Chocolate Confectionery - UK - April 2010[1]

8/8/2019 Chocolate Confectionery - UK - April 2010[1]

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Chocolate Confectionery

April 2010


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2el International Group. All rights reserved. Confidential to Mintel.

How rising commodity prices have affected

the chocolate confectionery market

What have been the opportunities for new

product development in the market?

How competitive has the market been, and

is there room for smaller players?

What are the implications of Krafts

takeover of Cadbury?

What are consumers primary motivations

for buying chocolate confectionery? How has the chocolate confectionery

market been affected by consumers

increased health concerns?

Key themes


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Commodity prices inflate value sales growth

Value sales of chocolate confectionery increased by 11.7% between 2007 and 2009, however with the

effects of inflation taken into account, value sales actually fell by 2.9%

Commodity price inflation put pressure on manufacturers margins which led to initiatives, that enabled

them to shore up raw ingredients supplies

Dairy Milk still on top

Dairy Milk is still the top brand in the chocolate confectionery category accounting for just over a tenth of

all chocolate confectionery sales

It has retained their status as the leading chocolate confectionery brand, helped by significant marketing

support and new product innovation

Consumers still like their treats

Consumers are aware of the need to maintain a healthy diet, and to take care of their health, just under50% claim to still like treating themselves to foods they know are not good for them

Consumers are primarily eating chocolate as a way to treat themselves, and it is also a way for parents

to treat their children

Despite the calories, and high fat content of chocolate confectionery, women especially use chocolate as

a way to reward themselves

Summary


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Internal Market Environment

The growth in fair trade sales

has continued unabated

despite the economic

downturn with chocolate

confectionery taking a larger

stake of this market

Obesity levels in adults and

children have increased atworrying rates forcing the FSA

to embark on health campaigns

advising consumers how best

to maintain a more balanced

diets

Half of consumers admit totreating themselves to

foods they know are not

good for them, despite

being aware of the need to

maintain a healthy diet

Educational establishments

have being trying to stem

rising obesity levels, workingwith key stakeholders in

schools to ensure children are

eating a healthy diet


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Broader Market Environment

Chocolate confectionery

manufacturers have faced

increased pressure as the

price of cocoa has continued

to rise

Rising levels of affluence have

had a beneficial effect on theUK confectionery market,

helping to increase spending on

treats

In the next five years, the number

of children aged 5-9 is anticipatedto increase by 12% up to 2015.

This is positive for the market, as

the purchase of chocolate is

strongly linked to families with

children

The Food Standards Agency

(FSA) is urging manufacturers to

increase the amount of money

they spend promoting their

healthier food ranges


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Manufacturers have sought to meet the needs of

consumers by reformulating their product ranges,

removing artificial colours and additives

Consumers continued need to treat themselves

has helped sustain interest and sales in thechocolate confectionery market

The number of children aged 5-9 is projected to

increase by 11.9% between 2010 and 2015, and

they represent an important target for chocolate

confectionery

The projected 18.8% growth in ABs between 2010

and 2015 will benefit the premium chocolate

confectionery segment

Ethical considerations have featured more in new

product launches in 2009, compared to 2007.

Cadburys sourcing of fairtrade cocoa for its

Dairy Milk brand will boost the fair trade market

Concerns about obesity levels in adults and

children is impacting on chocolate

confectionery consumption

Decreases in above-the-line spend and new

product innovation will hinder future growth inthe market

The ban on TV advertising to children, and the

restriction of consumption and sales of

chocolate confectionery has continued to be a

challenge for manufacturers

Rising cocoa prices impacted on manufacturingcosts for chocolate confectionery manufacturers

Penetration of chocolate confectionery has

continued to fall, decreasing by 2.1% between

2005 and 2009.

Strengths and Weaknesses


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Whos Innovating ?

