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Chocolate Confectionery - US - April 2012

Chocolate confectionery posted modest year over year sales growth through the recession to reach $18.6 billion in 2011. A combination of product innovation and price increases led to a 16% gain in the category from 2006-11. Leading companies expanded their mainstay product lines by way of new formats and flavors in order to sway loyalists to try new things. Such tactics are key, given the saturation point of the market. With 92% of respondents to Mintel’s custom consumer survey consuming chocolate themselves, growth in the category will require boosting purchase occasions, rather than growing a greater consumer base.

The category benefits from consumer willingness to purchase products through a variety of retail channels. However, price increases seen in the category led to a slowdown in growth in 2011. Such activity opens the market to private label manufacturers that can benefit from consumer interest in saving money. At the same time, as price points for mainstream products rise closer to premium levels, premium brands have a chance to offer consumers a more quality bang for only slightly more buck. Throughout this report, Mintel will address the issues facing the category, including:

  • Given the challenging economy, what kind of shifts in buying behavior have been seen during the past year?
  • What are the leading market drivers, and how are manufacturers leveraging these drivers in order to maximize sales and profitability while curbing potential losses?
  • How can manufacturers navigate trends in healthy eating and concerns over obesity to grow sales in the category?
  • Which companies have been the most aggressive in terms of product innovations, and are they in sync with what consumers are most interested in?
  • What can companies do in terms of marketing and product mix to stay relevant to consumers who are cautious regarding spending, and are looking to eat better?
  • What are manufacturers doing in order to identify and maximize opportunities presented by socioeconomic, gender, racial/ethnicity, and other demographic factors?
  • What factors influence consumer behavior and what matters most to consumers?
  • How do premium chocolate consumers differ from non-premiums, and how can both groups be nurtured based on their interests?
  • Where are consumers most likely to buy chocolate products, and what kind of impact does this have on overall buying behavior?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Somewhat sluggish growth since 2006
                        • Uneven segment performance hampering overall market
                          • Hershey dominant in market
                            • Rising prices drive store brands’ appeal…
                              • …and bring premium products within reach
                                • Consumers channel surf for chocolate confectionery
                                  • Innovation important to category growth
                                    • Marketing efforts need a refresh
                                      • Chocolate enjoys near total household penetration
                                        • Snacking trend helps market; better-for-you (BFY) trend remains opportunity
                                          • Milk chocolate preferred by the majority of consumers
                                            • Women attracted to chocolate for positive experiences, men focus on price
                                            • Insights and Opportunities

                                              • Blur the confectionery category lines
                                                • Bring non-confectionery companies with sweet leanings into the act
                                                  • Make a definitive move with premium offerings
                                                    • Dressing up milk chocolate
                                                      • Focus on health
                                                      • Inspire Insights

                                                          • Trend 1: Hungry Planet
                                                            • Trend 2: Premiumization and Indulgence
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • Product innovations and price increases result in steady growth
                                                                  • Sales and forecast of chocolate confectionery
                                                                    • Figure 1: Total U.S. retail sales of chocolate confectionery, at current prices, 2006-16
                                                                    • Figure 2: Total U.S. retail sales of chocolate confectionery, at inflation-adjusted prices, 2006-16
                                                                  • Fan chart forecast
                                                                    • Figure 3: Fan chart forecast of chocolate confectionery, 2006-16
                                                                  • Walmart sales
                                                                  • Market Drivers

                                                                    • Key points
                                                                      • Candy consumption grows moderately between 2007 and 2011
                                                                        • Figure 4: Chocolate and other candy, July 2007-September 2011
                                                                      • Snacking strong
                                                                        • Obesity concerns impact attitude toward healthy eating
                                                                          • Price increases, package size reductions challenge category
                                                                          • Competitive Context

                                                                            • Key points
                                                                              • Private label gaining some momentum
                                                                                • BFY snacks
                                                                                  • Non-chocolate confectionery
                                                                                  • Segment Performance

