Chocolate innovation takes off globally, despite sales growth slow-down
The pace of growth in the global chocolate market slowed in 2014 as the industry faced challenges stemming from increased cocoa prices, according to findings from market research organisation Mintel.
However, chocolate innovation increased, with new product launches growing 18 per cent between 2013 and 2014.
“The challenges facing the global market in 2014 have been related in part to supply, as the price of cocoa increased 9 per cent 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,” Ms Mogelonsky said. “Consumers in these markets tend to prefer “favorite” products and are not willing to experiment with innovative or novel – and typically more expensive – products,” she said.
Growth by market in chocolate sales
Chocolate confectionery sales grew 24 per cent over a five year period from 2009 to 2014 to reach $21 billion in the United States, the world’s largest chocolate market. However, the pace of growth slowed in 2014, following a pattern that has evolved over the past few measurement periods, up only 3 per cent over 2013.
The global chocolate confectionery market experienced some high points in 2014, especially in Asia. Growth was strong in South Korea experiencing an increase of 19 per cent, 18 per cent in India, 16 per cent in China, and 12 per cent in Vietnam.
While chocolate confectionery remained popular in the US with 85 per cent of adults buying chocolate, an intensifying spotlight on health, rising costs, and competing chocolate-flavored offerings across food and drink, strains its hold. Mintel has predicted steady growth through 2019, with the US chocolate market reaching $25 billion.
Europe leads the way in innovation
The global chocolate market has benefited from innovation in the last year, with new product launches growing 18 per cent between 2013 and 2014. According to Mintel Global New Product Database (GNPD), Europe accounted for 51 per cent of all launches, followed by Asia Pacific 21 per cent, North America 12 per cent, Latin America 9 per cent, and Middle East/Africa 6 per cent.
Chocolate confectionery innovation within the US has been focused on seasonal products. Some 42 per cent of new product launches were classified as seasonal – largely comprised of new takes on familiar products, such as a change in shape or packaging. A look at flavor activity among chocolate confectionery launches finds that plain/unflavored varieties are seeing steep declines, while products featuring nuts and nut flavors are on the increase.
“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,” Ms Mogelonsky said. “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,” she said.
Chocolate a treat for US consumers
More than half (53 per cent) of US consumers said they ate chocolate once a week or more, according to Mintel.
Among chocolate eaters, nearly three quarters (72 per cent) said they consumed the confectionery as a treat. Further, 32 per cent of chocolate buyers purchase more chocolate around the holidays to have on hand for personal consumption. Similarly, one third of consumers (33 per cent) said they bought more chocolate around the holidays to give as gifts.
In addition to treating oneself, mood enhancement was a popular reason US consumers said they reach for chocolate (29 per cent). This rose to 41 per cent when looking at US consumers age 18-24.
When it came to chocolate preference, the majority of chocolate buyers (71 per cent) said they were looking for options with mix-ins as oppose to plain/unflavored varieties, according to Mintel.
Cost increases due to supply generate price awareness
The price of sugar was higher in the US in 2014, with domestic growers selling sugar at prices 50-100 per cent higher than in global markets. As a result, 71 per cent of respondents said they were noticing price increases in chocolate confectionery.
While the category is not considered cost prohibitive, and only 3 per cent of consumers have stopped buying chocolate altogether due to price increases, Mintel said price awareness was evident in the US market.