Chocolate makers cashing in on love?

Related tags Chocolate Valentine's day Datamonitor

Chocolate manufacturers have cashed in on love, with a box of chocs
the time-honoured way of celebrating Valentine's Day.

Valentine's Day is traditionally a day of love and romance, but it is also one of the prime times of the year (along with Easter and Christmas) for chocolate sales. So are manufacturers cynically cashing in on love? A new report from market analysts Datamonitor suggests that the answer is yes.

Boxed chocolates have always been popular, but novelty chocolates such as body paint or chocolate greeting cards are becoming increasingly popular, especially for special occasions such as Valentine's Day, due to their improved quality, Datamonitor claims.

But novelty products do not have to play a major role in a market for confectionery sales as a whole take off. Datamonitor highlights the case of the Russian market, where boxed chocolate sales reached 303 million kg in 2001, more than any other country in the world and twice the volume of the US, which consumed 151 million kg of boxed chocolates in the same year.

This figure is all the more impressive given that Russians do not really celebrate Valentine's Day, although the day is becoming more widely known there. Instead, Russians celebrate Women's Day on March 8, when all Russian women are given presents, flowers, chocolates and cards, but novelty chocolates have never really played a major role in this event, not least because the Russian confectionery market as a whole is relatively unsophisticated and not yet sufficiently 'westernised'.

In 2001, the novelty chocolate sector in Russia generated a value of just $1.7 million, compared to the $1.4 billion that the leading boxed chocolate sector produced with its share of over 90 per cent of the total Russian confectionery market, according to Datamonitor.

In Brazil, the second largest boxed chocolate market after Russia, consumers celebrate lovers' day on 12 June rather than 14 February, but chocolates still feature heavily in the celebrations, despite the fact that chocolate does not always go down well in warmer climes. In 2001, boxed chocolates made up over 50 per cent of Brazil's chocolate confectionery sales by volume with a total of 168 million kg, Datamonitor shows. Unlike Russia, the Brazilian market is sophisticated, with high quality, high priced items performing well there.

But it is the US which munches its way through the most chocolate confectionery of all each year - boxed, novelty or otherwise - according to Datamonitor. With total sales there reaching $13 billion in 2001, the boxed chocolate sector alone was worth $2.4 billion, while novelty chocolates chalked up $1.6 billion in sales. But despite this massive sales figure, there is still room for growth in the US, the report claims, with boxed chocolate sales set to reach $2.7 billion by 2007, a compound annual growth rate of 2 per cent.

Much of this growth will come from price increases as much as volume rises, but even in the US, prices are not set to rise as much as they have in the UK, where the whole market has grown despite flat volume sales. In the UK, per capita expenditure on boxed chocolates reached $22.2 in 2001- two and a half times more than the average American consumer spends. In fact, the UK consumer spends more on boxed chocolates than anyone else in the world, according to Datamonitor, and all because the price per unit is so high.

The UK in fact has the highest consumption of chocolate in Europe, taking 30 per cent of the total in 2001, and even the novelty sector, the smallest in the UK chocolate confectionery market, shows higher expenditure and consumption rates than anywhere else in the world.

As far as Valentine's Day in the UK is concerned, boxed chocolates are still the favourite way for many people to say 'I love you', according to Datamonitor, but there have been numerous developments within that sector. Gourmet varieties and speciality dark chocolates, as well as niche products such as organic, diet and diabetic chocolates, are among the most popular items this year, according to the report.

"Novelties are produced for Easter and Christmas as well as Valentine's Day, and as such, sales in this sector fluctuate widely depending on the time of year"​ commented Joanne Birtwistle, Datamonitor consumer analyst. "The growing novelty chocolate sector is a bit more 'now' and it will provide the boxed chocolate market with its greatest competition. Chocolate body paint and edible undies aren't the only way to go. The novelty sector is also becoming increasingly gourmet in its offerings, so those looking to melt her heart and save money this year could do worse than buying a luxury chocolate Valentine's card."

The important thing is just to make sure it doesn't melt in the post…

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