Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

Food and Nutrition Consumers are engaging with food and nutrition like never before. Our in-depth analysis examines the most important implications across the industry, providing market intelligence, original thinking and key insights.

Chocolate Certification: A Path to Greater Profit

8/2/2013
Euromonitor International Profile Picture
Euromonitor International Bio
Share:

Chocolate will be the driving force behind confectionery in 2013. Of the 80 markets covered by Euromonitor International’s research, chocolate is set to register the strongest volume and value performance in 36. Sugar confectionery will be the best performing category in eight markets and gum in nine. In the remaining 27 markets, the results will be ‘mixed’. Even in those, chocolate will grow fastest in value terms in more than a third of the total. Testament to the role that value is playing in chocolate is the fact that the category will outperform at global level all other confectionery products between 2013 and 2018.

Global Retail Growth by Confectionery Category 


Global Retail Growth by Confectionery Category

 

Source: Euromonitor International

Growth not only in mature markets

Value growth is being driven by a number of factors, for example health innovation, more visible branding strategies, certification, sophisticated packaging or simply a taste for indulgence. Crucially, these factors are driving demand for chocolate not only in mature markets but also emerging ones.

Health, for instance, is driving added-value strategies in countries with severe obesity and diabetes issues, like Saudi Arabia. Innovation is tapping into this trend. Klingele Chocolade NV, a Dutch manufacturer, introduced its brand Balance in 2012, a chocolate tablet with no added sugar, largely available in supermarkets and hypermarkets. According to the International Diabetes Federation, Saudi Arabia and Egypt have the highest prevalence of diabetes in the Middle East.

The battle for value is also raging in China. Ferrero China, for instance, increased its retail value share by one percentage point in 2012. Ferrero’s products have a premium image, using gold coloured packaging and advertising to convey a high-end lifestyle to consumers. In India, plain tablets are losing share to filled chocolate tablets, which saw a three percentage point value share increase in 2012 following a 45% value sales gain. The rapid growth in filled chocolate tablets is in line with a growing preference for premium chocolate, which is usually filled with nuts.

Natra a best-practice case

The quest for value is particularly apparent in mature markets. Value growth in North America is set to rise by 8% between 2013 and 2018, while volume sales will be stagnant. Even in Western Europe, which is expected to be mired in recession for some years to come, value growth will be incrementally higher than volume growth. A need for differentiation from private label is a recurrent theme in these markets. Natra, a Spanish chocolate and ingredients manufacturer which supplies retailers in Europe and the US, announced in mid-May its commitment to 100% certified cocoa by 2020. Certified chocolate is typically regarded as premium and fetches a higher price than standard chocolate.

Taking a leaf out of UK private label’s book

Private label has been instrumental in the success of fairtrade-certified chocolate in the UK. Retailers like Sainsbury’s and Tesco offer a wide range of these products. They are competitively priced and are often sourced by cocoa origin, a feature which further boosts their premium credentials. Other European retailers are lagging behind and offer, if any, a very limited range of fairtrade-certified chocolate products. If they take a leaf out of the UK’s book, they will significantly increase the growth potential of certified chocolate in their respective markets. In addition, brand manufacturers intent on maintaining differentiation from private label will expand significantly the number of certified lines available. As many of them have an international presence,  certification is set to extend gradually to emerging markets where their global brands have a significant presence. The case for certified brands will become more global than ever.

Take action now, make a profit tomorrow

These projections are not set in stone but are based on consensus. Consensus, however, is based on recent evidence. The evidence for chocolate manufacturers is that consumers across the globe are happy to pay more if they receive added value. The consensus is that this trend will continue over the next five years and so success means taking action now through added-value strategies such as chocolate certification. Failure will be to do nothing.

Interested in more insights? Subscribe to our content

Explore More

Shop Our Reports

Competitor Strategies in Staple Foods

Staple foods players are facing a complex period; sales growth has decelerated as consumers return to busier lifestyles post-pandemic. Value growth was high in…

View Report

Eating at Home: Opportunities in the New Consumer Landscape

The eating-at-home business has surged in the last years, offering more options for consumers. This includes meal delivery, ready meals, home-cooked food, and…

View Report

Personalisation and Digital Wellness in Food and Nutrition

Personalisation’s appeal is intensifying as modern consumers demand greater convenience and efficiency. Increasing awareness of the importance of nutrition for…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More