In 2020, the Fazer Retail business, which includes the Fazer Cafés in Finland as well as the Gateau shops in Finland and Sweden, was integrated into the Fazer Confectionery business area. This strategic decision allows us to better use the cafés and shops to strengthen our consumer dialogue, test new concepts and learn from consumer behaviour.
Performance in 2020
Fazer Confectionery’s net sales slightly decreased from the previous year, with the decline mainly attributable to Fazer Retail, where the Fazer Café and Gateau businesses were heavily impacted by COVID-19 related restrictions, as well as to the complete standstill in Travel Retail. Confectionery sales in Finland, Sweden, Denmark, Russia and the Baltics were quite stable despite the disruption brought on by the COVID-19 pandemic. Sales, especially in Finland, was supported by consumers relying on brands they know and love during times of uncertainty.
COVID-19 changed consumer behaviour, which led to the polarisation of demand. Chocolate tablets continued to sell well and there was strong growth in candy bag sales, whereas demand for biscuits, pick & mix and products in the impulse category such as pastilles and chewing gum decreased. Seasonal sales related to Easter and Halloween suffered from COVID-19 limitations. However, Christmas sales exceeded expectations, especially in Finland and Sweden. The standstill of travel retail sales resulted in some lost net sales opportunities and temporary layoffs at the Vantaa and Lappeenranta factories.
We decided to close the Karkkila factory and move the production of xylitol pastilles and chewing gum to Lappeenranta. The strategic relocation of production will enable the development of the necessary efficiency and know-how in the future, which is important for maintaining our competitiveness.
We strengthened our position in Denmark, built our own sales organisation in Norway and grew our market share in Sweden, winning consumers over with our beloved classics and strong novelties. The COVID-19 restrictions and closing of the cafés and restaurants for two months in Finland had a profound negative impact on retail sales, but we rapidly responded to the crisis and changed our plans in order to adapt to the situation by managing our cost base. The comprehensive programme to reduce costs consisted of staff reductions and temporary layoffs, renegotiation of lease agreements, fixed cost reductions and optimisation of the product range.
Despite the challenging circumstances, the year was successful in many ways. We opened two new Fazer Cafés in Helsinki, renovated and opened Gateau stores in Sweden, and built a new artesanal bakery in Skogås, Sweden. In addition, we established new digital sales channels to support our business.
With many people working from home, on-line shopping has increased significantly. We have responded to the new circumstances by developing Fazer’s eCommerce platform, Fazer Store, which has consequently grown strongly.
Our most important confectionery innovations and launches in 2020 were the dairy-free OatChoco, a xylitol-sweetened milk chocolate, the Karl Fazer Crunchy bar and the Green jelly chocolate bar. One of the highlights of 2020 was the Tutti Frutti TikTok campaign winning several awards: Gold, best Social Media Platform and third place in the Influencer Communication category in Finnish Comms Awards, as well as first place in the Social media category at the European Excellence Awards. We were also, once again, selected as the most trusted confectionery brand in Finland.
Launching the Moomin chocolate lentils with sustainable Paptic packaging material replacing plastic and Makea Choco Moka are examples of our ongoing sustainability development. We also added recycling markings to all our packaging. The most important sustainability developments in Fazer Retail during 2020 included implementing the ResQ service in Gateau Finland to reduce food waste, improving waste tracking in stores, and changing all our take-away packaging to more sustainable options.
The changes in consumer behaviour due to COVID-19 are likely to remain across 2021 with gradual recovery. Consumers increasing desire for contact-free shopping and take-away sales is creating business opportunities that we will capture through the development of our online sales channels, assortment development and store design.
In the future, the shelves with crisps, sweets and biscuits will be merged into one snacking shelf, where impulse decision making will occur. This will lead to cross-category competition for the consumer’s attention. Winning at the point of purchase – in both digital and physical channels – will become more and more important. We will follow closely the trends and strive to develop consumer-oriented, innovative and delicious products.
Sustainability will continue to be at the core of our business. Everything we do starts from consumer insight and evaluating our actions from the consumer´s perspective.