Kit Kat - Global Confection

Global Confection

Kit Kat bars are produced in 13 countries by Nestlé: UK, Canada, Australia, South Africa, Germany, Russia, Japan, China, Malaysia, India, Turkey, United Arab Emirates, and Bulgaria. Kit Kat bars in the United States are produced under licence by The Hershey Company, a Nestlé competitor, due to a prior licensing agreement with Rowntree.

The year 2003 was a turning point for the Kit Kat bar as well as the confectionery industry in general. The popularity of low carb diets and the push to healthier eating stifled sales growth in many parts of the world. In addition, fierce competition from Cadbury's newly formed Dairy Milk superbrand also contributed to sales of the Kit Kat decreasing considerably in its home market of the UK, and threatened to depose it from its #1 position. The solution adopted by Nestlé and others was to increase dramatically the number of new and unique variations of their confections and market them as limited or special editions, whereby they would usually only be available for a few months at a time so as not to impact the sales of their permanent edition counterparts. The strategy initially reversed the decline of the Kit Kat and has been adopted worldwide by Nestlé, Hershey, Mars and others with similar success.

This has resulted in many new flavours and varieties of the Kit Kat and other confections appearing globally since then. While some flavours have been hits, many have flopped, alienating some consumers in the process, causing Nestlé to scale back on new releases.

In late 2005, Chris White, the managing director of Nestlé Rowntree abruptly left his job amid controversy that his marketing strategies may in fact have had a negative impact on Kit Kat and confection sales in the long term. Also, in September 2006 Nestlé announced they were eliminating 25% of their workforce in York and moving production of Smarties to Germany. One of the reasons given for the cuts and moves was so the York factory could be modernised for Kit Kat production to continue.

As dark chocolate has seen increased demand and favour worldwide because of its purported health benefits, September 2006 saw the launch of the four-finger Kit Kat Fine Dark in the UK as a permanent edition, as well as new packaging for the entire brand. Hershey had sold the four-finger Kit Kat Dark in the US several years previously as a limited edition, and has begun doing so again.

Nestle now manufactures two finger Kit Kats with natural flavourings, and for the first time, Kit Kats in this format are suitable for vegetarians. It is not known at this date whether or not other varieties will follow suit.