Friday, June 3, 2011

Godiva Moves Into Mass Market

by KELLI FONTENOTPublished May 2011 by Candy & Snack TODAY

NEW YORK — Premium chocolate supplier Godiva Chocolatier, Inc. is seeing increased sales and continued expansion of its Gems, tablets, bars, Pearls and panned items, says Chris Mattina, vice-president, North American wholesale. The line was developed exclusively for food, drug and mass channels, marking a major departure from the brand’s previous niche in Godiva retail locations and high-end department stores.

With chocolates in standup bags, boxes and bars, the presentations are designed for everyday gifting and self consumption. The move is meant to encourage candy dish behavior, offer convenience, introduce the brand to new consumers and capture brand loyalists in more widespread channels, according to Mattina.
“Growth in premium chocolate has been increasing year in and year out and that really is adding dollars to the category,” he tells Candy & Snack TODAY. “Godiva entering mass is not only adding incrementally to retail sales in the chocolate sector, but is also almost purely incremental to the premium chocolate market. Godiva is one of the most recognizable trademarks in the world from a luxury perspective, so this is a product that has built-in brand recognition.”

The line includes chocolate bars; standup bags of chocolate-panned fruits and nuts; Pearls, which are tins of mini round chocolate pieces; and Gems twist-wrapped truffles, caramels and solid chocolates.

Since its debut, the mass-market line has grown from six Gems SKUs and four bars to eight everyday and two seasonal Gems SKUs and 12 bar varieties. After a soft launch in September 2008, with a phased introduction in drug and grocery, Godiva broadened distribution through 2010 to include drug and food retailers, and is now expanding the line into Target Corp.

“We are the last of the major premium chocolate companies to enter this arena, but we wanted to do it in a very thoughtful and strategic fashion,” Mattina says.
Comparing the line with the company’s traditional Godiva offerings, Mattina says the main difference is the size of the pieces and the fact they are individually wrapped. For example, Gems caramels are 50 percent smaller than other Godiva caramels, and the entire range is twist wrapped to promote sharing in candy dishes, unlike Godiva’s gold ballotin gift boxes, he says.

“One thing we realized was that consumers weren’t buying the ballotin boxes and sticking them in the pantry and enjoying the chocolates from time to time throughout the day; our packaging didn’t lend itself to that behavior, so now we’re offering something that can suit that need in addition to lending itself as a casual gifting option,” he explains.

And while the formats are different, Mattina notes taste and packaging quality have not been sacrificed. “It’s the same chocolate, and that’s what is unique about the product,” he emphasizes. “We’ve taken the same quality we’ve used during the past 85 years, and are introducing exactly the same product, dressed differently.”

Taking Godiva To Mass Market
In fact, Mattina says the solid, caramel and truffle chocolates are the three most popular items sold in the classic ballotin boxes, so the company chose the topselling versions to build the Gems line.

Gems come in solid milk and dark chocolate, milk and dark chocolate caramels and dark, milk and white chocolate, raspberry, peppermint and French vanilla truffles. The brand is offered in gift box assortments including 5. 25-ounce boxes with a SRP of $12.99 and 8.2-ounce boxes with a SRP of $19.99. Standup gift bags hold single flavors and a variety of assortments in weights ranging from 3.1 to 4.25 ounces, with a SRP of $4.99. Shoppers emphasized the importance of affordable prices compared with the competition, Mattina notes.

Further extending the mass offerings, Godiva is capitalizing on a current trend with its Ice Cream Parlor line, Mattina says. These Gems truffles come in single-flavor standup bags of dark mint chocolate chip, and milk chocolate strawberry, as well as in assortments such as milk chocolate, dark chocolate vanilla and milk chocolate strawberry. They pack in standup bags featuring images of the products with scoops of ice cream.

Also as part of the Target stores rollout earlier this year, Ice Cream Parlor Gems debuted in reclosable acetate cup-shaped containers geared toward parents looking for convenient packs to add to Easter baskets, according to Rich Keller, global-vice president, marketing and innovation.

The range also features 1.5-ounce truffle bars in Oranges & Cream in white chocolate, Vanilla Sundae and Mint Chocolate Chip both in dark chocolate, and Hazelnut Gelato in milk chocolate. They have a SRP of $2.95.

Meanwhile, launching exclusively in Target stores in June are 3.5-ounce dark chocolate almond caramel and milk chocolate sea salt toffee caramel bars. The flat bars also come in a range of flavors including 50% Dark Chocolate Mint, 32% Milk Chocolate Salted Caramel, 41% Extra Creamy Milk Chocolate Hazelnut, 31% Milk Chocolate Dipped Strawberry, and White Chocolate Vanilla Bean. They have a SRP of $3.99.

