Hot Chocolate and Other Malted Drinks - UK

Published by: Mintel International Group Ltd.

Published: May. 1, 2008 - 111 Pages

Table of Contents

Issues in the Market

Four key issues

Definitions

Abbreviations

Market in Brief

Hot chocolate fuels growth

More consumption opportunities for hot chocolate

Wide-ranging manufacturer activity

Outlook for the future

Internal Market Environment

Key points

Health concerns are growing

Figure 1: Agreement with selected lifestyle statements, 2003-07

Because you’re worth it

Figure 2: Agreement with selected lifestyle statements, 2003-07

Demand for more food with more production values

Figure 3: Agreement with selected lifestyle statements, 2003-07

Fair trade leads growth

Broader Market Environment

Key points

Changing demographic profiles

Figure 4: Effect of the changing make-up in demographics of the UK population on the market for hot chocolate and malted drinks, 2007

Resurgence in home cooking

Figure 5: Agreement with selected lifestyle statements, 2003-07

Food labelling - more of a concern

Competitive Context

Key points

Competing markets

Figure 6: Opportunities and threats in competing markets, 2007

Emotional marketing

Opportunities for hot chocolate/malted drinks

Chocolate confectionery activity

Lessons for hot chocolate/malted drinks players

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Market Value and Forecast

Key points

Volume and value sales

Figure 8: Volume and value sales of hot chcolate and other malted drinks, 2003-07

Mixed fortunes for volume sales

Hot chocolate market underpins value growth

Unit price rises

Hot chocolate - a sweeter option

Figure 9: Sales of hot chocolate and other malted drinks, by value, 2006-07

Malted drinks perceived as old fashioned

The future of the market

Conscience and convenience drive market

Going green and evolving ethical

Forecast

Hot chocolate forging ahead

Malted hot drinks on the edge of a sharp decline

Figure 10: Estimated value of the hot chocolate and malted drinks market, 2008-13

Figure 11: Estimated value and volume sales of hot chocolate, 2008-13

Figure 12: Estimated value and volume sales of other malted hot drinks, 2008-13

Figure 13: Comparison of current value of hot chocolate and malted drinks market, 2003-08 and 2008-13

Figure 14: Comparison of real value of hot chocolate and malted drinks market, 2003-08 and 2008-13

Factors used in the forecast

Segment Performance

Key points

Hot chocolate sales hot up

Figure 15: Volume and value sales of hot chocolate, 2003-07

Indulgence and indignation add value to the market

Indulging an ethical conscience

Figure 16: Value sales of instant and traditional hot chocolate products, 2006-07

Growth in both non flavoured and flavoured

Figure 17: Value sales of flavoured and non-flavoured hot chocolate products, 2006-07

Sachets satisfy convenience cravings

Domestic goddesses favour cocoa powder

Figure 18: Value sales of cocoa /cocoa powder, 2006-07

Ready-to-drink products gush forth

Hot malted drinks

Figure 19: Volume and value sales of other malted drinks, 2003-07

Volume sales suffer

The future in an instant

Figure 20: Value sales of instant and traditional malted drink products, 2006-07

Flavours favour younger consumers

Figure 21: Value for flavoured and non-flavoured malted drink products, 2006-07

Malted drinks sachets show potential

Market Share

Key points

A variety of manufacturers

Figure 22: Brand shares in the hot chocolate drinks market, 2006-07

Cadbury under pressure

Success for chocolate confectionery brand extensions

Organic, fair trade and ethical race ahead

Own label smoothes the way for growth

Less room for growth in malted drinks

Figure 23: Brand shares in the malted drinks market, 2006-07

Malted drinks sleep it off

Companies and Products

Key points

Brand map of manufacturers and brands

Figure 24: Map of manufacturers and brands in the hot chocolate and malted drinks market, 2008

Company profiles

Cadbury Trebor Bassett

GlaxoSmithKline

Associated British Foods (ABF)

