Chocolate Confectionery - US - July 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources and methodology
• Sales data
• Consumer survey data
• Abbreviations
• Terms
• Executive Summary
• Total sales holding at about $16.3 billion
• The competitive landscape is challenging
• Box/bag/bar more than 3.5oz is the biggest segment, with a 40% share
• The majority of chocolate sales take place outside FDMx channels
• But interest in premium chocolate may be waning
• Medical news is good and bad
• Increasing commodity prices affect industry
• The Hershey Co. is the market leader...for now
• Innovations from many countries
• Advertising constrained by childhood obesity concerns
• More than three quarters of adults buy chocolate
• Chocolate cravings are strong for more than two thirds of purchases
• Premium and organic
• Types of chocolate purchased
• Preferred brands
• Spouses and kids most likely to receive chocolate
• Market Size and Forecast
• Key points
• Chocolate sales continue to grow, but more slowly
• Chocolate sales and forecast
  • Figure 2: Total U.S. sales and forecast of chocolate confectionery, at current prices, 2002-12
  • Figure 3: Total U.S. sales and forecast of chocolate confectionery, at inflation-adjusted prices, 2002-12
• Wal-Mart sales
• Competitive Context
• Key points
• Chocolate is a popular sweet
  • Figure 4: Foods chosen to satisfy craving for sweets, April 2008
• Seasonal chocolate and non-chocolate confectionery
  • Figure 5: Seasonal sales of chocolate and non-chocolate confectionery (FDMx), by holiday, 2005 and 2007
• Segment Performance
• Key points
• Box/bag/bar more than 3.5oz is best-performing segment
• Smaller segments see declining sales
• FDMx is only part of the story
  • Figure 6: U.S. sales of chocolate confectionery, by segment (FDMx), 2005 and 2007
  • Figure 7: U.S. sales and forecast of chocolate confectionery, at current prices, top five segments (FDMx), 2002-12
• Segment Performance--Bar/Bag/Box more than 3.5oz
• Key points
• Premium products challenge mainstream players
  • Figure 8: U.S. sales and forecast of chocolate confectionery bar/bag/box less than 3.5oz, at current prices (FDMx), 2002-12
• Segment Performance--Seasonal Chocolate Confectionery
• Key points
• Seasonal chocolate sales depend on the calendar
  • Figure 9: U.S. sales and forecast of seasonal chocolate confectionery, at current prices (FDMx), 2002-12
• Easter is top chocolate holiday
  • Figure 10: Sales of chocolate, by holiday (FDMx), 2005 and 2007
• Segment Performance--Bar/Bag/Box less than 3.5oz
• Key points
• Impulse sales strong, as is competition
  • Figure 11: U.S. sales and forecast of chocolate bar/bag/box less than 3.5oz, at current prices (FDMx), 2002-12
• Segment Performance--Snack-size Chocolate
• Key points
• Majority of snack-size products appeal to kids and teens
  • Figure 12: U.S. sales and forecast of snack-size chocolate, at current prices (FDMx), 2002-12
• Segment Performance--Gift Box Chocolate
• Key points
• Gift boxes lose ground in FDMx channels
  • Figure 13: U.S. sales and forecast of gift box chocolate, at current prices (FDMx), 2002-12
• Segment Performance--Sugar-free Chocolate
• Key points
• Sugar-free chocolate was popular during the low carb fad
  • Figure 14: U.S. sales and forecast of sugar-free chocolate, at current prices (FDMx), 2002-12
• Retail Channels
• Key points
• The majority of chocolate purchases are outside traditional channels
• Multiple tiers of chocolate
  • Figure 15: Total U.S. sales of chocolate confectionery, by retail channel, 2005 and 2007
• Retail Channels--Supermarkets
• Stiff competition requires imaginative merchandising
  • Figure 16: U.S. sales of chocolate confectionery at food stores, at current prices, 2002-07
• Market Drivers
• Interest in premium remains strong but it may be fading
• Medical news: Good and bad
• Good news on chocolate
• Bad news on health
• Commodity prices are taking a toll
• Is confectionery "recession proof"?
• Leading Companies
• Key points
• The candy world is in a state of flux
• Mergers, acquisitions, and questions
  • Figure 17: Sales of leading chocolate manufacturers, FDMx sales, 2007 and 2008
• Brand Share--Box/Bar/Bag >3/5 oz.
• Key points
• Hershey leads, but doesn' t gain
  • Figure 18: Company and brand sales of chocolate bar/bag/box more than 3.5oz, FDMx, 2007 and 2008
• Brand Share--Seasonal Chocolate
• Key points
• Holiday candy sales dependent on the calendar
  • Figure 19: Company and brand sales of seasonal chocolate, FDMx, 2007 and 2008
• Brand Share--Box/Bar/Bag greater than 3/5 oz.
