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Strategy Briefing

Economy, Standard or Premium? What’s Driving Growth in Chocolate Confectionery ?

Sep 2015

US$1,325

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About This Report

New Report Guarantee

If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

At the core of marketing snacks is predicting how consumers will respond to different stimulus. How will endorsement help raise sales? What effect does buying chocolate in a boutique vs supermarket have on quality perception? This briefing pinpoints different price platforms within chocolate confectionery and evaluates performances in terms of brands. This briefing uses unique data generated for Packaged Food and is the first to demonstrate insights using the new Packaged Food Forecast Model.

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Chocolate has greater income elasticity ties with poorer consumers

Income elasticity of chocolate has a strong inverse correlation with income per capita. Value-led growth strategies in chocolate have to be extremely mindful of potential negative income shocks in emerging markets (e.g. Bolivia), as they have a much bigger overall impact on chocolate consumption than in richer countries (e.g. Denmark).

Premiumising chocolate offers a survival strategy for an industry facing increased input costs and volume falls

To offset volume falls in developed markets as well as rising input costs, premiumising chocolate confectionery can help protect margins. However future demand drivers of chocolate confectionery differ substantially by country and therefore suggest varied strategies. Analysis by price platform reveals that premium brands have outperformed the market in the US and the UK.

Having a truly global brand is most beneficiary in markets where soft demand drivers dominate

Euromonitor’s packaged food forecast model shows that in developed markets such as the US, Japan and the UK, chocolate demand will mostly be affected by ‘soft drivers’ such as marketing activity, product innovation and changing consumer tastes/lifestyles. Creating brand loyalty through a global brand is therefore key as consumers in these markets are more susceptible to the marketing environment.

The allure of premium chocolate consists of five key elements

Premium brand perception is influenced by price, packaging, ingredients, provenance, point of purchase and brand experience. For example, a premium perception can be amplified by purchasing chocolate in a boutique (e.g. Lindt) versus a supermarket (e.g. Mars bar). In order to premiumise a chocolate brand, the marketing mix should be adjusted accordingly.

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Introduction

Scope

Objectives of this briefing

Key findings

What Really Drives Chocolate Consumption?

Premiumising chocolate: Offsetting volume falls and input rises

Chocolate has greater income elasticity ties with poorer consumers

How the Packaged Food Forecast Model reads demand drivers

China and Brazil opposing markets for boxed assortments by price

China’s chocolate gifting driven by income, but Brazil by population

Markets driven by “soft drivers” naturally suited to premium chocolate

The chocolate prophecy - fortune telling for growth strategies

How income demand driver can be applied to the wider region

How Soft demand drivers can be applied to the wider region

Economy, Standard or Premium?

Standard chocolate the preferred option but not in China or the US

Premium chocolate brands clearly outperforming standard in China

US: The rise of Lindt as the nation’s favourite premium chocolate

Hershey sets price ceiling for US countlines but Ferrero challenges

Japanese will not spend on tablets but will on bite-sized chocolates

Lower chocolate market consolidation makes Japan favourable

Economy, Standard or Premium??

Opportunity for standard/premium chocolates Japan

US and Japan: Selling standard chocolate through beauty retailers

The growing importance of health and beauty channels in Japan

Defining a Premium Chocolate Brand

What makes chocolate premium?

How global chocolate brands vary by unit price and market

China and India have a different perception of premium to Japan

Turkey - very different perception of premium to the UK and the US

Importance of branded retail varies according to brand objectives

Turkey a nd the UK suggest private label chocolate can be premium

The KitKat Chocolatory: Nestlé’s flagship success story in Japan

Ferrero buys Thorntons: The dangers of overexposing a brand

Lessons in brand premiumisation : Apple gets the taste right

Opportunity lies between premium and super premium chocolate

Recommendations

There is value to be gained at both ends of the price spectrum

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Appendix : Industry Forecast Model

Significance and applications for growth decomposition

Appendix : Industry Forecast Model

Key applications for Industry Forecast Models

Why buy this report?

Want to find out more about this report?

Request more information

Megatrends

Strategy Briefing

Economy, Standard or Premium? What’s Driving Growth in Chocolate Confectionery ?

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Chocolate has greater income elasticity ties with poorer consumers

Premiumising chocolate offers a survival strategy for an industry facing increased input costs and volume falls

Having a truly global brand is most beneficiary in markets where soft demand drivers dominate

The allure of premium chocolate consists of five key elements

Want to find out more about this report?

Table of Contents

Introduction

Scope

Objectives of this briefing

Key findings

What Really Drives Chocolate Consumption?

Premiumising chocolate: Offsetting volume falls and input rises

Chocolate has greater income elasticity ties with poorer consumers

How the Packaged Food Forecast Model reads demand drivers

China and Brazil opposing markets for boxed assortments by price

China’s chocolate gifting driven by income, but Brazil by population

Markets driven by “soft drivers” naturally suited to premium chocolate

The chocolate prophecy - fortune telling for growth strategies

How income demand driver can be applied to the wider region

How Soft demand drivers can be applied to the wider region

Economy, Standard or Premium?

Standard chocolate the preferred option but not in China or the US

Premium chocolate brands clearly outperforming standard in China

US: The rise of Lindt as the nation’s favourite premium chocolate

Hershey sets price ceiling for US countlines but Ferrero challenges

Japanese will not spend on tablets but will on bite-sized chocolates

Lower chocolate market consolidation makes Japan favourable

Economy, Standard or Premium??

Opportunity for standard/premium chocolates Japan

US and Japan: Selling standard chocolate through beauty retailers

The growing importance of health and beauty channels in Japan

Defining a Premium Chocolate Brand

What makes chocolate premium?

How global chocolate brands vary by unit price and market

China and India have a different perception of premium to Japan

Turkey - very different perception of premium to the UK and the US

Importance of branded retail varies according to brand objectives

Turkey a nd the UK suggest private label chocolate can be premium

The KitKat Chocolatory: Nestlé’s flagship success story in Japan

Ferrero buys Thorntons: The dangers of overexposing a brand

Lessons in brand premiumisation : Apple gets the taste right

Opportunity lies between premium and super premium chocolate

Recommendations

There is value to be gained at both ends of the price spectrum

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model

Soft drivers and the Industry Forecast Model

Growth decomposition explained

Appendix : Industry Forecast Model

Significance and applications for growth decomposition

Appendix : Industry Forecast Model

Key applications for Industry Forecast Models

Why buy this report?

Want to find out more about this report?

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