SA CHOCOLATE INDUSTRY LANDSCAPE REPORT

MARCH 2016

REPORT OVERVIEW

2

For the Global Chocolate Section:

What are the current market dynamics of the global chocolate industry?

What are the global chocolate production and consumption trends?

What are the global chocolate industry trends, challenges and reactive strategies?

For the South African Chocolate Section:

What are the current market dynamics of the SA chocolate industry?

Who are the key manufacturing players in the SA chocolate industry?

For the South African Chocolate Retail and Pricing Analysis Section:

Who are the key retail players in the SA chocolate industry?

What are the prices of chocolates at retail outlets i.e. bars, slabs, and assortments?

What are the prices of popular chocolate brands across South African supermarkets?

In terms of South African Consumer Insights and Trends:

What are the statistics regarding the most popular chocolate brands in 2015?

What are the chocolate consumer trends and forecasts (2010-2019)?

SOME KEY QUESTIONS THE REPORT WILL HELP YOU TO ANSWER:

The South African Chocolate Landscape Report (79 pages) provides a dynamic synthesis of industry

research, examining the local and global chocolate industry from a uniquely holistic perspective, with

detailed insights into the entire value chain – from production right through to consumption.

3

SCREENSHOTS FROM REPORT

79 page report filled with detailed charts, graphs, tables and insights

18%

11%9%

7%

4% 3%

Forecast Of Leading Chocolate Consuming Countries In 2020

Forecast Share of Global Consumption by 2020

SAMPLE FROM REPORT:GLOBAL CONSUMPTION

4

7.2 million metric tons of chocolate

was consumed globally in 2015,

with average year-over-year

demand growth since 2008 being

steady at just over 3%

One of the primary drivers of this 3%

increase is the growing middle class

in China, India, and Brazil.

While Europe and North America are

relatively mature markets, increasing

discretionary household income in

developing countries is a major factor

in stable demand growth.

The primary chocolate manufacturing

regions –Europe and the United

States – are the main importers of

post-processing cocoa products.

However, there has been a dramatic

increase in the importation of post-

processing cocoa products in China

over the last 5 years.

Source: http://www.worldcocoafoundation.org

SAMPLE FROM REPORT:INDUSTRY OVERVIEW

5

The South African retail chocolate

market is valued at R5.03bn (as of

2015) and is predicted to grow over

the next five years. This growth is

expected to continue despite the

increasing costs of chocolate

products, due to the rising costs of

raw materials.

Mondelēz has earmarked South

Africa as one of eight markets that will

produce 70% of world chocolate

confectionery growth in 2016.

The retail market is highly

consolidated, with Cadbury (a

subsidiary of Kraft Foods), Nestlé and

Beacon controlling 85% of retail sales.

However, small artisan chocolate

manufacturers are beginning to enjoy

a larger chunk of the market.

Leading brands are Cadbury’s Dairy

Milk, Lunch Bar, PS and Chomp, and

Nestlé’s Bar One and KitKat.

Source: www.financialmail.co.za ; www.flandersinvestmenttrade.com

Chocolate slabs are by far the most popular

chocolate choice, holding over 50% share of

the market, but the specialty market is

growing rapidly.

SA consumer interest in locally sourced

ingredients is seeing strong growth of

domestic premium brands such as Ezulwini

Chocolat, Huguenot Fine Chocolates and

Honest Chocolate.

“Chocolate is one of those products that is

recession proof. The market is still growing at

around 10% per year’’.

- Cathal Queally, Brand Manager of

Chocolate Direct, a high-end supplier.

SAMPLE FROM REPORT:INDEPENDENT CHOCOLATIERS:

6Source: http://www.financialmail.co.za/ ; https://beyerschocolates.com ; http://www.smesouthafrica.co.za/

During 2014, the specialty food

industry evolved to meet growing

consumer demands for quality and

unique products, chocolatiers have

taken heed and begun creating

specialty chocolates. From dark

and vegan chocolates, to spicy and

fruity flavors, chocolatiers are

finding their niche.

"Niche players are eroding big

players’ market shares," says Kees

Beyers, Belgian-born owner of Beyers

Chocolates, one of SA’s biggest

independent chocolatiers.

South Africa is moving away from

mass produced products because

there are too many big corporations

benefiting from current trends.

“People also associate small,

artisanal products with quality, good

service and attention to detail which is

certainly true.”- Elise Suckerman

“Local niche players are in a far more

competitive position now, after import duty on

raw materials was dropped three years ago. It

levelled the playing field, since imported

finished products have long enjoyed duty-free

status.” – Kees Beyers

7

Year,, 1 2 3+ Total

2010 3,679,000 2,646,000 3,153,000 9,477,000

2011 3,401,000 2,818,000 3,266,000 9,485,000

2012 3,411,000 2,698,000 2,879,000 8,989,000

2013 3,536,000 2,708,000 3,146,000 9,391,000

2014 3,605,000 2,601,000 2,913,000 9,119,000

2015 3,474,000 2,479,000 2,418,000 8,372,000

38% 40% 41% 38% 40% 41%

29% 29% 30% 29% 29% 30%

34% 32% 29% 34% 32% 29%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015

How many boxes of chocolate assortments have you purchased in the past 4 weeks? (2010-2015)

3+

2

1

SAMPLE FROM REPORT:CHOCOLATE ASSORTMENTS VOLUME TRENDS

Between 2010 and 2015, the proportion of purchasers who had personally bought 3+ boxes of Chocolate

Assortments in the previous 4 weeks, declined from 34% to 29%.

In 2015, 41% (3.5 million) of Chocolate Assortment purchasers had personally bought one box in the past 4 weeks,

30% (2.5 million) had bought two boxes and 29% (2.4 million) had purchased 3 or more.

