Life is sweet for chocoholics who are seeing their favourite brands pour into alternative food categories.
Mars, although the first of the confectionery giants to enter the ice cream market, has been slower than rivals Cadbury and Nestlé to extend its products into alternative food markets, but now seems to have got its act together.
It was as long ago as September 1997 when Marketing Week first revealed that Mars was planning to franchise its brand name for use on a range of cakes, desserts and biscuits (MW September 19, 1997), having entered the ice cream market in 1984.
The company was reported to be in discussions with Northern Food’s subsidiary Rawmarsh Foods, which makes cakes, desserts and puddings.
But, more than 18 months later, it is the chilled desserts sector that will be producing some of the first fruits of those brand extension negotiations. Eden Vale, a subsidiary of Northern Foods, is understood to be launching two Mars spin-off chilled desserts in April.
Fans of Galaxy will be able to indulge in a rich chocolate dessert of the same name, packaged in 75g pots and priced at 99p for two.
Milky Way addicts will also be licking their lips at the prospect of 50g pots of a chocolate and white coloured mousse for the price of 1.09 for four.
How the new products will be marketed remains to be seen, as Eden Vale has just parted company with Bates Dorland, its advertising agency of more than 30 years. The official reason given for the break-up was disagreement over marketing strategy, but insiders say that Heinz, another client of Bates, was uncomfortable with client conflict issues.
It is unclear why it has taken so long for the 1997 negotiations initiated by Mars to result in a new product category for its range of brands.
One food buyer believes it could be because of the complexity of third-party agreements.
When the Mars Ice Cream bar was launched in 1984, it was done under a licensing agreement with Fredericks. Since then the company has switched production to a Mars factory in France and has transformed almost all its brands into ice cream products.
Credited with creating a new category, Mars was soon followed by both Nestlé and Cadbury into ice cream. Although Birds Eye Wall’s dominates the wrapped impulse ice cream market – it had 67 per cent (191m) of the 285m sector in 1998 (Source: Mintel) – Mars and Nestlé, despite their smaller shares (13 and 10.2 per cent respectively), are considered to be significant players in terms of brands and marketing support.
But will Mars have such power to wield in the newly ventured chilled desserts sector? It does lack the impact of being first to make inroads into the category – rivals Cadbury and Nestlé moved there long ago. Cadbury, in particular, has a long history of brand extension products, having launched its first licensed product, Cadbury Cake, through Manor Bakeries in 1982.
Director of brand development at Interbrand Newell & Sorrell Chris Cleaver warns that extending into other product categories only works well where the brand experience is reproduced. David Hallam, a food analyst with Williams de BroÃ« agrees: “The chilled dessert category is still growing, but you have to come up with new ideas to keep the consumer interested.”
According to a Williams de BroÃ«report, The Chilled Food Market, chilled dairy desserts is a fast growing segment, driven by product innovation particularly from the confectionery brands entering the market.
The report puts Unigate in pole position with a 40 per cent share of the market in 1998, an estimated 105m of sales. Unigate manufactures products through St Ivel under the Cadbury brand, such as the recently launched Cadbury’s Crunchie Twinpot, and its own low-fat range of Shape desserts.
The report also estimates that Northern Foods sells 47.8m (18 per cent) of chilled dairy desserts and Nestlé 31m (12 per cent).
Chilled desserts could prove to be another successful brand extension for the Mars products. But the move does not come without dangers. Consumers encouraged by the product innovation in the chilled desserts category may become increasingly promiscuous in their shopping habits and disappointed if the products don’t live up to the emotional and functional attributes of the original chocolate brand.
To coin a phrase – the proof will be in the pudding.