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Luxury Chocolates - UK

Published by: Mintel International Group Ltd.

Published: Sep. 1, 2004 - 125 Pages


Table of Contents


Introduction and Abbreviations

The paradox
Definitions
Consumer research
Lifestage and Special Groups
ACORN
Advertising data
Abbreviations

Premier Insight

Executive Summary

Increasingly important market
Feel the squeeze
Consumer needs - emerging trends revealed
Biggest manufacturers and their brands...
...correlate with advertising support
Multiple grocers increasingly important
Consumers - a host of opportunities
The future

Market Drivers

PDI growth feeds indulgence
Figure 1: PDI and consumer expenditure, at current and constant 1999 prices, 1999-2009
Figure 2: The rise in PDI and consumer expenditure, as an index at current prices, 1999-2009
Shifting demographics
Figure 3: Trends and projections in total UK population, by age group, 1999-2009
Perception challenge for older adults
Families are shrinking
Less discerning palates
Smaller households
Figure 4: Trends in household size, 1999-2009
Fair trade and organic
Sophisticated tastes
Other factors
Psychological love affair...
Figure 5: Chocolate consumption in the leading world economies, kg per person per annum, 2003
...and now for some science!
Variety feeds interest
Need-states
Staying in is the new going out
Brand extension and transferral rather than proliferation
Packaging structure and gifting
The obesity frenzy
Shopping methods...and men

Market Size and Trends

Putting the market in context
Figure 6: Total UK trade dispatch data for sugar and chocolate confectionery, 1999-2004
Immense and powerful
Sugar responsible for volume growth
Figure 7: UK trade dispatch data for chocolate confectionery, 1999-2004
Chocolate volume stagnant
Value encouraging
Volume downturn looming?
Figure 8: Average price of chocolate confectionery based on trade dispatches, 1999-2004
Figure 9: UK retail sales of chocolate confectionery, 2001-04
Figure 10: UK retail sales of chocolate confectionery, by sector, 2001-04
Countlines struggle
Boxed - second-largest sector
Pop-in-mouth blossoms
Bars - important for luxury
Consumer need-states
Figure 11: UK retail sales of chocolate confectionery by consumer usage occasion, 2002 and 2003
For me - slight decline
For you - taps into busy lifestyles
For us - heartland of sharing
For me and us (In-home)
Luxury chocolate
Figure 12: UK retail sales of luxury chocolate confectionery, 1999-2004
Strong and growing
Figure 13: Percentage of total chocolate market represented, by luxury chocolate sector based on retail prices, 2001-04
Increasingly important
Figure 14: Average price of luxury chocolate confectionery based on retail prices, 1999-2004
Prices are the answer

Market Segmentation

Figure 15: Luxury chocolate market sectors, by volume and value, 2001-04
Super-premium storms ahead
Mainstream struggles - feel the squeeze
Premium doing well - but at what price?
Figure 16: Selected product sectors within the luxury chocolate market, retail values, 2001-04
Mints are stable
Liqueur revival
Blocks bound ahead
Consumer need-states
Figure 17: UK retail values for the luxury chocolate sector, by consumer usage occasion, 2002 and 2003
For me
For you
For us

The Supply Structure

Manufacturer shares
Figure 18: Manufacturers' value shares in the UK luxury chocolates market, 2000 and 2003
Cadbury focuses elsewhere (...but not for long)
A similar tale for Masterfoods
Nestlé - active and determined
KJS - focused and winning
Thorntons - sector-specific and number two
Ferrero - fastest growth and more to come
Brand shares
Figure 19: Selected estimated brand value shares in the UK luxury chocolates market, 2003
Companies and brands
Brand Audit
Figure 20: Companies and their brands in the UK luxury chocolates market, 2004
Bendicks (Mayfair) Limited
Cadbury Trebor Bassett (CTB)
Elizabeth Shaw Limited
Ferrero UK Limited
Green & Black
Guylian (UK) Limited
Kraft Jacob Suchard
Lindt (Chocoladefabriken Lindt & Sprüngli (Schweiz) AG)
Masterfoods (Mars)
Nestlé
Thorntons
Other suppliers
Ashbury Confectionery Limited
Charbonnel et Walker
CHOCaid.com
The Day Chocolate Company
Duc d'O
Godiva
Goldkenn
Hotel Chocolat
House of Dorchester
Lily O'Briens
Lir Chocolates
New Tree
Ritter
Swiss Delice
Own-label
New products
Ingredients and Production Positioning
Ethical remains relevant
Brand extensions...
...and entrants from 'the big boys'
White chocolate is increasing in popularity
Celebrity endorsement - the flood gates open?
Fresh, chilled chocolates - a golden opportunity?