                                                                                    • Key points
                                                                                      • Bag/bar/box innovations keep the segment outperforming the rest
                                                                                        • Figure 5: Total U.S. retail sales of chocolate confectionery, by segment, 2009-11
                                                                                    • Segment Performance—Chocolate (Bag/Bar/Box)

                                                                                      • Key points
                                                                                        • Larger-format bag/bar/box continues to dominate the category
                                                                                          • Figure 6: Total U.S. retail sales of chocolate (bag/bar/box; 3.5-oz+), 2006-16
                                                                                        • Smaller-format bag/bar/box sales grew 35% in five years
                                                                                          • Figure 7: Total U.S. retail sales of chocolate (bag/bar/box; less than 3.5-oz), 2006-16
                                                                                      • Segment Performance—Seasonal Chocolate

                                                                                        • Key points
                                                                                          • Seasonal chocolate well positioned for continued growth
                                                                                            • Figure 8: Total U.S. retail sales and forecast of seasonal chocolate, at current prices, 2006-16
                                                                                        • Segment Performance—Snack-size Chocolate

                                                                                          • Key points
                                                                                            • Format expansion gives consumers other snack options
                                                                                              • Figure 9: Total U.S. retail sales and forecast of snack-size chocolate, at current prices, 2006-16
                                                                                          • Segment Performance—Gift Box Chocolate

                                                                                            • Key points
                                                                                              • Gift box sales fell 10% over the past five years
                                                                                                  • Figure 10: Total U.S. retail sales and forecast of gift box chocolate, at current prices, 2006-16
                                                                                              • Segment Performance—Sugar-free Chocolate

                                                                                                • Key points
                                                                                                  • Sugar-free segment struggles
                                                                                                      • Figure 11: Total U.S. retail sales and forecast of sugar-free chocolate, at current prices, 2006-16
                                                                                                  • Retail Channels

                                                                                                    • Key points
                                                                                                      • Sales up in supermarkets, drug, and convenience
                                                                                                        • Figure 12: Total U.S. retail sales of chocolate confectionery, by channel, 2009 and 2011
                                                                                                        • Figure 13: Supermarket/food stores’ sales of chocolate confectionery, at current prices, 2006-11
                                                                                                      • Other retailers’ sales of chocolate confectionery
                                                                                                      • Retail Channels—Natural Supermarkets

                                                                                                        • Key points
                                                                                                          • With less market share, sales up in supermarkets, drug, and convenience
                                                                                                            • Figure 14: Natural supermarket sales of chocolate confectionery, at current prices, 2009-11*
                                                                                                            • Figure 15: Natural supermarket sales of chocolate confectionery, at inflation-adjusted prices, 2009-11*
                                                                                                          • Brands of significance
                                                                                                            • Organics and non-organics neck and neck
                                                                                                              • Figure 16: Natural supermarket sales of chocolate confectionery, by organic, 2009 and 2011*
                                                                                                            • Fair trade offerings keeping up with market growth
                                                                                                              • Figure 17: Natural supermarket sales of chocolate confectionery, by fair trade, 2009 and 2011*
                                                                                                          • Leading Companies

                                                                                                            • Key points
                                                                                                              • Hershey maintains top spot
                                                                                                                • Figure 18: Manufacturer FDMx sales of chocolate confectionery in the U.S., 2010 and 2011
                                                                                                            • Brand Share—Chocolate (Bag/Bar/Box)

                                                                                                              • Key points
                                                                                                                • Consumers encouraged to share
                                                                                                                  • Figure 19: Selected FDMx brand sales of chocolate (bag/bar/box; 3.5-oz+), 2010 and 2011
                                                                                                                • Price increases have consumers looking for savings
                                                                                                                  • Figure 20: Selected FDMx brand sales of chocolate (bag/bar/box; less than 3.5-oz), 2010 and 2011
                                                                                                              • Brand Share—Seasonal Chocolate

