Pure Indulgence
Shopping in duty free outlets is in large part motivated by the desire to reward oneself or looking for a gift. Which goes a long way into explaining the success confectionery is experiencing in travel retail. Pure indulgence would be an accurate description of the category and customers are much more likely to indulge in something sweet while travelling than at home. Add to this the tendency consumers have to trade up and buy more exclusive and premium products while travelling, and the proposition is particularly attractive for manufacturers of Belgian chocolates, whose products represent the high end of the confectionery sector.
Even though travel retail is still a relatively small market for Belgian chocolate companies, they are taking it very seriously, attending international trade shows and always looking at opportunities to increase brand image and visibility. “The duty free sector has a 10% share of our global turnover, which is a significant portion,” says Steven Candries, export and duty free director for Guylian. “It is so important that we indeed take it very seriously and look at it as the ideal way for worldwide brand building, both in terms of awareness and likeability.”
Part of the image building exercise rests on the recognition of those chocolates being Belgian. “Belgian chocolates are extremely fine, offering excellent taste and quality thanks to the selection of the world’s best cocoa beans,” Filip van de Vyver, global travel retail and duty free director for Duc d’O, tells Frontier. “Belgian chocolates are positioned as premium chocolates but within this segment we can make a further distinction between brands. Brands like Godiva and Neuhaus are positioned at the top end of the market while a brand like Duc d’O is more positioned in the middle with a perfect value for money proposition.”
The issue of ‘made in Belgium’ is a tricky one that the Belgian government is trying to enforce to protect chocolates actually made in Belgium from imitations using the same label. “This is something very sensitive and which we all have to try to defend,” Candries enthuses. “A product made in a certain country can carry the label ‘Made in …’ of the specific country where it is produced. Belgian chocolate is only made in Belgium. If ingredients or even blocks of chocolate or couverture chocolate is brought over to another country, then you cannot say that it is a ‘Belgian chocolate’. Manufacturers can only say that it is produced with Belgian chocolate but made in Malaysia, China, Korea, Czech Republic, etc.”
According to Candries, for chocolates to be identified as Belgian, they have to have had all their processes of mixing, refining and conching made in Belgium. “And of course,” Candries says, “if you really would like to go to the top, then a Belgian chocolatier uses only 100% cocoa butter and does not add the European allowance of 5% vegetable fats.”
Some might wonder why one should be so punctilious about what can and cannot be labelled as Belgian chocolate, but this distinction adds value to the product and represents a definite selling argument.
“The excellent taste and quality of Belgian chocolates certainly is a competitive advantage,” says van de Vyver. “Also, its good reputation is very important. All over the world people know the quality of Belgian chocolates. ‘Belgian chocolates’ is a selling argument, which is mostly not used enough on the packaging.”
The main challenge facing Belgian chocolates producers is imitation and abuse of the ‘Made in Belgium’ label. “The Belgian Food Federation has brought this forward in the European Parliament,” Candries says, “and it will be thoroughly defended. This is very important and we have to make sure that we do not allow any exceptions or we will set a precedent that will be difficult to stop.”
Aside from this, suppliers are confident that there still is plenty of room for growth, despite rising health concerns. “There is room to grow, probably shifting to the trend of ‘more healthy’. But the premium gift segment will stay strong with growth perspectives in Vietnam, China and India for sure.”
One advantage playing in favour of the supplier is the fact that most buyers know what they are buying very well. “Most buyers are connoisseurs these days,” Candries says. “They travel around and see what is happening. They know pricing elsewhere and in the high street. But we have a pretty good relationship. They know by now our historical background and our limitations, but we are always very open to discuss all topics relating to both our sales. So most of the time we find a middle ground where we both feel confident and comfortable. Without doubt they understand that Belgian chocolate is a must-have in the store.”
Although of course, with so many Belgian chocolate producers, it will be a tough job to convince buyers to purchase one brand rather than another. “Most retailers do understand our needs and requirements, but it is not always possible to realise things because of a lack of space. Sometimes it is a pity that a challenger like Duc d’O does not get the chance to prove that it deserves its shelf space. The brand has never failed during a trial period,” says van de Vyver.
Nevertheless, the opportunities are there and the category shows no sign of slowing down, which can only be a good thing for premium chocolate suppliers, particularly if they can bring added value to the table of negotiations. Travellers are indeed becoming more discerning and they often look for that which they cannot easily find at home, sometimes being enticed to buy something they would never buy in the domestic market. But travelling is an indulgence, and so is eating chocolate. The two go hand-in-hand and the future of premium confectionery certainly looks golden. n
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