Health, market headwinds slow U.S. chocolate sales growth

by Monica Watrous
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Chocolate innovation in the United States tends to take a seasonal focus.

CHICAGO — Sales of chocolate confectionery in the United States surged 24% between 2009 and 2014 to $21 billion and are expected to reach $25 billion in 2019, but the pace of growth slowed in the past year, according to research from Mintel.

With 85% of consumers purchasing chocolate and 53% eating it weekly, the United States leads the global chocolate market. However, 2014 sales rose only 3% over 2013, as the market faced such challenges as intensifying health concerns, competition from chocolate-flavored food and beverage offerings, and higher costs. Higher prices for chocolate confectionery products, mostly the result of strong cocoa butter prices and a nearly 40% increase in domestic sugar prices in 2014, didn’t go unnoticed by consumers. Seventy-one per cent of consumers were aware of the increased pricing, but only 3% stopped buying because of it, Mintel said.

“The challenges facing the global market in 2014 have been related in part to supply, as the price of cocoa increased 9% in the first 10 months of the year, driven up by a number of factors, including increased demand, climate change and crop disease,” said Marcia Mogelonsky, director of insight, Mintel Food and Drink. “Looking toward 2015 and beyond, Asia will lead the way in market growth, while established markets such as North America and Europe will grow at lower rates. Consumers in these markets tend to prefer ‘favorite’ products and are not willing to experiment with innovative or novel — and typically more expensive — products.”

Chocolate confectionery sales in 2014 grew 19% in South Korea, 18% in India, 16% in China and 12% in Vietnam.

Among American chocolate buyers, 72% eat it as a treat, and 32% purchase more of it during holidays, such as Easter, Mintel said. Seventy-one per cent of consumers who purchase chocolate prefer options with mix-ins over plain or unflavored varieties.

Innovation benefited the global chocolate market in the past year, with new product launches growing 18% between 2013 and 2014. Europe led the way with 51% of all launches, followed by Asia Pacific with 21%, North America with 12%, Latin America with 9% and Middle East and Asia with 6%.

Chocolate innovation in the United States takes a seasonal focus, with 42% of last year’s introductions featuring festive shapes, flavors or packaging. Products with nuts and nut flavors are rising in U.S. launches, while plain and unflavored varieties have seen steep declines.

“The global chocolate market has seen considerable innovation in flavor and texture, including flavors such as beer and yogurt capturing consumer attention,” Ms. Mogelonsky said. “In addition to enhancing the flavor of chocolate confectionery with added ingredients, there has also been newfound focus on chocolate itself, with both white and dark chocolate gaining in popularity.

“New product development continues to be imaginative, with more exploration of flavors and textures outside the sweet flavor tradition. However, efforts to innovate will continue to run up against a consumer base that tends to be more conservative in product choice.”
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