                                                                                                                • Key points
                                                                                                                  • Most segment leaders see strong growth from 2010-11
                                                                                                                    • Figure 21: Selected FDMx brand sales of seasonal chocolate, 2010 and 2011
                                                                                                                • Brand Share—Snack-size Chocolate

                                                                                                                  • Key points
                                                                                                                    • Mars makes gains on Hershey in snack-size segment
                                                                                                                      • Figure 22: Selected FDMx brand sales of snack-size chocolate, 2010 and 2011
                                                                                                                  • Brand Share—Gift Box Chocolate

                                                                                                                    • Key points
                                                                                                                      • No big gains among gift box leaders
                                                                                                                          • Figure 23: Selected FDMx brand sales of gift box chocolate, 2010 and 2011
                                                                                                                      • Brand Share—Sugar-free Chocolate

                                                                                                                        • Key points
                                                                                                                          • Russell Stover dominates sugar-free
                                                                                                                            • Figure 24: Selected FDMx brand sales of sugar-free chocolate, 2010 and 2011
                                                                                                                        • Innovations and Innovators

                                                                                                                          • Key points
                                                                                                                            • New innovation bolstering sales growth in market
                                                                                                                              • Figure 25: Chocolate confectionery product launches, by subcategory, 2008-12*
                                                                                                                            • Kosher and seasonal claims lead new releases in the category
                                                                                                                              • Figure 26: Chocolate confectionery product launches, by top 10 claims, 2008-12*
                                                                                                                            • Hershey and Mars lead new product releases
                                                                                                                              • Figure 27: Chocolate confectionery product launches, by leading companies, 2008-12*
                                                                                                                            • Store brands account for roughly 13% of new innovation annually
                                                                                                                              • Figure 28: Chocolate confectionery product launches, by private-label share, 2008-12*
                                                                                                                            • Product innovations
                                                                                                                              • Seasonality
                                                                                                                                • Pieces
                                                                                                                                  • Health
                                                                                                                                    • Premium
                                                                                                                                      • Dark chocolate
                                                                                                                                        • Savory
                                                                                                                                          • Regional
                                                                                                                                            • Fair trade
                                                                                                                                            • Marketing Strategies

                                                                                                                                              • Overview
                                                                                                                                                • Brand analysis: M&M’s
                                                                                                                                                  • Figure 29: Brand analysis of M&M’s, 2012
                                                                                                                                                • TV presence
                                                                                                                                                  • Figure 30: M&M’s TV ad, “Wish Granted,” 2011
                                                                                                                                                • Other initiatives
                                                                                                                                                  • Online initiatives
                                                                                                                                                    • Brand analysis: Dove Chocolate
                                                                                                                                                      • Figure 31: Brand analysis of Dove Chocolate, 2012
                                                                                                                                                    • TV presence
                                                                                                                                                      • Figure 32: Dove Chocolate TV ad, “Quiet Time,” 2011
                                                                                                                                                    • Other initiatives
                                                                                                                                                      • Brand analysis: The Hershey Company
                                                                                                                                                        • Figure 33: Brand analysis of The Hershey Company, 2012
                                                                                                                                                      • TV presence
                                                                                                                                                        • Figure 34: The Hershey Company TV ad, “Bubbles,” 2011
                                                                                                                                                      • Online initiatives
                                                                                                                                                        • Brand analysis: Lindt and Ghirardelli
                                                                                                                                                          • Lindt
                                                                                                                                                            • Figure 35: Brand analysis of Lindt, 2012
                                                                                                                                                            • Figure 36: Lindt TV ad, “Luxurious Chocolate,” 2011
                                                                                                                                                          • Ghirardelli Chocolate Company
                                                                                                                                                            • Figure 37: Brand analysis of Ghirardelli Chocolate Company, 2012
                                                                                                                                                            • Figure 38: Ghirardelli TV ad, “Savor the Moment,” 2011
                                                                                                                                                          • Brand analysis: Whitman’s Candies
                                                                                                                                                            • Figure 39: Brand analysis of Whitman’s Candies, 2012
                                                                                                                                                          • TV presence
                                                                                                                                                            • Figure 40: Whitman’s Candies TV ad, “Winning Play,” 2012
                                                                                                                                                        • Household Usage

