Chocolate Confectionery - US

Published by: Mintel International Group Ltd.

Published: Jul. 1, 2008 - 105 Pages

Table of Contents

Scope and Themes

What you need to know

Definition

Data sources and methodology

Sales data

Consumer survey data

Abbreviations

Terms

Executive Summary

Total sales holding at about $16.3 billion

The competitive landscape is challenging

Box/bag/bar more than 3.5oz is the biggest segment, with a 40% share

The majority of chocolate sales take place outside FDMx channels

But interest in premium chocolate may be waning

Medical news is good and bad

Increasing commodity prices affect industry

The Hershey Co. is the market leader…for now

Innovations from many countries

Advertising constrained by childhood obesity concerns

More than three quarters of adults buy chocolate

Chocolate cravings are strong for more than two thirds of purchases

Premium and organic

Types of chocolate purchased

Preferred brands

Spouses and kids most likely to receive chocolate

Market Size and Forecast

Key points

Chocolate sales continue to grow, but more slowly

Chocolate sales and forecast

Figure 2: Total U.S. sales and forecast of chocolate confectionery, at current prices, 2002-12

Figure 3: Total U.S. sales and forecast of chocolate confectionery, at inflation-adjusted prices, 2002-12

Wal-Mart sales

Competitive Context

Key points

Chocolate is a popular sweet

Figure 4: Foods chosen to satisfy craving for sweets, April 2008

Seasonal chocolate and non-chocolate confectionery

Figure 5: Seasonal sales of chocolate and non-chocolate confectionery (FDMx), by holiday, 2005 and 2007

Segment Performance

Key points

Box/bag/bar more than 3.5oz is best-performing segment

Smaller segments see declining sales

FDMx is only part of the story

Figure 6: U.S. sales of chocolate confectionery, by segment (FDMx), 2005 and 2007

Figure 7: U.S. sales and forecast of chocolate confectionery, at current prices, top five segments (FDMx), 2002-12

Segment Performance—Bar/Bag/Box more than 3.5oz

Key points

Premium products challenge mainstream players

Figure 8: U.S. sales and forecast of chocolate confectionery bar/bag/box less than 3.5oz, at current prices (FDMx), 2002-12

Segment Performance—Seasonal Chocolate Confectionery

Key points

Seasonal chocolate sales depend on the calendar

Figure 9: U.S. sales and forecast of seasonal chocolate confectionery, at current prices (FDMx), 2002-12

Easter is top chocolate holiday

Figure 10: Sales of chocolate, by holiday (FDMx), 2005 and 2007

Segment Performance—Bar/Bag/Box less than 3.5oz

Key points

Impulse sales strong, as is competition

Figure 11: U.S. sales and forecast of chocolate bar/bag/box less than 3.5oz, at current prices (FDMx), 2002-12

Segment Performance—Snack-size Chocolate

Key points

Majority of snack-size products appeal to kids and teens

Figure 12: U.S. sales and forecast of snack-size chocolate, at current prices (FDMx), 2002-12

Segment Performance—Gift Box Chocolate

Key points

Gift boxes lose ground in FDMx channels

Figure 13: U.S. sales and forecast of gift box chocolate, at current prices (FDMx), 2002-12

Segment Performance—Sugar-free Chocolate

Key points

Sugar-free chocolate was popular during the low carb fad

Figure 14: U.S. sales and forecast of sugar-free chocolate, at current prices (FDMx), 2002-12

Retail Channels

Key points

The majority of chocolate purchases are outside traditional channels

Multiple tiers of chocolate

Figure 15: Total U.S. sales of chocolate confectionery, by retail channel, 2005 and 2007

Retail Channels—Supermarkets

Stiff competition requires imaginative merchandising

Figure 16: U.S. sales of chocolate confectionery at food stores, at current prices, 2002-07

Market Drivers

Interest in premium remains strong but it may be fading

Medical news: Good and bad

Good news on chocolate

Bad news on health

Commodity prices are taking a toll

Is confectionery “recession proof”?

Leading Companies

Key points

The candy world is in a state of flux

Mergers, acquisitions, and questions

Figure 17: Sales of leading chocolate manufacturers, FDMx sales, 2007 and 2008

Brand Share—Box/Bar/Bag >3/5 oz.

Key points

Hershey leads, but doesn’t gain

Figure 18: Company and brand sales of chocolate bar/bag/box more than 3.5oz, FDMx, 2007 and 2008

Brand Share—Seasonal Chocolate

Key points

Holiday candy sales dependent on the calendar

Figure 19: Company and brand sales of seasonal chocolate, FDMx, 2007 and 2008

Brand Share—Box/Bar/Bag <3/5 oz.

Key points

Hershey leads the segment, but has made insubstantial gains

Nestlé sales decline

Figure 20: Company and brand sales of chocolate box/bar/bag less than 3.5oz, FDMx, 2007 and 2008

Brand Share—Snack-size Chocolate

Key points

Sales decline in segment aimed primarily at kids

Figure 21: Company and brand sales of snack-size chocolate, FDMx, 2007 and 2008

Brand Share—Gift Box Chocolate

Key points

FDMx gift box sales do not include seasonal products

Russell Stover leads, but only Ferrero sees increases

Figure 22: Company and brand sales of gift box chocolate, FDMx, 2007 and 2008

Brand Share—Sugar-free Chocolate

Key points

After low carb, sales decline

Figure 23: Company and brand sales of sugar-free chocolate, FDMx, 2007 and 2008

Brand Qualities

Key points

Finding new seasons for seasonal chocolate

Figure 24: Gifting of chocolate, by holiday and recipient, May 2008

Even more imaginative seasons and holidays

Innovation and Innovators

Key point

International new product launches on the rise

Figure 25: International new product launches, chocolate confectionery, 2002-08

Top North American trends

International trends

Organic and natural

Seasonal chocolate is a guaranteed winner

Ethical and fair trade

Premium launches decline: is the market saturated?

