Occasion-specific range issue
September is here, and with Halloween, Bonfire Night and Christmas virtually around the corner, the shelves of the mults are being populated with a raft of seasonal, special-edition lines.
Well, most shelves, that is. While categories such as home-baking, confectionery and snacks have thrown themselves head first into the occasions business – launching ‘ghoulish’ takes on well-known sweets and cakes, and broadening their Christmas line-ups every year – the dairy industry has been noticeably more reticent.
Some seasonal tweaks to packaging are often as good as it gets – think snowflakes, bells and holly on cheddar packs at Christmas – and genuine occasions-specific NPD are thin on the ground. “The appetite for occasions among suppliers is muted,” says Hamish Renton of Hamish Renton Associates. “It’s seen as a lot of extra faff for not a lot of extra sales.”
So is it faff? How much potential do seasonal lines hold for the category? And what are the occasion-specific opportunities that dairy suppliers and retailers should take a serious look at?
“Dairy has perhaps become such a staple category that is often not given additional thought when preparing for occasion-specific times of the year,” says Barbra Wright, Director of Brand Identity and Packaging at Dragon Rouge.
Just as importantly, the fundamental dynamic of the dairy sector, including the timing of the milk year, play against the occasions calendar. “Sadly cows don’t pay any consideration to when special occasions are,” says Renton. “The industry has a lot of milk around April and May, and not so much in November and December, making it difficult for suppliers to divert milk from standard lines into additional special-occasions SKUs,” he adds.
To complicate matters further, many dairy products have short shelf lives – especially when compared with ambient categories such as cakes and confectionery – meaning they are inherently less suited to occasion NPD because suppliers can’t pace themselves through the year and build up stocks.
There are longer-life dairy products, of course – noticeably cheese, UHT milks and milkshakes as well as creams – which can be a bit more flexible in their production cycles, but even then the cost-benefits analyses often go against occasions-specific launches. People already want to buy cheese at Christmas, so there’s little point in suppliers investing heavily with special Christmas NPD, when they would be would be better off directing shoppers towards existing lines, believes Stephen Gregory, Head of Category Management at Bel UK.
Small incremental changes to packaging – such as the humble on-pack snowflake – are often the most sensible option, hey says.
For example, Bel typically experiences a 19% sales increase at Christmas from seasonal packs on cheeses such as Mini Babybel: They do have an impact because they get shoppers to the category at special occasions,” says Gregory. In fact, overly fancy limited and special editions might even put shoppers off, he warns. “At Christmas in particular, you have people coming into the category who are not very familiar with the products, so they tend to gravitate to known formats and brands.”
Having fared well with seasonal packs for Christmas, Bel is now taking this approach to Halloween, with the launch of limited-edition packs with ghoulish faces for Mini Babybel in October.
This makes it one of only a few dairy suppliers to have launched Halloween-specific lines – surprising perhaps, given the size of the opportunity and the potential to get creative. After Christmas and Easter, Halloween is now the third-biggest annual occasion in retail, and the mults are hungry for even more scary NPD. A YouGov poll last year put Halloween and Bonfire Night-related spend in the UK at £605m, and retailers and suppliers are expecting this to grow further this year. But as it stands, the dairy industry will see very little of that.
Renton says he’s not surprised. “With Halloween, you’re looking at a two-week sales window, but you face all the costs associated with a standard production line. Many suppliers are thinking, we’re not going to get payback on that.”
Crucially, it’s not just the brands that have struggled to do Halloween NPD in dairy; own-label has also been very quiet – and that’s a tell tale sign, believes Renton. “If this were viable, the retailers would already be doing it under own-label,” he says.
But Wright at Dragon Rouge thinks the industry can afford to be a little more daring – it is possible to develop bold branding that ties in with specific occasions but also works for the rest of the year, she says. For example, with film-inspired names such as The Evil Spread and Scream, the Fromage to Horror line of dairy products created by Dragon Rouge for The Dairymen (see left) would work as single SKUs for Halloween but could then be continued as a special edition, Wright suggests. “It provides the added property of collectability and would work as a limited-edition packaging concept for several occasions, not just Halloween, as long as films are involved.”
However, so far the appetite for such innovation appears limited. Cheese supplier Bradbury’s produced a Halloween cheese bauble for Morrisons in 2012, but says it’s not clear yet if the products will be coming back this year. Meanwhile, Rich Clothier, MD at Wyke Farms, says his company has dipped its toes in the Halloween market in the past by selling witches cheese’, but he’s much rather focus on getting the crucial Christmas cheeseboard is done well enough,” he says. “We don’t retain any theatre on the cheeseboard; it’s just a lump of Cheddar.”
The industry could also do more to showcase its vintage Cheddars and promote them specifically around occasions – Christmas and beyond, Clothier adds. “Maybe there’s even an argument for suppliers to pull together around a generic marketing campaign.”
Renton, on the other hand, thinks cheese with additives and convenience formats such as grated and sliced are probably best placed to tap into the occasions trend. “It’s quite easy to change the flavour – that’s an easier area to innovate in.” It’s not a popular suggestion in all parts of the dairy industry, however. “Every year, we – as a category – rehash the additives for Christmas, and then they’re all heavily discounted come January,” complains one Senior Dairy Executive. “It’s like we’ve run out of ideas.”
Some believe the secret to greater seasonal variety in dairy lies in smaller suppliers who can be more nimble than the big volume-producers. Organic cheesemaker Godminster, for instance, produces a heart-shaped truckle of Cheddar for Valentines Day every year, and Scotland’s Highland Dairy entered the Valentine’s market last year with a heart-shaped brie-style cheese. Meanwhile, Clothier says Wyke Farms is having some success with its Cheaster Egg – a giant Easter egg filled with Cheddar. “It’s developed a bit of a cult following,” he says, with Wyke Farms now exploring how it can take the concept forward.
At the more mainstream end of the market, Gregory believes the barbecue season in the summer and the post-Christmas dieting rush hold untapped potential for occasion-specific NPD from dairy. The diet season is already well cornered by yoghurt makers, but also holds great potential for cheese, he argues. “As a category, we don’t do so much around these occasions and we would really benefit if we did.”
Wright hints at a similar direction. Dairy brands not quite ready to take the plunge with fully fledged NPD in the vein of Dragons Rouge’s Halloween designs (see above) might find general seasonality or times of day a less scary route into occasions, she says. “Time of day is particularly interesting. With Belvita reshaping breakfast and Danone targeting different times of day and usage occasions with their new yoghurt brands Danio and Oykos, we can see that incremental growth is possible by positioning products in places that they have traditionally been locked out of.”
Whichever option they choose, suppliers have plenty to gain from going big on occasions. “There’s no denying that occasions provide brands with a license to put aside their typical constraints, improvise and innovate,” says Wright.
Such thinking outside the box could be just the ticket for dairy brands to differentiate themselves further against competitors in a highly competitive market. Whether through incremental tweaks to packaging, occasion-led marketing or even fully fledged themed NPD, here’s hoping that when September 2014 comes around, dairy will at last be in line for a greater share of special occasions.