Keeping Presentation Premium

To maximize the upscale appeal of the brand for mass, a Godiva team of visual merchandising managers evaluates the presentation of each product in the company’s retail stores, as well as in department stores, and is available to help mass retailers design sets with an upscale atmosphere, Mattina explains.

“If you look at the way products are displayed in our retail stores, their presentation is very luxurious and appealing,” he notes. “When we meet with retailers, we bring our visual merchandising managers to make recommendations on how to enhance product displays and placement.”

The company suggests various shelf liners and shippers to present Godiva Gems and bars, in addition to permanent displays such as lane blockers — high-end wooden fixtures — to hold standup bags, bars, tins and gift boxes.

Working with sommeliers and a staff of on-site chefs, Godiva has also developed shippers that give buyers the opportunity to cross-merchandise in the wine section, placing wine bottles on one part of the rack and Godiva items on the other. “Thierry Muret is our head chef. He comes from a luxury gourmet food background and has worked with us to develop great wine and chocolate pairings,” Mattina says.

Explaining the importance of presentation, he adds: “Consumers are looking at trading up to a certain extent. The economy lends itself to consumers cutting back on a lot of things, but one thing we haven’t seen them cut back on is the personal treat element — and the premium chocolate segment will continue to grow.”

The company has seen double-digit sales increases in department stores and its own retail outlets since its mass market debut, Mattina says.

“When Gems became available more broadly, with consumers able to experience and purchase product in a less intimidating atmosphere, they are more willing to shop our own retail stores,” he explains. “So we’ve expanded the category to the point where we’re inviting consumers to try it for the first time in the mass channels, and enjoy it in other venues as well.”

Reaching ‘Lady Godiva’

Mattina notes Godiva’s traditional distribution had been successful in reaching the target consumer, but adds: “She shops in a variety of places — from Neiman Marcus and our own stores to Kroger, CVS, Walgreens and Target.”

While shoppers in conventional channels might not be the same as those in Godiva and department stores, Mattina argues the company will continue to reach out to its typical consumers with the Gems line of standup bags and gift boxes.

“The consumer for Gems is also the Godiva consumer,” he says. “She sees Godiva as a gift, so we offered her the opportunity to get to Godiva all year round with the Gems brand. What we’ve done is just expand that 360-degree Giving from gifting in a formal capacity with the ballotin box to a more casual capacity with Gems and tablets.”

Mattina notes the company refers to its target consumer as “Lady Godiva,” a group comprising females ages 25 to 54. Of the women in that group, 85 percent are between the ages of 35 and 54, 90 percent of them make $80,000 or more a year, 41 percent have a post-graduate degree, and 60 percent have children.

“They’re really a paradox – someone who likes high-end luxury goods and likes to treat themselves, but also looks for a bargain,” Mattina explains.

The Godiva brand’s current marketing message focuses on relationships and connecting with people on occasions beyond holidays and giftgiving, according to Keller.

“One of the reasons we launched Gems is that it’s all about the candy bowl. It allows the opportunity to share our chocolates during everyday special moments,” he explains. “It could be as simple as a girl’s night out, or a book club night. It could mean ‘I’ve had a hard day, I’ve accomplished a lot and I deserve a reward.’”

The cornerstone of the campaign, Keller says, is a series of TV spots highlighting the Gems brand. In these ads, the final image is of the products on shelves in a grocery aisle, he notes. “It’s always important to leave them thinking about where they can get the product,” he explains. The tagline, he adds, is: “They’re now closer than you think,” which demonstrates the supplier’s emphasis on its move into more widespread retail channels.

Promoting the line in print, the company is running ads in targeted media including InStyle and Martha Stewart Living, as well as national FSIs, according to Keller. “In this economy, consumers are looking to save, and it’s great to give them a chance at trial,” he says. He notes the company’s most recent national FSI hit in April.

Reaching its core consumers digitally, Keller is active on behalf of the company on social networks such as Facebook and Communispace, which enables him to gain insights about the brand’s current loyalists. He says the campaign, launched in November, is very different from the company’s traditional marketing tactics, which include sponsoring upscale events such as the Golden Globes.

Ultimately, Mattina says volume was a factor, but not the main driver for Godiva to enter the mass market. He notes continued growth in the premium sector during the past eight years, and adds the company’s entrance has resulted in supplemental sales.

“We haven’t seen cannibalization between Godiva and items that have been on the market for a while,” he explains. “It’s adding sales. Each one of our retailers has come back to us and said we are adding incrementally to category growth.”