                                                                                                                                                          • Key points
                                                                                                                                                            • Trended chocolate usage within the household, 2007-11
                                                                                                                                                              • Candy consumption is for adults
                                                                                                                                                                • Figure 41: Brand usage—chocolate and other candy, July 2007-September 2011
                                                                                                                                                              • Kids eating less candy?
                                                                                                                                                                • Figure 42: Bars and other candy, July 2007-September 2011
                                                                                                                                                              • After dipping slightly, teen candy consumption is at a four-year high
                                                                                                                                                                • Figure 43: Chocolate and other candy, July 2007-September 2011
                                                                                                                                                              • Household and personal usage
                                                                                                                                                                • Increasing consumption frequency will be key for growth
                                                                                                                                                                  • Figure 44: Household usage, December 2011
                                                                                                                                                                • Women slightly more likely than men to eat chocolate
                                                                                                                                                                  • Figure 45: Household usage, by gender, December 2011
                                                                                                                                                                • Chocolate’s popularity spans adult age groups…
                                                                                                                                                                  • Figure 46: Household usage, by age, December 2011
                                                                                                                                                                • …as well as household income levels
                                                                                                                                                                  • Figure 47: Household usage, by household income, December 2011
                                                                                                                                                              • Where Consumers Buy Chocolate

                                                                                                                                                                • Key points
                                                                                                                                                                  • Purchase locations varied, but mass and supermarkets dominate
                                                                                                                                                                      • Figure 48: Where consumers buy chocolate, by gender, December 2011
                                                                                                                                                                    • Affordability and convenience are key among younger consumers
                                                                                                                                                                      • Figure 49: Where consumers buy chocolate, by age, December 2011
                                                                                                                                                                    • Low-income households seek affordable outlets
                                                                                                                                                                        • Figure 50: Where consumers buy chocolate, by household income, December 2011
                                                                                                                                                                      • Parents buy chocolate wherever they can
                                                                                                                                                                        • Figure 51: Where consumers buy chocolate, by presence of children in household, December 2011
                                                                                                                                                                    • Chocolate Buying Behavior

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Buying behavior
                                                                                                                                                                          • Consumers look for value, but are not limited by price
                                                                                                                                                                            • Figure 52: Buying behavior, December 2011
                                                                                                                                                                          • Youngest and oldest most likely to limit chocolate purchases
                                                                                                                                                                            • Figure 53: Buying behavior, by age, December 2011
                                                                                                                                                                          • Lowest-income households most concerned with price
                                                                                                                                                                            • Figure 54: Buying behavior, by household income, December 2011
                                                                                                                                                                          • Attitudes toward chocolate prices
                                                                                                                                                                            • Clarifying price increases
                                                                                                                                                                              • Figure 55: Attitudes toward chocolate prices, by age, December 2011
                                                                                                                                                                              • Figure 56: Attitudes toward chocolate prices, by household income, December 2011
                                                                                                                                                                          • What Matters to Chocolate Consumers

                                                                                                                                                                            • Key points
                                                                                                                                                                              • Young consumers want premium products at a low price
                                                                                                                                                                                  • Figure 57: What matters to chocolate consumers, by age, December 2011
                                                                                                                                                                                • Highest income earners less likely to be picky about chocolate claims
                                                                                                                                                                                    • Figure 58: What matters to chocolate consumers, by household income, December 2011
                                                                                                                                                                                  • Why consumers buy premium chocolate
                                                                                                                                                                                      • Figure 59: Why consumers buy premium chocolate, by gender, December 2011
                                                                                                                                                                                  • Favorite Chocolate Types/Flavors

