Post on 13-Oct-2020
JUGGLING GROWTH PRIORITIES IN CHOCOLATE
JACK SKELLY, FOOD ANALYST
ICCO, WEMBLEY, LONDON, SEPTEMBER 2015
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ASSESSING CHOCOLATE GLOBALLY
THE JUGGLING ACT
Chocolate in a nutshellJUGGLING GROWTH PRIORITIES IN CHOCOLATE
US$101 billionGLOBAL CHOCOLATE RETAIL SALES
US$237 per capitaHIGHEST -SWITZERLAND
33%GROWTH IN GLOBAL SALES 2010-2015
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The Good News: Value Sales of Chocolate Have GrownJUGGLING GROWTH PRIORITIES IN CHOCOLATE
Value Sales 2015 (US$ million)1500-18300500-1500200-5000-200
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The Bad News: Consumption Is StallingJUGGLING GROWTH PRIORITIES IN CHOCOLATE
Kg per Capita % CAGR 2010-20155-152-50-2-7-0
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High consumption
levels
Increasing health
awarenessMore snack alternatives
Sclerotic growth
Explaining Developed Market WoesJUGGLING GROWTH PRIORITIES IN CHOCOLATE
0369121518
050
100150200250
Swit
zerl
and
Irel
and
UK
Nor
way
Den
mar
k
Swed
en
Aus
tria
New
Zea
land
Aus
tral
ia
Kaz
akhs
tan
Rus
sia
Serb
ia
Cro
atia
Uru
guay
Hun
gary
Saud
i Ara
bia
Pola
nd
UA
E
Geo
rgia
Developed Countries Developing Countries % V
alu
e C
AG
R 2
00
9-2
015
US$
Per
Cap
ita
2015
US$ Spend Per Capita 2015 and Value Growth 2010-2015
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Buying chocolate less commonplace in developing regionsJUGGLING GROWTH PRIORITIES IN CHOCOLATE
Retail Sales of Snacks 2015 (US$ Fixed Exchange Rates)
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Improving accessibility Driving value
Manufacturers face two different challengesJUGGLING GROWTH PRIORITIES IN CHOCOLATE
Developing Markets
Developed Markets
51%INCREASE IN CHOCOLATE CONFECTIONERY PRICES 2002-2015
82%INCREASE IN COCOA PRICES 2002-2015
70%INCREASE IN PALM OIL PRICES 2005-2015
‐20
‐10
0
10
20
30
40
‐2,000
‐1,000
0
1,000
2,000
3,000
4,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Y‐o‐Y % Growth
US$ Per M
etric
Ton
ne
At a Time when Input Costs Are Increasing
Cocoa Price ‐ US$ per tonne Y‐o‐Y % Growth Chocolate Confectionery Unit Price Y‐o‐Y % Growth
Germany, 2.2 Mins
Japan, 6.7 Mins
Saudi Arabia, 15.7 Mins
Mexico, 25.5 MinsChina, 30.7 Mins
Egypt, 49.3 Mins
7.3 minutesAVERAGE TIME TO PURCHASE 100G IN DEVELOPED COUNTRIES
US$2.15PRICE PER 100G CHOCOLATE IN ASIAPACIFIC
US$1.50PER CAPITA SPEND ON CHOCOLATE IN INDIA
Time Taken to Earn Enough Money to buy 100g Chocolate
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Advantages of premium chocolateAppeals to more demanding consumersStands out in saturated marketsRetains greater brand loyaltyJustifies higher price pointsAchieves higher marginsExisting Examples…Hershey’s Brookside; Lindt Hello; Divine Chocolate; Mondelez Coco
How to drive value: focus on premium in developed marketsJUGGLING GROWTH PRIORITIES IN CHOCOLATE
-5
0
5
10
15
20
25
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
% G
row
th Y
ear-
on-Y
ear
US Chocolate Confectionery Sales 2010-2015
Hershey's Reese's
M&M's Ghirardelli
Lindt Ferrero Rocher
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Improving accessibility
Lower price points
Greater distribution
Cross-branding
Major players creating new price points in developing marketsJUGGLING GROWTH PRIORITIES IN CHOCOLATE
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Developed Developing
Long-term
Volume
Mass
Short-term
Value
Premium
The Juggling ActJUGGLING GROWTH PRIORITIES IN CHOCOLATE
THANK YOU FOR LISTENINGJack SkellyFood AnalystJack.skelly@euromonitor.comLinkedin: Jack Skelly