How Sweet is it? Part 2

How Sweet is it? Part 2

By: Choc O’Lait   •   email: info@trunblocked.com

I’m sorry, but at Easter we all know that when we buy a leading brand chocolate egg in the supermarket, we’re paying through the nose for a special shape and fancy packaging. At Christmas we all know that the chocolate reindeer or Father Xmas per 100g is going to be far more expensive than the same weight in a bar form.

But there’s no excuse at an airport.

It is no wonder that confectionery brands are way ahead of other categories when it comes to producing Travel Retail/Duty Free exclusives. They have to – it’s the airport equivalent of Easter eggs and Snowmen which retailers hope the consumer won’t understand. Or, the consumer will be so knocked out by the ‘originality and creativity’ of the TR exclusive item that they won’t consider the actual value-for-money aspect.

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It’s not the brand’s fault. They are held to ransom by the retailers, whose ludicrously high margin expectations are the only way that they can possibly meet the guarantees to the airport authorities concerned and turn in a profit. But it’s the brands that tend to get the blame when the consumer feels that he/she is being taken for a ride. Plus it does nothing at all for the perception of ‘duty free’ – something which we have to accept is still what 9 out of 10 consumers think of airport shopping as – whether in or outside the EU. (ps. this is not helped when airlines like British Airways come down the aisles advertising ‘duty free’ on intra-EU flights!)

Going back to Peter Mohn’s review of South American airports, they alone should not be tarred with the confectionery price fiasco. What about the UK?

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How does one leading airport fare on price compared to a leading High Street supermarket? For a start, it’s actually quite hard to find any chocolate product that has an absolute like-for-like comparison. Among the top ‘every day’ brands from Nestle, Mars and Mondelez there’s a strong focus on TR exclusive, larger weight sharing bags, with added price incentives for buying 2 or 3 within a range.
Yet there are some almost direct comparisons to be made, however, and it’s not a good report. Take Lindt, for example. Its 300g Gold bar on the domestic market is 5 GBP (albeit in a less posh outer), but the airside airport price we found was a whopping 9 GBP. If you buy three bars, then the price comes down to to 18 GBP or 6 GBP each – but not everyone wants three! A 300g bar of Cadbury Milk, Whole Nut, Bubbly or Fruit & Nut – 5 GBP at the airport; 3 GBP for Cadbury Dairy Milk Big Taste Triple Chocolate Bar (sounds more yummy to me) – and, in fact, we found this at 2 GBP on promotion in two other leading supermarkets. As for Toblerone 360g – 3 GBP at the supermarket, 4.99 GBP at the airport (or again, 3 for 10 GBP – still more expensive!).
Other similar comparisons include Maltesers – 2 GBP for a 166g pouch at the supermarket, 4.99 GBP for 195g at the airport (less if purchased as one of three). Various Haribo sharing bags 450 – 500g: 4.99 GBP at the airport ( or three for ten); 450g tubs of Haribo Tangastics: 1.99 GBP at the supermarket. And so it goes on…..

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These chocolate/sugar confectionery brands generally price out at 1 GBP or less per 100g on the High Street, but more than 1.50 GBP, or even exceeding 2 GBP per 100g at the airport. 2.22 GBP, in fact, for a champagne-styled bottle of Celebrations and 3 GBP for that bar of Lindt!
Even buying in bulk doesn’t really cut it. A lowest/highest weight combination from Mondelez (Dairy Milk, Heroes, Wispa, Crunchie etc) at two for 13 GBP comes in at 1.82 GBP per 100g. Or choosing the heaviest items from a 3 for 10 GBP option, including Haribo, M & M’s, Snickers, Maltesers and Cadbury brands results in 1437g for 10 GBP. No surprise, then, that no one was seen buying anything in this area during the price survey.
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At every conference we tell each other that, in order to maintain and grow our business, we have to offer travelling consumers memorable and unique experiences and a sense of place. ‘Different’, ‘local’, ‘unique’, ‘authentic’ – these are all words we liberally sprinkle around on a regular basis.
Yet price…..  cannot be ignored. According to Mohn, between 20 and 28% of travellers interviewed in South American airports cited price as a reason for not visiting a duty free shop at all. And of those that did visit, 16% said prices were too high compared to shops at home; 17% said prices were too high compared to shops at their destination; and 15% said prices were too high compared to duty free shops at other airports. This is for all categories, of course, not just confectionery.
If our industry is to work, continue to grow – not just alongside passenger traffic growth, but in its own right – then we simply have to stop kidding passengers on price and value.
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Confectionery is a category that has been highlighted as having masses of potential for growth over the past decade, even longer. It was worth 7.9% of the global 62bn US$ business in 2015. Yet it appears to be flatlining. Mars International Travel Retail (MITR) believes that through its particular category vision it can unlock an additional 1bn US$ in sales by 2020. Other key brands have much the same story.
But can they?
If the industry continues to overprice product to such a ridiculous level, the sweet smell of success may well turn into bitter, dark disappointment.

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