With the majority of consumers now turning towards healthy food and beverage options, the confectionary industry is bound to suffer…or is it? According to a new study by market research firm Packaged Facts, premium chocolate products are growing in demand are expected to reach a market value of $23 billion this year.
According to Packaged Facts, the US chocolate and candy market has been growing at a compound annual growth rate (CAGR) of over two percent from 2013 to 2018. In their report, Chocolate Candy: U.S. Market Trends and Opportunities, 12th Edition, the company detailed further growth in this segment.
“The chocolate market is indisputably dynamic with a strong pace of innovation, an influx of creative new players, and a steady flow of new products that engage diverse groups of consumers,” said David Sprinkle, research director for Packaged Facts. “There remains consumer devotion to confectionery products and the role of chocolate candy in particular as an accessible luxury, creating many opportunities to trade consumers up to premium products.”
According to Sprinkle, premium chocolate offerings played a significant role in increasing overall chocolate sales. This is because premium chocolates are considered as an affordable luxury among consumers. In fact, consumers have been found to be willing to pay extra for premium products.
Now that a lot of food products are available for purchase online, consumers have even more access to their favorite foods. However, this trend has been known to decrease brick-and-mortar store sales. Nevertheless, Sprinkle believes this works towards the chocolate industry’s advantage.
“Online shopping is truly the new playground for premiumization,” says Sprinkle. “Shifts in shopping behavior such as self-checkout and online purchasing have potentially dampened the types of in-store impulse purchases that traditionally drive a high level of chocolate sales. However, this is offset to an extent by e-commerce increasing the availability and purchasing of specialty products including local, nostalgic, and premium gift chocolates.”
Premium chocolates are also in high demand during festive seasons such as Christmas, Easter, Halloween and Valentines Day. This is because premium chocolates are commonly gifted among consumers during these seasonal celebrations. According to Packaged Facts, seasonal/holiday chocolate offerings make up a quarter of total market sales with Easter being the largest segment.
These unique chocolate offerings continue to grow in popularity because of continuous innovation within their category. Whether dark or milk, chocolate can be combined with a variety of ingredients to create hundreds of premium chocolate offerings. Chocolate products that mix flavors such as sweet and spicy (like Lindt’s chili dark chocolate) or contain fruits and nuts as fillings continue to excite and attract new consumers.
As consumers continue to search for nutrient dense food products the chocolate industry is likely to produce more indulgent products as chocolate products transition from being considered as snacks to luxurious desserts.