The sugar confectionery market is driven by innovation and creative advertising. Market leader Trebor Bassett appears to be falling short on both fronts and yet it has done away with the role of marketing director (MW October 23).
Bruce Burnett’s job was a casualty of Trebor merging the roles of marketing and sales directors into one. Kevin White, who was appointed as vice-president of sales and marketing at Coca-Cola Schweppes Beverages (CCSB) only last month (MW September 11), was appointed to take on the merged role. White is swapping a 150m marketing budget at CCSB to join a company that last year spent just 2.8m on advertising.
Although industry sources suggest that Trebor is failing to meet the sales targets set by its ambitious parent Cadbury Schweppes, Trebor’s managing director John Taylor insists that the restructure is a move towards strengthening its marketing operations in response to a “very successful year”.
But in that “successful year”, Trebor’s value share of what is a static market fell from 38.9 per cent to 37.3 per cent (IRI Infoscan, year ending October) because all its main brands have slightly lost share, as has every other brand in the market. However, it did see a revenue increase from 211m to 222m.
“Our intention is to increase the level of consumer marketing resource, so this is not a forerunner to cutting back,” says Taylor. The more cynical would say that White has been pulled in to shake up and turn around Trebor’s marketing.
The total confectionery market is valued at about 5bn, with sugar confectionery accounting for 30 per cent. Trebor, the market leader, has brands including Liquorice Allsorts, Jelly Babies, Trebor Extra Strong Mints and Softmints, Maynards Original Wine Gums and Pascall Fruitang.
Other players include NestlÃ©; Rowntree with Polo; Mars; Warner-Lambert; Wrigley, with its chewing and bubble gum brands; and Leaf UK. Only the private-label manufacturers have increased their share – from 10.4 per cent to 11.3 per cent – although Trebor reaps the benefits from some of this as the largest supplier of own-label products.
Philip Morris put its UK sugar confectionery division, including Nuttalls Mintoes and Callard & Bowser, up for sale at the weekend. “This year has seen two bad periods for all confectionery manufacturers – April/May and the period since August, when sales have really hit the buffers,” says one source. “Trebor has not been getting enough volume and its sales are well below target.
“It’s getting harder to make money as the one thing that drives sales – television advertising – is getting more and more expensive. Retailers are also gaining negotiating power. Manufacturers are caught between a rock and a hard place. Trebor has only to fall below a certain level [of sales] for it not to be able to pay for advertising.”
Advertising spend on sugar confectionery has doubled in the past six years, from 19m in 1991 to 38m in 1996. Yet, despite being the biggest player, Trebor spent just 2.8m in 1996 compared with Wrigley’s 10m and Mars’ 5.4m (ACNielsen-MEAL).
Mike Davis, managing director of Leagas Shafron Davis, the ad agency which made Bertie Bassett and the Jelly Babies household names, suggests Trebor’s problems could stem from a lack of focused investment in its brands. “Trebor was always stretched with trying to make its budget cover several brands. They could never afford to keep sustained support for one particular product for too long,” he says.
Taylor denies this: “We recognise that you cannot stretch yourself too thinly. We pride ourselves on being creative and blending traditional media advertising with product sampling, PR and promotional activity.”
LSD lost its part of the Trebor business this year to fellow roster agency WCRS in a consolidation. Davis adds that one of the main reasons the agency lost the account was that Trebor had “dropped support” for Liquorice Allsorts and Jelly Babies.
“Sugar confectionery does not have the same emotional value for consumers that chocolate does,” says Davis. “There is much less brand differentiation and it is more of a commodity market. Many more products can get a small share of the action.”
The high point for sugar confectionery was in the first half of the 20th century, when chocolate was not readily available. There has been a gradual move away from sugar to chocolate confectionery but the overall market has been hit by healthier eating. According to NestlÃ©, the sugar-free mint market has more than doubled in size since 1993.
A second source suggests that Trebor’s problems are more to do with lack of creativity and innovation than budget. “Trebor may be taking too bland an approach as, over the years, it has lost quite a lot of creative expertise. When you are a big multinational, it is hard to have that creativity… and there are now more and more smaller companies being innovative.”
Ironically, it is those smaller companies which have gained market share this year. The merger of the sales and marketing director roles is Trebor’s response. But there is a feeling in the market that the company needs to do a lot more than that – it needs to be more creative and liberal with its budget.