The recent Factfile on the state of the biscuit market (MW May 16) highlighted the impact of both promotions and range extensions in stimulating real value growth in one of the largest grocery market.
Both are tools that are the province of larger, established brands – of which there are many – in a market that boasts almost 100 per cent household penetration. The article correctly concludes that entry into this mature market is not easy.
Despite this, “other manufacturers” are making headway. A comparison of the reports for 1998 and 2001 (produced by the market leader) reveals that these “anonymous” players have collectively grown their value share from 10.8 per cent to 20.9 per cent; a growth far in excess of the total market.
Additionally over this period, the “special treat” sector of the market (the most added value area) has displayed growth of 49 per cent, while other sectors’ fortunes have reflected the extent of promotional and brand extension activity. Moreover, within this special treat trend, Bahlsen (one of the other manufacturers) has consistently outperformed this dynamic sector at 70 per cent.
The reasons are simple and are based on perspective. No new player ever succeeded by “aping” its larger competitor. However, the potential for different products – which the consumer sees as “twice the price, but more than twice as good” – to challenge existing market dynamics is easily comprehensible; HÃ¤agen-Dazs; Kettle Chips; and Fabulous Bakin’ Boys bear witness to this.
So, within the biscuit sector, ponder the significance of a special treat product, Bahlsen Choco Leibniz, that enjoys higher levels of consumer loyalty than all but McVitie’s Homewheat (AC Nielsen Homescan 52 weeks September 2001).
Why then do such products have a quarter of the major brands’ numeric distribution? The column inches that such information may merit is being eroded by the latest range extensions, in the pursuit of short-term volume by the major players, to the point of omission from the Factfile. Thus the status quo is encouraged, which ultimately re-confirms consumers’ existing repertoires.
Inclusion of such information in market reviews is paramount for the industry and its retail partners. Only this way can the inquiring minds of the strategists be encouraged to rise to the challenge of breaking the potentially vicious circle of big brands, more promotions, and range extensions, that is the article’s central theme.
More than ever, in a mature market such as biscuits, emerging brands need encouragement to give new trends additional momentum.
The true challenge for biscuit marketers, in the context of competition from secondand third-tier categories, is to ensure that the consumer continues to visit the biscuit fixture. Let’s encourage them, and recognise, by the inclusion of relevant and pertinent information, that the new strategies to achieve this are just as likely, if not more so, to come from companies who have a different perspective.