Global Confectionery Market: Chocolate Brands

Part
01
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Part
01

Insights and Trends - Wellness in Chocolate

Three wellness trends in the global chocolate market are the growing popularity of dark chocolate, vegan chocolate, and organic chocolate.

Global Chocolate Market Wellness Trends

  • According to a 2019 report about the global chocolate market published by Business Wire, "[w]hen it comes to cocoa and chocolate, health-conscious consumer choices typically manifest themselves in the elimination of some ingredients and the addition of others."
  • Accordingly, the three global chocolate trends below pertain to ingredients.
  • Furthermore, all three wellness trends below pertaining to the global chocolate market also center around the idea of "clean label products," which are being embraced by consumers.

1. Dark Chocolate Wellness Trend

  • Dark chocolate is becoming an increasingly popular preference among consumers.
  • The increasing demand for dark chocolate is bolstering the growth of the entire global chocolate market.
  • Two factors contributing to the growing popularity of dark chocolate are the health benefits that people associate with it and the lower quantity of sugar it includes.
  • Consumers are becoming ever-more aware about dark chocolate's health benefits and thus seeking out such products.
  • The reason that there's less sugar in dark chocolate, compared to other types of chocolate, is because it's made with a greater percentage of cacao.
  • Dark chocolate is a wellness trend in the global chocolate market because it was expressly described as such by at least three reputable sources (Baking Business, Absolute Reports, and Technavio) and (2) it is becoming increasingly popular in the global chocolate industry.
  • Companies that are leaning into the global dark chocolate wellness trend include Raw Halo and Keep It Raw.

2. Vegan Chocolate Wellness Trend

  • The title of an article summarized the vegan chocolate wellness trend effectively in stating "Global Vegan Chocolate Market Set for Dramatic Growth."
  • Though cacao is vegan because it's a bean, the processing of it (in making chocolate) is what makes a lot of chocolates non-vegan through the incorporation of additives such as milk.
  • One way that vegan chocolate is being produced is through substituting regular milk with plant-based milk, such as rice milk or almond milk.
  • A factor that's bolstering the growth of the global vegan chocolate wellness trend is that many consumers think vegan foods are healthier than foods made from animal products.
  • Vegan chocolate is a wellness trend in the global chocolate market because (1) it was expressly described as such by at least two reputable sources (Technavio and The Spruce Eats) and (2) it is becoming increasingly popular in the global chocolate industry.
  • Companies that are leaning into the global vegan chocolate wellness trend include Terra Nostra Rice Milk Vegan Choco Bars, Dagoba, and Conscious Chocolate.

3. Organic Chocolate Wellness Trend

  • Globally, there is an increasing demand for organic chocolate, which is bolstering the growth of the entire chocolate market worldwide.
  • The organic chocolate wellness trend has pervaded the global chocolate market.
  • According to the prominent, global chocolate manufacturer, Barry Callebaut, "[m]ore and more organic [chocolate] offerings are popping up on shelves of established, iconic brands as well as boutiques and independent producers. Retailers are increasingly recognizing the potential of this label."
  • As proof of consumers' desire for organic chocolate, a 30% premium is usually charged (on average) for organic chocolate compared to non-organic chocolate, due in significant part to the quality perception of organic chocolate.
  • Organic chocolate is a wellness trend in the global chocolate market because (1) it was expressly described as such by at least two reputable sources (Barry Callebaut and Technavio) and (2) it is becoming increasingly popular in the global chocolate industry.
  • Companies that are leaning into the global organic chocolate wellness trend include Cargill, Theo, Fjak, and Pana Chocolate.
  • Cargill's focus on organic chocolate derived, in part, from its focus on producing clean label chocolate products.
  • With regard to Theo, the company "was the first U.S. chocolate maker to be fair trade and organic and continues to have one of the most ethical and transparent ‘bean to bar’ processes."

Research Strategy

We identified the aforementioned three wellness trends in the global chocolate market by consulting market research reports and articles/information published by chocolate/health/food industry sources. Examples of sources we consulted in compiling the requested information included PR Newswire, NBC, and Healthy Eater, among others. As is noted above, we ensured that all three of the trends above are indeed trends because (1) each was expressly described as such by two or more reputable sources and (2) each is becoming increasingly popular in the global chocolate industry. Lastly, our research findings pertain to the global chocolate market, as was requested.
Part
02
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Part
02

Insights and Trends - Eco-Friendly in Chocolate

Some eco-friendly trends in the global chocolate market include eco-friendly advertising/green marketing, renewable and alternative energy, and minimalism. Hershey, Mars, Divine Chocolate, Nestle, and Aelan Chocolate are some chocolate brands at the forefront of the identified trends.