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Milk chocolate preferred by more than half of consumers
                                                                                                                                                                                        • Figure 60: Favorite chocolate types/flavors, by gender, December 2011
                                                                                                                                                                                      • Dark chocolate a draw among over-45s
                                                                                                                                                                                        • Figure 61: Favorite chocolate types/flavors, by age, December 2011
                                                                                                                                                                                      • Higher household income earners also drawn to dark chocolate
                                                                                                                                                                                        • Figure 62: Favorite chocolate types/flavors, by household income, December 2011
                                                                                                                                                                                    • Attitudes toward Chocolate

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Women indulge, men less discerning
                                                                                                                                                                                          • Figure 63: Attitudes toward chocolate, by gender, December 2011
                                                                                                                                                                                        • 18-34s most engaged in chocolate experience
                                                                                                                                                                                          • Figure 64: Attitudes toward chocolate, by age, December 2011
                                                                                                                                                                                        • Premium chocolate rewards most affluent
                                                                                                                                                                                          • Figure 65: Attitudes toward chocolate, by household income, December 2011
                                                                                                                                                                                      • Impact of Race and Hispanic Origin

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Black shoppers appear as convenience-oriented impulse consumers
                                                                                                                                                                                            • Figure 66: Where consumers buy chocolate, by race/Hispanic origin, December 2011
                                                                                                                                                                                          • Black shoppers can be attracted by low price, Asians target for gifts
                                                                                                                                                                                            • Figure 67: Buying behavior, by race/Hispanic origin, December 2011
                                                                                                                                                                                          • Reward messaging should resonate with Asian consumers
                                                                                                                                                                                            • Figure 68: Attitudes toward chocolate, by race/Hispanic origin, December 2011
                                                                                                                                                                                          • Black consumers heavily drawn to milk chocolate
                                                                                                                                                                                            • Figure 69: Favorite chocolate types/flavors, by race/Hispanic origin, December 2011
                                                                                                                                                                                        • Custom Consumer Groups

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • What matters
                                                                                                                                                                                              • Premiums not just looking for expensive, niche products
                                                                                                                                                                                                  • Figure 70: What matters to chocolate consumers, by premiums, December 2011
                                                                                                                                                                                                • Dark Chocolate Lovers drawn to premium qualities
                                                                                                                                                                                                    • Figure 71: What matters to chocolate consumers, by chocolate, December 2011
                                                                                                                                                                                                  • Favorite types/flavors
                                                                                                                                                                                                    • Non-premiums drawn to traditional flavors
                                                                                                                                                                                                        • Figure 72: Favorite chocolate types/flavors, by premiums, December 2011
                                                                                                                                                                                                        • Figure 73: Favorite chocolate types/flavors, by chocolate, December 2011
                                                                                                                                                                                                      • Attitudes toward chocolate
                                                                                                                                                                                                        • Premiums don’t view chocolate as empty calories
                                                                                                                                                                                                            • Figure 74: Attitudes toward chocolate, by premiums, December 2011
                                                                                                                                                                                                          • Chocolate buying behavior
                                                                                                                                                                                                            • Premiums good target for gift chocolate
                                                                                                                                                                                                              • Figure 75: Buying behavior, by premiums, December 2011
                                                                                                                                                                                                            • Attitudes toward chocolate prices
                                                                                                                                                                                                              • Premiums just as price-conscious as the rest
                                                                                                                                                                                                                • Figure 76: Attitudes toward chocolate prices, by premiums, December 2011
                                                                                                                                                                                                            • Appendix—SymphonyIRI/Builders—Key Household Purchase Measures

