Consumers seeking guilty pleasures in spite of economic turbulence
In spite of, or perhaps because of, tough economic times, many Americans are clinging to their smallest, most indulgent pleasures, with chocolate, alcohol and cigarette sales remaining solid.
New research from Mintel shows market sales for chocolate, cigarettes and alcohol strong and steady. Historically, these “sin stocks” have performed well during times of economic recession.
“Chocolate, cigarettes and alcohol again seem relatively recession-proof,” commented Marcia Mogelonsky, senior analyst at Mintel. “People might be cutting back or switching to store-brands, but they definitely aren’t giving up their small daily indulgences.”
Ms Mogelonsky points out that most Americans can still afford chocolate, cigarettes and alcohol, no matter how much their finances have been cut. “Because people are being so cautious with their spending, they feel they are entitled to small rewards and they won’t give them up easily.”
The sweet tooth does not seem to be connected to the hip pocket, with Mintel reporting the chocolate market growing quickly.
Innovative, dark and premium chocolates are extremely popular, so Mintel expects Americans to continue indulging in this favorite treat. The market research firm predicts 4% annual sales increases each year for the next six years.
A common vice, many smokers aren’t kicking the habit, even as prices continue to rise and health warnings abound. Cigarette and tobacco product sales increased 44% from 2003 to 2007 (to $103 billion), according to Mintel. As price and tax increases continue to take hold, Mintel projects that the cigarette and tobacco market will grow 28% through 2011 (to $132 billion).
Motivated by high petrol prices and expensive bar tabs, more consumers are opting to drink at home. But that doesn’t mean they’re drinking less.
New research from Mintel reveals the market for at-home alcohol is expected to reach $77.8 billion in 2008, a 32% increase from 2003 and the expectation is that both in-home and out-of-home alcohol sales will rise steadily in coming years.
History seems to be repeating itself, as the chocolate, cigarette and alcohol markets remain steady and robust. Mintel notes a sharp contrast to many other food, beverage and leisure categories, which struggle as fuel prices rise and the economy stumbles.