ECO-FRIENDLY ADVERTISING/GREEN MARKETING

  • Chocolate brands have resorted to green marketing as a tactic to build their reputation and position themselves as sustainable brands and also attract the growing number of eco-friendly consumers.
  • Green marketing is a trend that is currently in the spotlight of the media. Various experts such as Susan Smith (of the National Confectioners’ Association), have been involved in the discussion, citing the trend’s contribution to efforts towards sustainable consumption.
  • The Hershey Company is one of the chocolate brands at the forefront of green marketing. In 2018, the company announced that green marketing would be part of its branding.
  • Specifically, Hershey pledged commitment to ethical sourcing (from child-labor free zones), and the use of verified and certified cocoa in line with the internationally recognized standards for labor, environmental, and better farming practices.
  • Mars is the other chocolate brand that has made green marketing a part of its overall strategy to encourage eco-friendly practices in chocolate production.
  • The company has promised to use 100% certified cocoa by 2020. On its website, it states that it was the first global chocolate brand to make that commitment.

RENEWABLE AND ALTERNATIVE ENERGY.

  • Across various industries, renewable and alternative energy is a major eco-friendly trend that is aimed at encouraging the use of energy sources that have not undesired consequences on the environment.
  • Currently, the discussion on climate change is in many media channels and features a lot of enthusiasts’ and environmental activists stressing the need to adopt practices aimed at mitigating the effects of climate change and reduce global warming.
  • Renewable and alternative energy is one of the proposed practices that experts believe have the potential to contribute to the efforts towards addressing climate change. As such, recent years have seen increased adoption and discussion around the subject, and many brands coming forward to declare their plans to turn to renewable energy sources.
  • In the chocolate production industry, brands such as Mars have made known their plan to implement the trend as an obligation to be part of the solution. Through its “Sustainable in a Generation,” the company commits to the procurement of 100 percent renewable energy.
  • Recently, “Mars Australia signed 20-year power purchase agreements (PPAs) to generate the equivalent of 100 percent of its electricity from renewable energy by 2020.”
  • As well, Nestle has demonstrated commitment towards adopting energy renewable and alternative energy sources such as solar energy, hydro power, anaerobic digester, biomass, and green transport.

3 –MINIMALISM

  • It means turning shifting from overt consumerism towards a simpler and more environmentally friendly lifestyle. The trend discourages over consumption by encouraging buying less and less waste.
  • Environmental activists discourage consumption practices that cause increased pollution of the environment, especially from the plastics used. In the recent past and modern times, such enthusiasts have created campaigns to discourage excess consumption. It is a trend because it is currently being discussed in the media and by experts in the field.
  • In 2018, the one chocolate at a time’’ campaign hit the headlines to encourage sustainable shopping in the industry.
  • One brand that is at the forefront of this trend is Divine Chocolate. It has ensured practices that are in line with the ‘one chocolate bar at a time’’. It discourages over consumption that can result in packaging-related pollution.
  • Hershey and Aelan Chocolate are also part of the campaign geared towards minimalism and anti-Consumerism.
  • Associations like Rainforest Alliance are in support of anti-consumerism to help reduce the amount of waste generated from over-consumption of chocolate.

RESEARCH STRATEGY

To identify the eco-friendly trends in the chocolate market, we made use of industry publications such as the Global Landscapes Forum and The Conversation, authored by experts in the field. We were keen to pick on the trends cross-referenced by multiple sources, fronted by experts and those that many brands in the industry are implementing.
Part
03
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Part
03

Chocolate Industry - Acquisitions

Several acquisitions in the chocolate industry which were announced in the past 24 months are Bissinger's Handcrafted Chocolatier & Chocolate Chocolate Chocolate, Blommer Chocolate & Fuji Oil Holding and Nestle & Ferrero.

Bissinger's Handcrafted Chocolatier & Chocolate Chocolate Chocolate

  • On July 22, 2019, St. Louis-based chocolate company, Chocolate Chocolate Chocolate, announced its acquisition of rival St. Louis-based chocolatier, Bissinger's Handcrafted Chocolatier, for an undisclosed amount.
  • A review of media coverage of the deal, including articles by Radio.com, the St. Louis Post-Dispatch and the St. Louis Business Journal, indicates that sentiment surrounding the transaction was largely neutral, with the majority of news outlets reporting the facts surrounding the transaction without a positive or negative opinion related to the merger.

