The Chocolate Market is Growing, and Your Competition is Hungry
The U.S. chocolate market is one retailers should keep an eye on, as it is currently seeing significant growth. Between 2008 and 2016, the chocolate market grew by an average of 4.1 percent per year, and it is projected to reach $20 billion by 2025. Interestingly, Americans currently account for 20 percent of the world’s total chocolate consumption.
Areas of Growth
One major area of growth is premium chocolate, which is defined as chocolate costing over $11 per pound. In fact, one analysis claims a 10 percent growth in sales over the past year. Along with premium chocolate, dark chocolate is also leading growth in the industry.
Reasons for Growth
Sheer population growth is one factor in the increased demand for chocolate. A rise in purchasing power also leads to larger markets for high-quality chocolate products, including organic varieties. Low-sugar and dark chocolate confections are increasingly being sought out by a population that is demanding options that support their healthy lifestyle choices.
Who Is the Market?
The average American consumes 11.2 pounds of chocolate per year. Adults make 92 percent of chocolate purchases, 60 percent of which are intended for personal consumption. Around 38 percent of these purchases are intended for immediate consumption.
Holiday seasons are critical for chocolate producers and sellers to maximize. Chocolate sales peak annually during Valentine’s week, where consumers purchase 58 million pounds of chocolate products that equal $345 million dollars in revenue.
Perhaps surprisingly, the most voracious chocolate consumers are adults over 45. Their consumption has steadily increased, while the value of purchases by adults in the 18 to 44 age group has decreased. If these trends are a result of younger adults’ desire to eat healthily and stay fit, chocolate marketers will need to position their products around these needs to stay competitive. For instance, promotions and advertising that pair chocolate with healthy foods (such as fresh fruit) or foods meant for entertaining (like wine or cheese) may be successful at attracting these consumers.
Constraints on Chocolate Profitability
While the stats do look promising, there are challenges to contend with. A decline in cocoa production, along with increased demand for cocoa products, means the world could face a cocoa shortage as soon as 2020. Pair this with changing consumer preferences surrounding chocolate quality, which also drive up the cost of production, and manufacturers and retailers will need to keep careful watch over the changing events in the chocolate market in order to stay profitable.
Monitoring Performance in the Chocolate Market
The data suggests there is a steadily increasing opportunity for sales growth in this category, especially if retailers are keeping an eye on their inventory and tracking which products are performing. GoSpotCheck’s software helps retailers make the right merchandising decisions by providing simple tools to track sales and incentives, analyze shelf share, monitor out-of-stocks, and aggregate field data to get a picture of current performance and opportunities for growth.