Advertising and Promotion

Above the line
Figure 21: Main monitored media advertising expenditure on luxury chocolates, 1999-2004
Healthy support
Figure 22: Main monitored media advertising expenditure on luxury chocolates, by high-spending brands, 2001-04
Few large contributors
Ferrero leads
Hotel Chocolat - Internet retailer number two
Nestlé - determined to make inroads
Lindt - a strong number four
Thorntons
Below the line
Figure 23: Selected below-the-line promotions in luxury boxed chocolate, 2003-04
For brand's sake - no BOGOF!
Figure 24: Selected below-the-line promotions in luxury block and bar chocolate, 2003-04
Different mechanics for blocks

Distribution

Figure 25: Distribution of luxury chocolate, by retail channel, 2000 and 2003
Multiple grocers lead - as usual
Impulse slows
Specialist retailers and confectionery stores
Internet - best of both worlds
Category segmentation

The Consumer

Figure 26: Trends in the purchase of chocolate assortments and other boxed chocolates, 1999-2004
Penetration fluctuates
Heavy users - gifts and sharing
Medium users - 'the big night in'
Light and non-users - accessibility vital
A new segmentation?
Consumer perceptions
Figure 27: Consumer perceptions of luxury chocolates, 2001 and 2004
Erosion of product values
Cocoa solids a mixed blessing
Super-premium gains ground
Confusion may be good!
Figure 28: Changes in consumer perceptions of luxury chocolates, by gender, 2001-04
Women are more savvy
ABs expect a high level of cocoa solids and fresh ingredients
Figure 29: Top five perceptions of luxury chocolates, by socio-economic group, May 2004
Purchase occasions
Figure 30: Changes in the reasons/occasions for buying luxury chocolates, 1999-2004
A sorry tale to tell
Marketeers - pull your socks up!
Figure 31: Reasons for buying luxury chocolates, gender perceptions, 2001-04
Almost identical behaviour
ABs are key
Figure 32: Reasons/occasions for buying luxury chocolates, by socio-economic group and supermarkets used, May 2004

The Consumer - Detailed Demographics

TGI demographics
Figure 33: Weight of usage of chocolate assortments and other boxed chocolates, by gender, age and socio-economic group, 2004
Figure 34: Weight of usage of chocolate assortments and other boxed chocolates, by marital status, working status, household size and region, 2004
Figure 35: Weight of usage of chocolate assortments and other boxed chocolates, by lifestage, presence of children and Mintel's Special Groups, 2004
Consumer attitudes
Figure 36: Consumer perceptions of luxury chocolates, May 2004
Figure 37: Female perceptions of luxury chocolates, 2001 and 2004
Figure 38: Male perceptions of luxury chocolates, 2001 and 2004
Figure 39: Consumer perceptions of luxury chocolates, by gender, age and socio-economic status, May 2004
Figure 40: Consumer perceptions of luxury chocolates, by lifestage and Mintel's Special Groups, May 2004
Figure 41: Consumer perceptions of luxury chocolates, by marital status, working status, presence of children and household size, May 2004
Figure 42: Consumer perceptions of luxury chocolates, by region and ACORN categories, May 2004
Figure 43: Consumer perceptions of luxury chocolates, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Figure 44: Other consumer perceptions about luxury chocolates, by gender, age and socio-economic status, May 2004
Figure 45: Other consumer perceptions about luxury chocolates, by lifestage and Mintel's Special Groups, May 2004
Figure 46: Other consumer perceptions about luxury chocolates, by marital status, working status, presence of children and household size, May 2004
Figure 47: Other consumer perceptions about luxury chocolates, by region and ACORN categories, May 2004
Figure 48: Other consumer perceptions about luxury chocolates, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Consumer motivations for purchase
Figure 49: Reasons/occasions for buying luxury chocolates, May 2004
Figure 50: Female perceptions of luxury chocolates, 2001 and 2004
Figure 51: Male perceptions of luxury chocolates, 2001 and 2004
Figure 52: Reasons/occasions for buying luxury chocolates, by gender, age and socio-economic status, May 2004
Figure 53: Reasons/occasions for buying luxury chocolates, by lifestage and Mintel's Special Groups, May 2004
Figure 54: Reasons/occasions for buying luxury chocolates, by marital status, working status, presence of children and household size, May 2004
Figure 55: Reasons/occasions for buying luxury chocolates, by region and ACORN categories, May 2004
Figure 56: Reasons/occasions for buying luxury chocolates, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Figure 57: Other reasons/occasions for buying luxury chocolates, by gender, age and socio-economic status, May 2004
Figure 58: Other reasons/occasions for buying luxury chocolates, by lifestage and Mintel's Special Groups, May 2004
Figure 59: Other reasons/occasions for buying luxury chocolates, by marital status, working status, presence of children and household size, May 2004
Figure 60: Other reasons/occasions for buying luxury chocolates, by region and ACORN categories, May 2004
Figure 61: Other reasons/occasions for buying luxury chocolates, by media usage, time spent watching commercial TV and supermarkets used, May 2004

