles.

"Consumers in the region prefer sweet milk chocolate to bitter chocolate, and there's more emphasis on sharing chocolates among family and friends.

"We are trying to realise our vision, we are launching three new brands and will continue finding unique products," comments Aramtec's Anthony.

"We get enquiries from across the globe as we have the right set-up and attend exhibitions including Anuga. As far as the market is concerned, we're doing well," he says.

Mars GCC, formerly known as Master Foods Middle East, has been present in the region for more than 30 years. The company opened a local manufacturing facility in 1993 at Jebel Ali Free Zone, at which it produces its Galaxy range of chocolate for the region at a state of the art moulding plant, and currently has 250 employees across the GCC.

The company's eminent brands include M&Ms, Snickers, Twix, Bounty, Maltesers, Skittles, Mars and Galaxy, and it has stood out on crowded shelves with its string of recent launches. Its strongest market is Saudi Arabia, simply because it is the "biggest market.

Mars has cashed in on the opportunity to encourage impulse buys through an assortment of exciting formats, such as its Galaxy Senzi range - available in single, minis and five-pack formats - and its Galaxy G collection tablets - in hazelnut praline, almond mocha, dulce caramel variants.

Mars stands apart from rivals backed by its rate of innovation and its understanding of consumers and distribution channels, argues Kabbani.

She attributes the company's success to providing consumers with choice through the introduction of sub-brands and extensions of its ranges with more pack sizes and formats.

"Our plan is to continue our category innovation in 2008 to stay ahead of the competition and make our brands the preferred ones among consumers.

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