Praline brands creating new seasons

Praline is an ideal gift, provided its not a private label. This is what brands are counting on when they increasingly focus on the gift function. The praline market which has been growing steadily for years, actually showed decline in April and May this year, compared to 2007. – No recession has occurred in terms of the number of units sold, as demand for smaller sizes has increased. The market share of cheaper brands and private labels has grown – explains Andrea Gémes, trade marketing manager of Storck Hungária Kft. Strong expansion by discount stores where PL products dominate, especially Aldi is an explanation for this trend. – Hyper markets are the scene of the most intense competition in the praline segment – says Anikó Okos, brand manager of Bonbonetti Choco Kft. The influence manufacturers have on assortments or facing in hyper markets is decreasing. By the spring of 2008, private labels accounted for 25 per cent of total sales. Their quality is constantly improving, with really attractive products offered by some retail chains, at prices which are 20-30 per cent lower than those of comparable brands. The rise in consumer prices is one of the main reasons for the drop in demand. Prices are rising as a result of a drastic rise in the price of materials. – As Merci praline is primarily purchased as a gift, we have not seen any drop in sales, because price is not the main consideration for our customers – says Andrea Gémes. In contradiction with market trends, Merci and Toffifee pralines account for an increasing share of total sales of the brand. The dominance of the gift function might be an explanation for the scarcity of innovations in this segment. Manufacturers focus on attractive appearance, instead of potentially risky experimentation with new flavours. Marketing activities of manufacturers are focused on creating an increasing number of occasions when gifts are bought. Storck Hungária is no exception. – Apart from Christmas and Easter, we also try to create smaller “seasons” like the “back to school” period during the year. Storck products intended to take the pain out of going back to school include Toffifee praline, Knoppers wafers, Mamba chewing gum and Werther’s Original caramel – says Andrea Gémes. The secret of success for us is products of reliable quality and familiar flavour, coming in unusual shapes and sizes – explains Andrea Gémes. It is reassuring for customers to see familiar products in the Christmas season when a confusing abundance of products appear. POS activities reach their peak in November and December, when spectacular displays are used in smaller and large stores as well. According to Anikó Okos, promotions are not ideal for praline, as people usually do not buy two gifts instead of one just because they want to win something. – We try to build emotional attachment in customers towards our brands. We try to achieve this by sponsoring events and by using other indirect methods – says the brand manager of Bonbonetti.