Mars bars and cars

Twix, Mars, innovation, confectionery

 

Seeing personal mobility from a confectionery brand’s perspective.

We believe, because we’re surrounded by the messaging, that all new cars are destined to be fully electric. When? It depends who you listen to. 2032? 2040?

In any event, somewhere between now and twenty years’ time, the national stock of cars will be on the way to being replaced. Old petrol and diesel-fuelled cars will be artefacts and the preserve of old folk. It’s all there in someone’s vision of a future, and current innovation funding competitions are alive with concepts to achieve this objective.

In twenty years, many of the Alpha Gens (who are about six years old today) will be out the other side of university, and the youngest of them will be in senior school.

In twenty years, you’ll be clinging on to a job that is threatened by Gen Ys, who will already be in their 40s. These guys are probably the last customers of the internal combustion engine.

In parallel with the time it takes to replace an entire new car fleet, the fallout from these changes also hits other markets: sales of fuel tanks fall; demand for carburettors, fuel gauges, spark plugs, engine blocks and exhaust pipes declines. This tapering has already begun, but the drop in volume isn’t yet pronounced enough to make a massive dent in the traditional motor industry supply chain.

Think of it like when interest rates go up. For a month, nothing happens to your mortgage payment – and then it does, and it hurts.

New cars keeping you away from a Mars bar.

Right now, around one or two new cars in ten are EVs of one sort or another. Assuming this trend continues, we aren’t very far away from a time when orders for internal combustion engines and their components will fall to the point where significant impact is felt across the supply chain. This isn’t to say that jobs will be lost overall, but it does indicate, very strongly, that skills and products will change.

Why do we care? We’re all consumers, and we’ll buy cars, and the only thing that will really change is how we power our commute.

Ignoring the obvious fall in petrol sales, if you sell confectionery, soft drinks, screen wash, newspapers, sausage rolls, ice cream, crisps, replacement bulbs, or even groceries through gas stations and service stations, things are going to change.

As a driver of an electric vehicle (car, bike, scooter, van), you won’t buy petrol or diesel and it’s unlikely you’ll charge your EV at a service station. In the UK, there are around 8,500 forecourts selling impulse lines (chocolate bars, ice cream, crisps). In the US, the number is thought to be over 120,000. The ‘impulse sector’ is called this because we pick up the product as we wait to pay for our fuel at the till. These chocolate bars and other ‘count lines’ are purchases that aren’t planned in the way that buying toilet roll and baked beans might be.

If you’re a confectionery brand owner, that’s a lot of feet that won’t be walking past your till-side display. That’s a lot of product not being distributed through wholesalers. It’s a lot of point-of-sale material no longer required. In fact, that’s a lot of things not being distributed, period. If you work in this market – for instance, if you’re brand owner or a wholesaler – the need for a plan is staring you in the face.

Where can you pick up that loss in sales volume?

Probably not in the usual places.

Walking the supermarket floor, busy parents steer around the sweets aisle to avoid the kids melting down when they’re told ‘no, not today’. From experience, I know that planned treat purchases tend towards high cocoa solids rather than cheap chocolate. I haven’t seen a Mars Bar in our house for eons, but I do find better quality products in the fridge door. I know what you’re thinking, Mr. Mars, but you get the point.

Talking to confectionery brands and watching how soft drinks brands have responded to the ‘Sugar Tax’, the effect has been to try to reduce sugar and to label snacks and treats as healthier. But when everything is relabelled the same way, and the sales distribution points have moved, what then? This will be a huge challenge for many brands – maybe not tomorrow, but soon.

Of course, not having a problem, but seeing one coming, is what we’d call trend identification. Seeing a trend, and believing it, might push you to begin thinking about positioning your brand to give your business a different prognosis than if you simply wait for the future to happen.

Fumbling the future.

There’s a well-known book called ‘Fumbling the Future’ about Xerox, who invented, and ignored, the first personal computer. It’s an easy case study to understand, because we know it to be true. It’s also derisory now, because we can’t believe Xerox could have been so myopic.

The Kodak story, about having the early digital camera and choosing to ring-fence its paper business, is told in training rooms around the world to similar incredulity.

The common denominator is that neither company believed in its own vision enough to capitalise on the opportunity.

In this case – the one where the impulse sector and all its contributing brands are facing a massive upheaval – the probability of things changing is signposted and spot-lit for all to see. And the risk of doing nothing is yours today.

We’d suggest you don’t wait. We’d suggest you develop some mitigating strategies, and that innovation has a part to play in that. We’d suggest we might be useful to you.

room44 will conduct an innovation audit to identify the unique challenges facing your industry and work collaboratively with you to deliver action plans you can use to fuel change and new growth at your company.

Seeing it differently. Future-proofing. It’s what we do.

Let’s talk.

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