Premium chocolate is rapidly growing in popularity in the emerging Brazilian market, according to domestic trade body ABICAB.
ABICAB (Brazilian Association of Chocolate, Cocoa, Peanut, Candy and Derivatives) recently set up an exclusive board for the premium chocolate segment. It will be led by Caio Tomazeli, who assumes the post of deputy director of premium chocolates.
He said: "With greater purchasing power, consumers are increasingly seeking sophisticated products, either for consumption or as a gift option.”
ABICAB estimates that the premium chocolate niche accounts for 6% of the US $9bn chocolate confectionery market in Brazil.
The domestic premium chocolate sector has grown at a rate of 20% per year to reach 30 metric tons (MT) annually. This means premium accounts for 6% of the 473,00 MT of chocolate produced in the country annually.
Chocolate consumption in Brazil
Brazil is the world’s third largest market for chocolate confectionery in the world. Brazilians average an annual per capita chocolate consumption of 2.5 kg per year.
The rate of consumption is far greater than other emerging markets such as China (1.2 kg) and India (0.7 kg) - however lower than Russia (5.9 kg).
But the dark chocolate sector accounts for a larger share of the overall retail value sales forchocolate in China (34%) than it does in Brazil (6%), according to data from Euromonitor International.
Brazil however, is one of the world’s largest markets for white chocolate in the world. White chocolate makes 15.5% of all Brazilian value chocolate sales.
Nestlé leads the Brazilian chocolate market with a value share of 41.6% through brands such as Garoto, Especialidades and Alpino.
Premium chocolate reduces seasonal reliance
Leatherhead analyst Jonathan Thomas told this site last year that the growth of premium chocolate in Brazil could cut confectioners’ reliance on seasonal sales.
Relying too heavily on key seasonal period such as Christmas has previously cost big companies. Nestlé’s Q3 2012 results for example were harmed when Brazil changed the dates of Christmas confectionery shipments.
Vulnerable to cocoa import reliance
Market research firm Mintel has forecast that value sales of chocolate confectionery in Brazil will reach BRL 7.8bn ($4bn) by 2015, up 24% from 2011.
However, it has warned that the market’s dependence on cocoa imports could stunt growth by leading to chocolate price increases that put off low-income consumers.
During the 2011/12 crop year, Brazil produced 220,000 MT of cocoa domestically, most of which was grinded in the country. However, this fell short of demand and 64,451 MT of cocoa was imported, mainly from the Ivory Coast.