Bosses of Norfolk firm Kinnerton believe they have found a recipe to further success with new chocolate versions of ice-cream brands
- Credit: Matthew Usher
If Richard Reilly, managing director of Fakenham-based confectionery firm Kinnerton, looks as happy as a child in a sweet shop it is not hard to understand why.
He has successfully overseen the launch of three new products – chocolate versions of iconic ice-cream brands Cornetto, Magnum, and Mini-Milk.
The move is quite a coup for the EDP Top 100 business, whose Norfolk-made products currently enjoy sales of about £75m including its Marks & Spencer chocolate range as well as other confectionery made under licence from Thomas the Tank Engine to Disney.
Striking a similar deal with ice-cream manufacturer Unilever took more than a year from Mr Reilly's initial approach to developing the concept, getting the recipes right and carrying out consumer research.
In fact Kinnerton has invested £500,000 on new machinery for the three new production lines – including a specially adapted machine which makes the Cornettos.
In another first, the firm is also spending a similar sum on advertising and marketing the new lines – which have now gone on sale in Asda, Tesco and Morrison.
Mr Reilly admitted that convincing Unilever that the idea would work was the first challenge.
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While many chocolate manufacturers had successfully produced ice-cream versions of their products, the idea had never been done in reverse
'We went to them first off,' he said. 'The first exchanges are always difficult. These are huge companies and finding the right person is often difficult. But once we got to speak to the right person, they were very engaging.
The rational behind the move was simple – the business was keen to move from specialising in seasonal chocolates, such as Easter eggs, to one producing 'everyday' products. And it is paying off. The firm now employs more than 900 staff – another significant milestone – the vast majority of which are permanent posts.
The latest project alone saw it add 50 new staff – and if the two companies agree to extend the licensing agreement – either by adding more flavours or moving into overseas territories, beyond the existing UK and Ireland agreement, that could bring further growth opportunities.
'What we are trying to do is target the all-year-round business with the big brands so that we are working all year round,' Mr Reilly said. 'It's given us a great opportunity to increase our work force by 50 people.
'Going back a few years, our business was very much Christmas and Easter. We have had a business plan in place to develop our everyday growth for a number of years.
'We've been doing that in our traditional areas, which is private label, and our core kids' range that people know us for. We are always looking for significant brand opportunities and so we spoke to Unilver about their products.
'All the core technology exists, but we have invested in putting extra equipment in to produce these products correctly. In terms of the Cornetto, it's a brand new production line.
'It's a one-off in that it's a different product. We are used to manufacturing new products all the time, it's what our business is about. We are using ice-cream technology.'
In fact, such is the simplicity of the idea, you almost wonder why nobody had thought of it before.
'The big chocolate brands all went to ice-cream about 10 or 15 years ago and have all been very successful,' he explained. 'When you look at some of the bands Unilever has got, Magnum, Cornetto, and Mini-Milk, they are significant brands loved by the public .
'We felt we could do a good job in the chocolate arena in bringing those to market. Unilever showed some interest in the product and we put a huge effort into product ideas to come up with something that was acceptable.
'We conducted consumer research and the feedback was some of the strongest we ever had. From our point of view we wanted to support these fantastic brands and come up with a product Unilever had confidence in.
'We think we have achieved that,' Mr Reilly said. 'We took the products to market and started showing them to retailers. Our initial sales have been phenomonal. The product went into the shops about five weeks ago and the reaction has been fantastic. These products will be stocked in nearly every major retailer in the UK. These are products people will buy and repeat buy.'
The hope is that chocolate loving customers will be tempted to buy the new range when they are browsing the supermarket aisles or filling up with petrol – the moments when temptation kicks in.
Another key factor is the pricing.
The Magnums will sell for 65p each, the Cornettos are 55p and the Mini Milks are 40p. There are also multi-packs at £2 for Cornettos and Magnums, and £1.50 for the Mini-Milks.
'Whatever market you are in – if the product isn't good enough it won't work,' Mr Reilly said.
'We were determined to make sure this was good enough, and we think we have got that right. What was crucial was that it was priced at the same price as a Flake or a Mars bar. If you are looking in the supermarket or filling up for petrol and looking for a treat, we couldn't be any more expensive than those.'
With the new chocolates now on the shelves, can we expect to see other ice-creams appear in chocolate form?
If that is the plan, the firm is remaining tight-lipped for the time being – preferring to focus on the current brands.
'Unilever have some significant brands,' Mr Reilly said. 'There is enough scope and we can develop our relationship with them in the future. The place we are in at the moment - these are new. We want to talk about what's now rather than what's coming.
'This is a big project and as long as we are successful, this is a long-term project for us. You can see from the equipment we have invested in and the work we are doing, that it's not a one-off quick opportunity for us. We want this to be a long-term win. We will be advertising these huge brands, and the message is you can now find these products in the confectionery aisles.
'We are not giving up our seasonal business and we are still developing that. But this is a major step change - it's not just about recreating the core stuff, it's about being confident enough to invest. We have continued to build and develop the factory.
'We all feel enormously proud. If you were here at the end of March when the first one came off the factory line, there was a real buzz around the factory. This is something different.
'The fact that it has been done in triplicate has given a real excitement to the operation.'