When Mars launched a vegan version of Galaxy in 2019 – beating rivals Cadbury and Lindt to the punch – it was met with an enthusiastic response. It was the first major supplier to create a vegan version of one of its biggest brands.
It followed with vegan bars Topic and Bounty, which sold well: the value of the whole range rose by 11% to £3.7million in the past year alone. [NielsenIQ 52 w/e 29 May 2022].
That is, until the entire range was delisted from Tesco, Sainsbury’s and Morrisons in recent months. They are still stocked in Asda, Co-op, Boots and on Amazon, but the write-offs have had a catastrophic effect on sales. In the four weeks to May 28, sales of the range fell by 61% [NielsenIQ].
So why did three of the UK’s biggest retailers drop such a successful proposition? And what can it tell us about the challenges of vegan chocolate?
When The Grocer broke the news of the write-offs, Morrisons said the range “did not meet the criteria for our health and wellness category or our no-category”. It is understood this was because Mars could not claim its bars were 100% dairy-free.
The packages carry a label indicating that if the recipes are vegan, they are made in a factory that uses milk.
“A milk allergy can be as dangerous as a peanut allergy”
It’s understandable that retailers want to crack down on any product that has the slightest chance of causing an allergic reaction.
“Consumers are more aware and actively looking at the back of the package,” says Hannah Legg, confectionery investor and former marketing manager at Thorntons.
Additionally, “three years ago you had fewer brands that could properly separate supply chain and manufacturing, so there was less choice.”
And it’s important to remember that “some people are really sensitive,” says Moo Free founder Andrea Jessop. “A milk allergy can be just as dangerous as a peanut allergy.”
Why then, did Mars refuse to allow its bars to be classified as basic confectionery? After all, that’s where the other big vegan chocolate players like Cadbury Plant Bars (which carry a little “may contain milk” warning on the back of the packaging) are tucked away.
“I would imagine [Mars] view free space as totally incremental to them,” says Legg. “[The big chocolatiers] fight all the time for margin and extra distribution. This was no problem at Asda, which has a dedicated vegan chocolate device.
Mars maintains that free-from is the right place for its vegan chocolate. A spokeswoman says he is “committed to a long-term future in the sans lineup” and plans to “continue to build our portfolio in this space.”
But those write-offs suggest it may have to go back to the drawing board and potentially relaunch “real” non-chocolate chocolates if it is to regain lost shelf space.
However, the complete elimination of any potential allergen is difficult and expensive. This requires a large investment or a third-party manufacturer, which increases costs and reduces the margin.
That and “there are very few factories that are completely free of it,” says Jessop.
Tricky, when Mars must be able to compete with Cadbury and Lindt.
Still, it’s proven to be a pioneer in catering to health and wellness trends lately: take its recently unveiled non-HFSS Triple Treat bars, or CO2COA, the all-vegan chocolate brand it launched. this week in the United States.
Who knows, Mars could be back in the free aisles of the UK sooner rather than later.