Blommer Chocolate & Fuji Oil Holding

  • On November 19, 2019, Japanese industrial chocolate and ingredient company, Fuji Oil Holding, announced its acquisition of Chicago-based chocolate company, Blommer Chocolate, for $750 million.
  • Notably, a review of media coverage of the transaction, including articles by the Chicago Tribune, Crain's Chicago Business and Curbed Chicago, suggests a neutral to slightly negative sentiment surrounding the deal, particularly related to concerns that Fuji Oil Holding might close some of Blommer Chocolate's local chocolate manufacturing facilities.

Nestle & Ferrero

Part
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Part
04

Chocolate Industry - Innovative Products: Development

In the global chocolate industry, companies are always trying to come up with new and innovative products for consumers. A lot of companies are centering their chocolate products around health or helping others/countries in need. Four examples of newly developed chocolate products that were all launched in the last 24-48 months or are currently being developed and that stood out are: The Other Bar, Norti Chocolate, The ZEKE Bar and KitKat.


The Other Bar

  • The Other Bar is a chocolate bar developed by both The United Nations Development Programme and the FairChain Foundation.
  • The two came together to develop this chocolate bar in an effort to help eliminate poverty for cocoa farmers. Cocoa farmers on average receive only about 3% of the value of cocoa they produce and sell. However, with this program, farmers are guaranteed 6-7%.
  • Each chocolate bar contains a token (QR scanner code) that the consumer is meant to scan. Every four tokens that are scanned it helps a farmer buy a cocoa tree.


Norti Chocolate

  • The company behind Norti Chocolate is Australian based, Norti Nutrition. They have recently launched Norti Chocolate into the U.S. markets.
  • Norti Chocolate is chocolate with a healthy spin-containing natural and beneficial ingredients while still tasting just as delicious as any other regular chocolate bar. The chocolate consists of three different bars including Norti Performance Bar, Norti Low Carb Bar and Norti Monster Bites.
  • Norti Chocolate has "All of the good stuff, none of the bad stuff". Norti Chocolate does not contain any added sugar, gluten, or dairy. The chocolate is also packed with hemp for protein and enzymes, as well as probiotics to help support overall digestion and gut health.


The ZEKE Bar

  • This limited edition chocolate bar was recently launched by Askinosie Chocolate. The bar was created in partnership with Zeke Emanuel, a health care policy expert.
  • This chocolate is gluten-free, vegan and certified kosher. Organic cane sugar and organic Criollo beans are the only two ingredients. Even with just two ingredients the chocolate is made in a 70 step process.
  • Askinoise has developed multiple programs in efforts to work with and support the farmers and families in the origin communities of the cocoa they use. One example is a program called "A Product of Change" which focuses on helping the communities struggling with malnourishment in an effort to help feed hungry children. A school lunch is donated to students in these starving communities every time one of their chocolate products is purchased.


KitKat

  • KitKat is a popular chocolate product by Nestle. Nestle is in the processing a releasing a new kind of chocolate KitKat which will be on sale late 2019 in Japan, and then in 2020 will be expanding globally.
  • This new chocolate bar will have no added or processed sugar and will be made using all parts of a cocoa fruit. The cocoa bean pulp is typically not used when chocolate is made, but Nestles' new bar isn't going to have any part go to waste. Their purpose of the redesigned KitKit is to follow the trends revolving around health and sustainability.






Part
05
of six
Part
05

Consumer Buying Habits - Chocolate

Introduction

Consumers worldwide manifest different habits and preferences when it comes to purchasing chocolate. Listed below are 6 insights on the topic.