Consumer Attitudes and Typologies

Figure 62: Preference and attitudes towards chocolate, May 2004
Predictable
Figure 63: Chocolate preferences, by age, May 2004
A new sector on the horizon?
Own-label in pockets
Consumer purchase behaviour
Figure 64: Repertoire purchasing of luxury chocolates, by gender, age and socio-economic group, May 2004
Heavy users - twin peaks!
Light users: a time bomb opportunity
Repertoire purchase and actual purchase occasions
Figure 65: Repertoire purchasing of luxury chocolates and actual occasion bought for, May 2004
Why not?
Break out of seasonal peaks
Chocolate typologies
Cluster 1 - Chocophiles (17% of sample)
Cluster 2 - Child-focused (17% of sample)
Cluster 3 - Milkers (31% of sample)
Cluster 4 - Non-/infrequent Eaters (35% of sample)
Consumer typologies and luxury association
Figure 66: Consumer typologies and perceptions of luxury chocolates, May 2004
The Non-/infrequent Eaters just don't know
For the Child-focused - supermarkets are the answer
It's all 'ornate' for the Milkers
Chocophiles know it all - but see the category differently
Number of purchase occasions
Figure 67: Consumer typologies and repertoire purchasing, May 2004

Attitudes and Typologies - Detailed Demographics

Figure 68: Chocolate preferences, by gender, age and socio-economic status, May 2004
Figure 69: Chocolate preferences, by lifestage and Mintel's Special Groups, May 2004
Figure 70: Chocolate preferences, by marital status, working status, presence of children and household size, May 2004
Figure 71: Chocolate preferences, by region and ACORN categories, May 2004
Figure 72: Chocolate preferences, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Figure 73: Popular attitudes towards chocolate, by gender, age and socio-economic status, May 2004
Figure 74: Popular attitudes towards chocolate, by lifestage and Mintel's Special Groups, May 2004
Figure 75: Popular attitudes towards chocolate, by marital status, working status, presence of children and household size, May 2004
Figure 76: Popular attitudes towards chocolate, by region and ACORN categories, May 2004
Figure 77: Popular attitudes towards chocolate, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Purchase repertoires
Figure 78: Repertoire purchasing of luxury chocolates, by lifestage, presence of children and Mintel's Special Groups, May 2004
Figure 79: Repertoire purchasing of luxury chocolates, by region and ACORN categories, May 2004
Figure 80: Repertoire purchasing of luxury chocolates, by media usage, time spent watching commercial TV and supermarkets used, May 2004
Consumer typologies
Figure 81: Consumer typologies, by gender, age and socio-economic group, May 2004
Figure 82: Consumer typologies, by lifestage, Mintel's Special Groups and presence of children, May 2004
Figure 83: Consumer typologies, by region and ACORN categories, May 2004
Figure 84: Consumer typologies, by media usage, time spent watching commercial TV and supermarkets used, May 2004

The Future

Feel the squeeze
Churn and erosion will continue
Brand extension and licences
A new sector needed
Sophisticated tastes - and more discerning
Ethical could capture young adults
Fair trade and organic - have they boxed themselves in?
Wellness
Shopping methods evolve
Cheap fakes - beware
Packaging waste regulations
Buffered from health fads and frenzies
Staying in and smaller households

Forecast

Steady, not spectacular, growth forecast
Figure 85: Forecast of the luxury chocolate market, by value, 2004-09
Annual volume growth to slow slightly
Figure 86: Forecast of the luxury chocolate market, by volume, 2004-09
Brand status needs to be maintained
Input factors

Abstract

Consumer affluence (PDI) has risen consistently since 1999 and this has encouraged spending in all luxury markets. This, combined with consumer demand for increasingly sophisticated taste experiences, has driven trade up into the luxury chocolate market. The British population love chocolate and the market is underpinned by some strong need-states; gifting (for you), self-indulgence (for me) and sharing (for us). The luxury chocolate market is not consumed on a daily basis and is buffered against macro-market media interest surrounding fat, sugar and the 'unhealthy' British diet.


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