Twinings

Options

Ovaltine

Nestlé

Mars Drinks

Aimia Foods

Organic, fair trade and ethical companies

Green & Blacks

Clipper

Cafédirect

Divine

Other

Whittard of Chelsea

Tassimo - Suchard

Charbonnel et Walker

Drink Me Chai

Brand Communication and Promotion

Key points

Adspend increasing

Figure 25: Main monitored media spend on hot chocolate and malted drinks, 2004-07

Strong brand orientation

Figure 26: Main monitored media expenditure on hot chocolate and malted drinks, by top seven brands, 2004-07

Options and Horlicks dominate spend

Confectionery brands - adspend reaps rewards

The seasonal affect

Figure 27: Main monitored advertising spend on key brands, March 2006-February 2008

Channels to Market

Key points

Distribution of hot chocolate and malted drinks

Figure 28: Distribution of sales of hot chcolate and other malted drinks, 2006-07

Multiples strengthen their hold

Convenience sector remains underdeveloped

Mail order and online shopping developing

Future

Consumption - Who, Usage and Frequency

Frequency of usage

Light users dominate

Figure 29: Frequency of consumption of hot milk drinks (including chocolate and cocoa), 2003-07

Figure 30: Frequency of consumption of hot milk drinks (including chocolate and cocoa), 2007

The health and lifestyle of hot milk drink users

Figure 31: Hot milk drink users, by frequency of consumption and agreement with lifestyle statements, 2007

Tapping into opportunities for growth

Drinks by type

Figure 32: Type of Drinking chocolate or other malted chocolate drinks drunk or served in the last 12 months, March 2008

Hot chocolate favoured over malted drinks

Figure 33: Key demographic breakdown and motivating behaviour

Appealing to younger consumers

Potential for development and growth

Children and young adults drinking habits

Figure 34: Drinks drunk by 11-25-year-olds once a week, March 2008

Sit down and a cup of tea

Keeping men engaged as they age

Usage Occasions

Figure 35: Usage occasions for drinking chocolate or other malted chocolate drinks drunk or served in the last 12 months, March 2008

And so to bed

An indulgent digestif

Home not away

Appendix - Internal Market Environment

Figure 38: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 39: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 40: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 41: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 42: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 43: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 44: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Figure 45: Agreement with the statement ‘I like to try out new food products’, by demographic sub-group, 2007

Appendix - Broader Market Environment

Figure 46: Changes in UK population, by socio-economic status, 2003-13

Figure 47: Changes in UK population, by age, 2003-13

Figure 48: Changes in UK population, by household size, 2003-13

Figure 49: Agreement with selected lifestyle statements, by demographic sub-group, 2007

Appendix - Market Value and Forecast

Figure 50: Sales of hot chocolate and other malted drinking products, by volume, 2006-07

Appendix - Consumption - Who, Usage and Frequency

Frequency of purchase

Figure 51: Usage and frequency of consumption of milk drinks (including chocolate and cocoa), 2008

Drinks by type

Figure 52: Drinking chocolate or other malted chocolate drinks drunk or served in the last 12 months, March 2008

Figure 53: Drinking chocolate or other malted chocolate drinks drunk or served in the last 12 months, March 2008

Children’s and Young Adults drinking habits

Figure 54: Drinks drunk by 11-25-year-olds once a week, March 2008

Figure 55: Drinks drunk by 11-25-year-olds once a week, March 2008

Figure 56: Drinks drunk by 11-25-year-olds once a week, March 2008

Appendix - Usage Occasions

Figure 57: Usage occasions for drinking chocolate or other malted chocolate drinks drunk or served in the last 12 months, March 2008

Abstract

Valued at £124 million in 2007, the hot chocolate and malted drinks market is a tale of two sectors. The malted drinks market has suffered due to its staid, old-fashioned image. However, the trend towards premiumisation in the hot chocolate market, supported by new product development, is the driving force behind value growth.

The future for the market looks strong, if manufacturers keep developing products that offer a clear market-differentiating benefit, ie healthy, convenient or have a production value.

Key themes of the report:

• The influence of health and indulgence
• Growing demand for organic and fair-trade products
• Diversifying consumption occasions.
• Convenience based NPD - pods and ready to drink.

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