You should all be familiar with the rest of that phrase, reportedly coined by Mark Twain — you know, “Figures never like, liars always figure.” I suppose these days it’s called data. OK, dating myself as usual. Metrics. And, if you’re a sports fan, you’re definitely aware of how coaches and broadcasters love to pour over statistics to determine weaknesses and strengths in an opponent.
There’s no doubt those numbers can be useful. And certainly the world of sports has embraced the use of every kind of statistic, be it for individual performance, historical comparisons and/or team capabilities. In other words, if there’s a situation, there’s a stat.
Certainly the confectionery industry uses a slew of numbers, be it cooking times, temperatures, running speeds, bags per minute, changeover periods, loss man hours, well, the list goes on. Of course, the most important numbers involve sales, profitability, annual percentage growth, sell through, even new product launches.
So why the long discourse on numbers? Well, I like to think that the June issue, hitting newsstands in the next few weeks, as one of or “numbers” issues. Not only do we publish our annual Global State of the Industry report, but we also publish — and this is only our second time — the list of the leading 60 confectionery companies based in North America.
Our Global State of the Industry report relies on statistics from others, people like Euromonitor International, Mintel, Nielsen, the U.S. Commerce Dept., and the National Confectioners Association to name a few. These organizations have the resources and are good at number crunching.
Our overview this year, which actually is based on estimates from last year, paints a somewhat less than rosy picture for global confectionery sales. Many of the fast-growing emerging markets appear to have stalled a bit, be it a case of economies reacting to falling commodity prices tied to growth, regional conflicts or a myriad of other social-economic and political factors contributing to a slowdown.
Amazingly, those very mature markets, that is Western Europe and North America, have actually outperformed expectations. And, as best I can determine, innovative product launches have been the key contributor.
But that doesn’t mean that a slipup in projected sales in certain regions means those aren’t still poised for growth. Despite headlines that suggest China has lost its appetite for sweets, that’s really not the case. Yes, chocolate sales slipped in the first quarter, even dramatically for The Hershey Co., but the long-term forecast remains bright.
And here, it’s a case of numbers coming to the forefront again, as millions of middle-class Chinese gradually discover the joys of chocolate.
But determining and forecasting consumer behavior is always a tricky endeavor. Millions have been spent on revealing “consumer insights,” and I imagine millions more are headed that way.
Consumers can be a fickle bunch. At the same time, they are much savvier that marketers typically give them credit for, and certainly opportunistic. Hence, I credit Philip Stanley, general manager of Hershey Greater China, for reaffirming his company’s strategy, saying in a China Times article that the company is "not cautious at all in bringing in new brands into the Chinese market. Instead we are very excited to introduce the guilt-free and indulgent" chocolate product, which is the company's "highest repeat product" among its 80-plus portfolio.
"We have 10 percent of the market share in the Chinese chocolate market and we expect continued growth after the introduction of Brookside,” he added. “The average consumption of chocolate per capita in Switzerland is 10 kilograms every year and 5 kg. in the United States. But in China it is just a dozen grams, which means there is great potential for growth.”
This was after Hershey experienced a 47 percent drop in confectionery sales this past first quarter. Kudos to Stanley for not letting the numbers dictate strategy nor forestall execution.
So back to that initial phrase, “Figures never lie, but liars always figure.” In this context, I believe it should be, “Figures never like, but leaders always figure.”