Consumers Habits in Purchasing Chocolate

  • According to an industry analysis by Franchise Help, chocolate consumers are often "price insensitive" and are willing to pay for what they consider to be an "affordable luxury."
  • Festive and holiday seasons are a significant motivator for Americans to buy chocolate. Annually, more than 21% of chocolate sales in the United States have holiday packaging with colors and flavors that are relevant to a particular season or celebration. Worldwide, almost $400 million worth of chocolate is purchased on Valentine's Day, taking up 5% of total industry sales.
  • Significant drivers for consumers in India, China, and the Asian Pacific to buy chocolate are increasing net incomes and the accustomation to western habits.
  • In China, people have a preference for expensive, high-quality European chocolates. Such products represent luxury and are often gifted between business partners to build amicable relationships. Notably, gold foil-wrapped Ferero Rocher chocolates are especially attractive to Chinese customers, who admire the product's taste and craftsmanship.
  • Millennials follow the current health trends and look for chocolate labeled with "specific production and ingredient claims" such as organic or less sugar.
  • More people are purchasing organic cocoa products due to their concerns about food safety and the environment. In 2017, organic dark chocolate comprised the largest share in the global market for organic chocolate. This growing preference in consumers is due to the food's many health benefits including the ability to lower blood pressure and protect the skin from sun damage.
Part
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of six
Part
06

Economic Outlook - Chocolate: Global

The global economic outlook/sales for chocolate is projected to steadily grow over the years ahead, as is demonstrated by the market's projected revenue, per-person revenue, per-unit price, and production volume. Predicted growth trends for the global chocolate market involve ruby chocolate, impulse chocolate purchases, and demand for specialty/premium chocolate.

Global Economic Outlook/Sales for Chocolate

  • The global chocolate market is expected to grow in the coming years.
  • The compound annual growth rate for the global chocolate market between 2018-2024 is forecasted at approximately 7%.
  • Between 2019 and 2023, the global chocolate market is projected to grow by more than $37 billion.
  • For reference, the global chocolate market in 2017 had a value of approximately $103.28 billion.
  • The outlook for revenue per person for chocolate is projected to rise incrementally each year between 2019 and 2023. In 2019, the revenue per person from chocolate was $16.10 and by 2023 is projected to reach $17.71. For the interim years (2020-2022), those values are forecasted at $16.62, $17.14, and $17.40, respectively.
  • The per-unit price for chocolate is projected to increase each year between 2019 and 2023. In 2019, the average per-unit price for chocolate was $11.38 and is expected to reach $12.24 by 2023. In the interim years (2020-2022), the per-unit prices are forecasted at $11.67, $11.97, and $12.08, respectively.
  • The projected growth for the global chocolate market is connected to the projected increase in the volume of chocolate produced worldwide. In 2019, the net volume of chocolate produced totaled 10,423.8 metre-kilograms (mkg). By 2023, that volume is expected to rise to 11,082.8 mkg. For the interim years (2020-2022), those volumes are projected to be 10,601.06, 10,766.88, and 10,924.44 mkg, respectively.

Predicted Growth Trends

1. Ruby Chocolate

  • A predicted growth trend within the global chocolate market involves ruby chocolate, which is predicted to continue taking the chocolate market by storm.
  • According to the National Confectioners Association's CEO/President, ruby chocolate is "one of the biggest breakthrough inventions in the chocolate category in more than 150 years."
  • Though ruby chocolate has already debuted in the market, we included it as a predicted growth trend because research from Mintel (cited by global chocolate manufacturer Barry Callebaut) said that "ruby chocolate has the potential to become more popular than white chocolate, commanding about 10% of the global market." That statement addresses the future growth potential for ruby chocolate.
  • As an example of the predicted future growth of ruby chocolate, a survey of consumers in Japan found that only 40% of people knew about ruby chocolate and far fewer (5%) had tried it. Yet, 80% of those surveyed said "they are interested in trying it in the future." While that survey was specific to Japan, it shows the potential growth for ruby chocolate, which is why we included that data.
  • This projected trend has been noted by at least two reputable sources, including Bake Magazine and Valley News.

2. Impulse Chocolate Purchase

3. Specialty/Premium Chocolate

  • According to an October 2019 report published by Fortune Business Insights, "there is a strong indication of rapid expansion in demand for premium or specialty chocolates, in developed economies such as the U.S., France, Belgium, and Germany."
  • This projected trend has been noted by at least two reputable sources, including Technavio and Fortune Business Insights.

Research Strategy

We began our research by reviewing reports about the global chocolate market, in order to assess the global economic outlook/sales and predicted growth trends for the chocolate market. Examples of those sources included Globe Newswire and Fortune Business Insights. The data we included in the Global Economic Outlook section is from Statista, which is also included in this Google Doc. The comprehensive data published by Statista identified insights about the economic outlook/sales for the global chocolate market. In addition to those sources, we also reviewed articles discussing the future of the global chocolate market from sources such as Food Dive and renowned chocolate manufacturer Barry Callebaut. Lastly, our research findings are focused on the global chocolate market, as was requested.
Sources
Sources