More healthful chocolate?

Children’s new product launches limited

Chocolate just for women and just for men

Vintage and retro packaging tap into nostalgia trend

Chocolate as medicine

GNPD’s forecast for new launches

Advertising and Promotion

Overview

Diet chocolate?

Figure 26: 3 Musketeers television ad, 2007

Seasonal advertising

Figure 27: Hershey’s Kisses television ad, 2007

Figure 28: Hershey’s Reese’s television ad, 2007

Figure 29: M&Ms television ad, 2007

Figure 30: Russell Stover television ad, 2007

Figure 31: Whitman’s Sampler television ad, 2007

Personalized chocolate

Figure 32: Hershey’s M&Ms television ad, 2007

Figure 33: Hershey’s Kisses television ad, 2007

Who Buys Chocolate and for Whom?

Key point

Figure 34: Purchase incidence of chocolate candy, by gender, age, household income, race/ethnicity and presence of children, April 2008

Craving Chocolate

Key points

Figure 35: Reasons for purchasing chocolate for personal consumption, by age, May 2008

Premium and Organic Chocolate

Key points

Figure 36: Opinions regarding premium chocolate, by household income, May 2008

Types of Chocolate Purchased

Key points

Figure 37: Types of chocolate purchased for personal consumption, by age, May 2008

Figure 38: Types of chocolate purchased for personal consumption, by household income, May 2008

Brands

Key points

Adults’ preferences are more limited

Figure 39: Brands of chocolate candy preferred by adults, January 2007-November 2007

Teenagers more likely to choose a wide array of candy

Figure 40: Brands of non-chocolate candy preferred by teenagers, January 2007-November 2007

Kids’ brand choices more limited than those of teens

Figure 41: Children’s chocolate preferences, January 2007-November 2007

Purchases for Others

Key point

Figure 42: Chocolate purchased for others, by gender, May 2008

Figure 43: Chocolate purchased for others, by age, May 2008

Figure 44: Chocolate purchased for others, by household income, May 2008

Chocolate for Spouses/Significant Others

Key points

Figure 45: Reasons for giving chocolate to spouse/signficant other, by household income, May 2008

Which holidays?

Figure 46: Holidays for giving chocolate to spouses/significant others, May 2008

Chocolate for Children

Key points

Figure 47: Reasons for buying chocolate for children, May 2008

Which holidays?

Figure 48: Holidays for giving chocolate to children, May 2008

Chocolate for Family Members

Key points

Figure 49: Reasons for giving chocolate to family members, May 2008

Which holidays?

Figure 50: Holidays for which chocolate is given to family members, May 2008

Chocolate for Friends

Key points

Figure 51: Reasons for giving chocolate to friends, May 2008

Which holidays?

Figure 52: Holidays for which chocolate is given to friends, May 2008

Chocolate for Co-workers

Key points

Figure 53: Reasons for giving gifts to co-workers, May 2008

Which holidays?

Figure 54: Holidays for which chocolate is given to co-workers, May 2008

Key Purchase Measures

Consumer insights—seasonal chocolate candy

Figure 71: Key purchase measures for seasonal chocolate candy, by household penetration, 2007*

Valentine’s Day chocolate candy

Brand leaders by penetration

Figure 72: Key purchase measures for the top Valentine’s Day chocolate candy brands, by household penetration, 2007*

Easter chocolate candy

Brand leaders by penetration

Figure 73: Key purchase measures for the top Easter chocolate candy brands, by household penetration, 2007*

Halloween chocolate candy

Brand leaders by penetration

Figure 74: Key purrchase measures for the top Halloween chocolate candy brands, by household penetration, 2007*

Christmas chocolate candy

Brand leaders by penetration

Figure 75: Key purchase measures for the top Christmas chocolate candy brands, by household penetration 2007*

Appendix: Other Useful Consumer Tables

Figure 76: Reasons for buying chocolate for personal consumption in past year, by gender, May 2008

Figure 77: Reasons for buying chocolate for personal consumption in past year, by income, May 2008

Figure 78: Reasons for purchasing chocolate for personal consumption, by race/ethnicity, May 2008

Figure 79: Types of chocolate purchased, by race/ethnicity, May 2008

Appendix: Trade Associations

Abstract

The chocolate confectionery industry is slow growing, driven primarily by the popularity of premium chocolate. This report looks at issues facing the industry, including:

• The overall flattening sales rates and the sinking fortunes of snack-sized and sugar-free segments
• The dynamics of chocolate retailing and the strength of non-traditional channels
• The declining share of sales through supermarkets, and what can be done to shore up that channel
• Potential new products and how they could attract new user groups
• What consumers eat when they crave something sweet-and how manufacturers of chocolate can move into other industries
• Counterintuitive chocolate products: natural, organic, and functional. Savory chocolates-with herbal or spicy flavor notes-are a niche market, but adults may consider them worth a try
• Who eats candy-beyond kids and teens-and how chocolate gift giving varies by holiday

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