Luxury chocolate to grow developed markets, says analyst
The global chocolate market has been valued at $107bn (€82.9bn) for 2012, up around $6bn on the previous year, according to Euromonitor data.
Western Europe represents the largest market in terms of retail value and Latin America the smallest.
THE GLOBE IN RETAIL VALUE TERMS*
Western Europe | $37.9bn (€29.3bn) |
US | $19.2bn (€14.8bn) |
Eastern Europe | $15.8bn (€12.2bn) |
Asia Pacific | $12.9bn (€10bn) |
Latin America | $11.4bn (€8.8bn) |
*Based on Euromonitor International data estimates for 2012
Driving sales in developed markets
Francisco Redruello, senior foods analyst at Euromonitor International, said the focus for developed markets needs to be on premium, more expensive, luxurious products.
“Manufacturers need to face up to the challenge of quality and step up investment in premium innovation,” Redruello told ConfectioneryNews.com.
Extended flavour offerings, incorporation of multiple cocoa types and increased content along with luxurious packaging innovation must be a focus, he said.
Smaller formats should also be developed as portion control is increasingly important, he added.
“Quality is paramount across the developed chocolate markets. The only exception is the US and Germany to some extent,” Redruello said.
Within the US and Germany there is a stronger focus on price, driven in the US by culture and the economic uncertainty and in Germany by retail pushes.
Asia Pacific and Latin America
Within these regions, opportunities for chocolate firms can be found in Brazil, Columbia, Argentina, China and India, the analyst said.
“In Asia and Latin America, the main difference we are seeing is popularity in mid-priced chocolate confectionery brands,” Redruello said.
Consumers previously only used to buy chocolate on occasions but are now snacking more regularly on it, he added, and there has been a shift from cheap sugar confectionery to mid-priced chocolate products.
“The key challenge in these emerging markets is distribution,” the analyst said.
Efforts must be made to increase shelf-presence in city supermarkets but also to strike distribution agreements with wholesalers to access smaller retailers; an important platform in these markets, he said.
Refrigeration is also a challenge and setting up agreements to fund or subsidize the cost of a fridge in stores could be extremely advantageous for manufacturers, he said, as it ensures good product quality and exclusivity in stores.