• Key points
• Hershey leads the segment, but has made insubstantial gains
• Nestlé sales decline
  • Figure 20: Company and brand sales of chocolate box/bar/bag less than 3.5oz, FDMx, 2007 and 2008
• Brand Share--Snack-size Chocolate
• Key points
• Sales decline in segment aimed primarily at kids
  • Figure 21: Company and brand sales of snack-size chocolate, FDMx, 2007 and 2008
• Brand Share--Gift Box Chocolate
• Key points
• FDMx gift box sales do not include seasonal products
• Russell Stover leads, but only Ferrero sees increases
  • Figure 22: Company and brand sales of gift box chocolate, FDMx, 2007 and 2008
• Brand Share--Sugar-free Chocolate
• Key points
• After low carb, sales decline
  • Figure 23: Company and brand sales of sugar-free chocolate, FDMx, 2007 and 2008
• Brand Qualities
• Key points
• Finding new seasons for seasonal chocolate
  • Figure 24: Gifting of chocolate, by holiday and recipient, May 2008
• Even more imaginative seasons and holidays
• Innovation and Innovators
• Key point
• International new product launches on the rise
  • Figure 25: International new product launches, chocolate confectionery, 2002-08
• Top North American trends
• International trends
• Organic and natural
• Seasonal chocolate is a guaranteed winner
• Ethical and fair trade
• Premium launches decline: is the market saturated?
• More healthful chocolate?
• Children' s new product launches limited
• Chocolate just for women and just for men
• Vintage and retro packaging tap into nostalgia trend
• Chocolate as medicine
• GNPD' s forecast for new launches
• Advertising and Promotion
• Overview
• Diet chocolate?
  • Figure 26: 3 Musketeers television ad, 2007
• Seasonal advertising
  • Figure 27: Hershey' s Kisses television ad, 2007
  • Figure 28: Hershey' s Reese' s television ad, 2007
  • Figure 29: M&Ms television ad, 2007
  • Figure 30: Russell Stover television ad, 2007
  • Figure 31: Whitman' s Sampler television ad, 2007
• Personalized chocolate
  • Figure 32: Hershey' s M&Ms television ad, 2007
  • Figure 33: Hershey' s Kisses television ad, 2007
• Who Buys Chocolate and for Whom?
• Key point
  • Figure 34: Purchase incidence of chocolate candy, by gender, age, household income, race/ethnicity and presence of children, April 2008
• Craving Chocolate
• Key points
  • Figure 35: Reasons for purchasing chocolate for personal consumption, by age, May 2008
• Premium and Organic Chocolate
• Key points
  • Figure 36: Opinions regarding premium chocolate, by household income, May 2008
• Types of Chocolate Purchased
• Key points
  • Figure 37: Types of chocolate purchased for personal consumption, by age, May 2008
  • Figure 38: Types of chocolate purchased for personal consumption, by household income, May 2008
• Brands
• Key points
• Adults' preferences are more limited
  • Figure 39: Brands of chocolate candy preferred by adults, January 2007-November 2007
• Teenagers more likely to choose a wide array of candy
  • Figure 40: Brands of non-chocolate candy preferred by teenagers, January 2007-November 2007
• Kids' brand choices more limited than those of teens
  • Figure 41: Children' s chocolate preferences, January 2007-November 2007
• Purchases for Others
• Key point
  • Figure 42: Chocolate purchased for others, by gender, May 2008
  • Figure 43: Chocolate purchased for others, by age, May 2008
  • Figure 44: Chocolate purchased for others, by household income, May 2008
• Chocolate for Spouses/Significant Others
• Key points
  • Figure 45: Reasons for giving chocolate to spouse/signficant other, by household income, May 2008
• Which holidays?
  • Figure 46: Holidays for giving chocolate to spouses/significant others, May 2008
• Chocolate for Children
• Key points
  • Figure 47: Reasons for buying chocolate for children, May 2008
• Which holidays?
  • Figure 48: Holidays for giving chocolate to children, May 2008
• Chocolate for Family Members
• Key points
  • Figure 49: Reasons for giving chocolate to family members, May 2008
• Which holidays?
  • Figure 50: Holidays for which chocolate is given to family members, May 2008
• Chocolate for Friends
• Key points
  • Figure 51: Reasons for giving chocolate to friends, May 2008
• Which holidays?
  • Figure 52: Holidays for which chocolate is given to friends, May 2008
• Chocolate for Co-workers
• Key points
  • Figure 53: Reasons for giving gifts to co-workers, May 2008
• Which holidays?
  • Figure 54: Holidays for which chocolate is given to co-workers, May 2008
• Key Purchase Measures
• Consumer insights--seasonal chocolate candy
  • Figure 71: Key purchase measures for seasonal chocolate candy, by household penetration, 2007*
• Valentine' s Day chocolate candy
• Brand leaders by penetration
  • Figure 72: Key purchase measures for the top Valentine' s Day chocolate candy brands, by household penetration, 2007*
• Easter chocolate candy
• Brand leaders by penetration
  • Figure 73: Key purchase measures for the top Easter chocolate candy brands, by household penetration, 2007*
• Halloween chocolate candy
• Brand leaders by penetration
  • Figure 74: Key purrchase measures for the top Halloween chocolate candy brands, by household penetration, 2007*
• Christmas chocolate candy
• Brand leaders by penetration
  • Figure 75: Key purchase measures for the top Christmas chocolate candy brands, by household penetration 2007*
• Appendix: Other Useful Consumer Tables
  • Figure 76: Reasons for buying chocolate for personal consumption in past year, by gender, May 2008
  • Figure 77: Reasons for buying chocolate for personal consumption in past year, by income, May 2008
  • Figure 78: Reasons for purchasing chocolate for personal consumption, by race/ethnicity, May 2008
  • Figure 79: Types of chocolate purchased, by race/ethnicity, May 2008
• Appendix: Trade Associations