                                                                                                                                                                                                                • Overview of chocolate confectionery
                                                                                                                                                                                                                  • Easter chocolate confectionery
                                                                                                                                                                                                                    • Consumer insights on key purchase measures—Easter chocolate confectionery
                                                                                                                                                                                                                      • Brand map
                                                                                                                                                                                                                        • Figure 77: Brand map, selected brands of Easter chocolate confectionery buying rate, by household penetration, 2011*
                                                                                                                                                                                                                      • Brand leader characteristics
                                                                                                                                                                                                                        • Key purchase measures
                                                                                                                                                                                                                          • Figure 78: Key purchase measures for the top brands of Easter chocolate confectionery, by household penetration, 2011*
                                                                                                                                                                                                                        • Christmas chocolate confectionery
                                                                                                                                                                                                                          • Consumer insights on key purchase measures—Christmas chocolate confectionery
                                                                                                                                                                                                                            • Brand map
                                                                                                                                                                                                                              • Figure 79: Brand map, selected brands of Christmas chocolate confectionery buying rate, by household penetration, 2011*
                                                                                                                                                                                                                            • Brand leader characteristics
                                                                                                                                                                                                                              • Key purchase measures
                                                                                                                                                                                                                                • Figure 80: Key purchase measures for the top brands of Christmas chocolate confectionery, by household penetration, 2011*
                                                                                                                                                                                                                              • Valentine’s Day chocolate confectionery
                                                                                                                                                                                                                                • Consumer insights on key purchase measures—Valentine’s Day chocolate confectionery
                                                                                                                                                                                                                                  • Brand map
                                                                                                                                                                                                                                    • Figure 81: Brand map, selected brands of Valentine’s Day chocolate confectionery buying rate, by household penetration, 2011*
                                                                                                                                                                                                                                  • Brand leader characteristics
                                                                                                                                                                                                                                    • Key purchase measures
                                                                                                                                                                                                                                      • Figure 82: Key purchase measures for the top brands of Valentine’s Day chocolate confectionery, by household penetration, 2011*
                                                                                                                                                                                                                                    • Halloween chocolate confectionery
                                                                                                                                                                                                                                      • Consumer insights on key purchase measures—Halloween chocolate confectionery
                                                                                                                                                                                                                                        • Brand map
                                                                                                                                                                                                                                          • Figure 83: Brand map, selected brands of Halloween chocolate confectionery buying rate, by household penetration, 2011*
                                                                                                                                                                                                                                        • Brand leader characteristics
                                                                                                                                                                                                                                          • Key purchase measures
                                                                                                                                                                                                                                            • Figure 84: Key purchase measures for the top brands of Halloween chocolate confectionery, by household penetration, 2011*
                                                                                                                                                                                                                                        • Appendix—Other Useful Tables

                                                                                                                                                                                                                                          • Sales data
                                                                                                                                                                                                                                            • Figure 85: Total U.S. retail sales and forecast of novelty chocolate, at current prices, 2006-16
                                                                                                                                                                                                                                            • Figure 86: Selected FDMx brand sales of novelty chocolate, 2010 and 2011
                                                                                                                                                                                                                                          • Consumer data
                                                                                                                                                                                                                                            • Figure 87: Buying behavior, by gender, December 2011
                                                                                                                                                                                                                                            • Figure 88: Why consumers buy premium chocolate, by age, December 2011
                                                                                                                                                                                                                                            • Figure 89: Favorite chocolate types/flavors, by presence of children in household, December 2011
                                                                                                                                                                                                                                            • Figure 90: Where consumers buy chocolate, by region, December 2011
                                                                                                                                                                                                                                            • Figure 91: Buying behavior, by chocolate, December 2011
                                                                                                                                                                                                                                            • Figure 92: Attitudes toward chocolate prices, by chocolate, December 2011
                                                                                                                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                                                                          • Ferrero U.S.A. Inc.
                                                                                                                                                                                                                                          • Hershey Company, The
                                                                                                                                                                                                                                          • Lindt & Sprüngli (US)
                                                                                                                                                                                                                                          • Mars Incorporated
                                                                                                                                                                                                                                          • Nestlé USA
                                                                                                                                                                                                                                          • Russell Stover Candies Inc.
                                                                                                                                                                                                                                          • The Ghirardelli Chocolate Company

                                                                                                                                                                                                                                          Chocolate Confectionery - US - April 2012

                                                                                                                                                                                                                                          US $3,995.00 (Excl.Tax)