Source: AMPS 2010A-2015A (Adult population 16+ years)

Sample Size: 24 408 (2010); 24 427 (2011); 24 615 (2012); 24 824 (2013); 24 994 (2014); 25 078 (2015)

Based on weighted numbers

8

TABLE OF CONTENTS

1. Executive Summary (5 pages):

1.1 Global Industry Snapshot 2015

1.2 South African Industry Snapshot 2015

1.3 South African Consumer Trends

1.4 Industry Drivers and Restraints

1.5 Dashboard: South African Chocolate Bar and Slab Consumers

2. Global Chocolate Industry Overview (5 pages):

2.1 Global Industry Overview: Yildiz , Ezaki Glico, Arcor, Lindt and Sprugli, Hershey's, Meiji , Ferrero, Nestlé, Mondelez, Mars.

2.2 Global Cocoa Production

2.3 Global Consumption: United States of America, Russia, United Kingdom, Germany, Brazil, India

2.4 Global Pricing: Cocoa Bean Markets

2.5 Global Value Chain

9

TABLE OF CONTENTS

3. South African Chocolate Industry Overview (24 pages):

South African Chocolate Industry Overview

3.1 Industry Overview

3.2 Market Landscape and Dynamics

3.3 SA Channel Distribution: 2015

3.4 Industry Trends 2015

3.5 Key Industry Drivers

3.6 Key Industry Challenges

South African Chocolate Manufacturing Overview

3.7 South African Chocolate Manufacturers: Lindt and Sprüngli

3.8 South African Chocolate Manufacturers: Nestlé

3.9 South African Chocolate Manufacturers: Tiger Brands

3.10 South African Chocolate Manufacturers: Mondelēz International

3.11 South African Chocolate Manufacturers: Ferrero

10

TABLE OF CONTENTS

4. South African Chocolate Retail Analysis and Pricing Analysis (14 pages):

South African Retail Analysis

4.1 South African Retail Overview

4.2 South African Retail Overview: Woolworths

4.3 South African Retail Overview: Spar

4.4 South African Retail Overview: Independent Chocolatiers

South African Chocolate Pricing Analysis (conducted w/c 04 March 2016)

4.5 Chocolate Pricing Analysis: Chocolate Bars at Supermarkets: Lunch Bar, P.S., Bar-One, Kit Kat, Aero, Chomp, Black Cat,

Jungle Oats bar, Crunchie, Flake

4.6 Chocolate Pricing Analysis: Chocolate Slabs at Supermarkets: Cadbury, Beacon, Nestle Aero, Nestle Milkybar, Nestle Classic,

Nestle Milo, Lindt Lindor, Lindt Excellence, Milka, Cote d’Or, Toblerone.

4.7 Chocolate Pricing Analysis: Chocolate Assortments at Supermarkets: Cadbury, Cadbury Dairy Milk Nutties, Beacon, Nestle,

Ferrero Rocher, Lindt Lindor, Quality Street, Nestle Passions, Milk Tray, Fav’rites.

11

TABLE OF CONTENTS

5. South African Chocolate Consumer Trends (18 pages):

5.1 South African Consumer Trends

5.2 AMPS Survey Methodology and Sample Design

5.3 AMPS Survey Questions Asked

5.4 Chocolate Bars, Slabs and Assortments Consumption Trends: 2010-2015

5.5 Chocolate Slabs Volume Trends: 2010-2015

5.6 Chocolate Assortments Volume Trends: 2010-2015

5.7 Most Popular Chocolate Bar Brand: 2015

5.8 Most Popular Chocolate Slab Brand: 2015

5.9 Most Popular Chocolate Assortment (Box) Brand: 2015

5.10 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Bars

5.11 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Slabs

5.12 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Assortments

ORDER FORM

12

ORDERING INSTRUCTIONS

COMPANY DETAILS

Company Name:

Physical Address:

Town/City: Postal Code:

Country:

Purchaser Name:

(name to appear on invoice)

Purchaser email address:

Telephone number: VAT number:

CONFIRMATION: I/we wish to order this publication (please tick)

Title of Publication Total Ex Vat Tick Box

South African Coffee Landscape Report 2015: Full Report R25,000

South African Coffee Landscape Report 2015: One Section R7,500

ACKNOWLEDGEMENT

I am authorised to order this publication on behalf of the company and agree to the payment

terms.

________________________________

Client (Print Name)

______________________

Signature

______________________________

Capacity

______________

Date

(1.) Complete the order form and email back to info@insightsurvey.co.za (2.) An invoice will be

generated and e-mailed (3.) The report will be emailed upon receipt of payment or when proof of payment

has been provided (4.) All prices exclude 14 % VAT.

13

COMPANY OVERVIEW

Insight Survey is a South African B2B market research company with almost 10 years of

heritage, focusing on business-to business (B2B) market research to ensure smarter,

more-profitable business decisions are made with reduced investment risk.

We offer B2B market research solutions to help you to successfully improve or expand

your business, enter new markets, launch new products or better understand your

internal or external environment.

Our bespoke Competitive Business Intelligence Research can help give you the edge in a global

marketplace, empowering your business to overcome industry challenges quickly and effectively,

and enabling you to realise your potential and achieve your vision.

From strategic overviews of your business’s competitive environment through to specific

competitor profiles, our customised Competitive Intelligence Research is designed to meet your

unique needs.

COMPETITIVE INTELLIGENCE

OUR RESEARCH SOLUTIONS

Competitor pricing research

Store visits and store checks

Competitor interviews

Customer interviews

Company website analysis

Governmental held records

14

CONTACT DETAILS

Telephone: +27 (0) 21 045-0202

Physical Address: Unit 5

Building 12

The Estuaries

Century City

Cape Town

Contact: info@insightsurvey.co.za

Website: www.insightsurvey.co.za