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Challenging time for chocolate confectionery

Whilst the sector for unfilled chocolate will remain relatively flat there is only modest growth forecast for filled tablets and countlines, pralines and other chocolate confectionery (including seasonal items). However, in order to take a share of this growth it is necessary for manufacturers to pick out the key markets on an international basis and to target products and distribution accordingly.  

 

Brand dominated market faces a future of change

Main conclusions are:

• The chocolate confectionery market in Europe is highly competitive and requires innovation in order to achieve any further significant growth and development.

• Manufacturers will have to work much harder simply to maintain market shares. With retailer own brands likely to take an increasing share there will be even less room for branded products to develop.

• What was traditionally a highly brand-dominated market faces a future of change. Not only will retailer own brands take an increasing slice of the market, but it is also opening up to smaller operators offering super-premium chocolates and specialities.

• The data shows that the EU market for chocolate confectionery is reaching a point of saturation with most growth coming from within the market rather than from overall expansion.

• Total expansion of the market does seem to be limited. Not only is European total population growth forecast to be low, but competition from other types of snacks and indulgences promises to reduce the potential for chocolate sales.

 

Future trends in chocolate confectionery

In terms of future opportunities the following key trends have been identified:

•    wider use of natural flavours and fruits / superfoods

•    exploitation of health properties

•    more substantial products for snacking

•    product differentiation through shapes, ingredients, visual appearances and packaging

•    increasing use of characterisations

•    new forms of packaging and presentation for gifts, multipacks, and snacks

•    increased development of value-added and seasonal products;

•    increased diversification of brands

•    growth in organic and Fair Trade alternatives

•    low calorie / diebetic / low /no sugar products

•    increases in trans-national distribution, advertising and sponsorship

•    more mergers/demergers and acquisitions

•    further development of the super-premium sector

Opportunities exist in this increasingly competitive market but they are becoming more fragmented and difficult to find.

Market data

The major challenge for chocolate confectionery is that market growth has been very low, at around 0.5% per year in volume. Although values have done slightly better at an annual average of 1.5% consumption in some sectors has even declined over the past five years.

Total per person consumption of chocolate confectionery grew by only 0.3% per year between 2002 and 2007 disguising much difference in performance between countries and between sectors.

By country, the largest markets by volume are:

Germany : 747,000 tonnes

UK : 594,000 tonnes

France : 304,000 tonnes

Italy : 212,000 tonnes

In terms of value, however, the UK is the largest market, followed by Germany, France and Italy. UK chocolate confectionery is one of the most costly in Europe and is becoming increasingly so with growth in the premium, high cocoa solids sector.

Western Europe: Consumer expenditure on

chocolate confectionery by country, 2007

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