Cadbury dominated new launches, with two fifths ofits innovation being focused on their Dairy Milk andGreen and Blacks brands

Ethical considerations have increased in prominencein the chocolate confectionery category in 2009compared to 2007, while there were fewer launches

of premium products

Limited edition launches featured more frequently inthe chocolate confectionery market, and helpedbring novelty to the market


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Forecast of UK Retail value sales of Chocolate Confectionery, 2005-15

Between 2007 and 2009, value sales of chocolate confectionery increased by 11.7% toreach an estimated 2.3 billion in 2009

The market was believed to be recession-proof; however demand for the occasionalindulgent treat has not supported sales growth in real terms as penetration of

chocolate has fallen

Source: Mintel

Market Value and Forecast


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Chocolate confectionery by segment, 2005-09

Source: Mintel

Health has been on the agenda for chocolate confectionery, as thegovernment has continued to tackle the issue of portion control which willaffect countlines

The premium category struggled between 2007 and 2009 as consumersfocused on value, and this was reflected in a drop in the number of premiumlaunches from 29% (of all launches in the category) in 2007 to 12% by 2009

Segment Performance

2005 2007 2009 % ch an ge % ch an ge

m % m % m % 2005-09 2007-09

Countlines 1,06 3 55 1,092 5 3 1,237 54 +16.4 +13.3Moulded bars 543 28 614 3 0 71 0 31 +30.8 +15.7Self lines 343 18 345 1 7 34 4 15 +0.2 -0.3

To ta l 1,94 9 100 2,050 100 2,291 100 +17.5 +11.7* f igures ma y not equal due to round ing


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Manufacturers' share of the Chocolate confectionery market, 2005 - 2009

The five leading manufacturers led by Cadbury and Mars accounted for approximately 86% ofall chocolate confectionery sales

Cadbury focused a great deal of its attention in 2009, fending off Kraft Foods attempts to takeover the company

Mars has not been very active with new product launches between 2008 and 2009

Dairy Milk has retained its status as the top-selling chocolate confectionery brand, helped bysignificant marketing support and new product innovation

Source: Mintel

Market Share

Cadbury

Mars


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MAIN MONITORED MEDIA ADVERTISING EXPENDITURE ON

CHOCOLATE CONFECTIONERY (BARS AND COUNTLINES), 2006-09

Between 2008 and 2009, above-the-line support dropped 5.2% as manufacturers focused theirresources on tackling commodity price inflation

Advertisers have had to be more creative in their above-the-line campaigns due to therestrictions they face, in addition to squeezed marketing budgets

On average between 2006 and 2009, two fifths of Cadburys advertising expenditure was spenton its leading brand, Dairy Milk

Source: Nielsen Media Research/Mintel

Brand Communications and Promotions


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Chocolate confectionery choices

Chocolate confectionery, especially

bars, remain universally popular with

consumers, however, since 2005 their

penetration has continued to fall

Consumption profiles vary for

chocolate consumption, however,

women are more likely to be the main

consumers of any type of chocolate

confectionery

Standard bars of chocolate continue to

be the most popular type of chocolate

for consumers, followed by solid bars

such as Dairy Milk

TYPES OF CHOCOLATE CONFECTIONERY BOUGHT IN THE LAST

TWELVE MONTHS, FEBRUARY 2010

Base: 997 adults aged 15+

Source: BMRB-OMNIBUS, A DIVISION OF TNS-RI/MINTEL


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Repertoire of chocolate confectionery bought

REPERTOIRE OF CHOCOLATE CONFECTIONERY

BOUGHT IN THE LAST TWELVE MONTHS, FEBRUARY

2010

Base: 997 adults aged 15+

Just over a quarter of consumers are eating

four or more types of chocolate

confectionery, with a quarter sticking to just

one type

There are significant differences in profiles

for consumers who just stick to one type,

compared to the more adventurous

consumers who offer manufacturers a key

target for new product launches

The key demographic of those buying just

one type of chocolate confectionery are

men, age 45+ ,C2, retired, no children in the

household and live alone

By contrast, the key demographic of those

buying four or more types of chocolate

confectionery are women, aged 15-54,

families, children in the household and 3 or

more people living together



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Reasons for buying chocolate confectionery

REASONS FOR BUYING CHOCOLATE CONFECTIONERY, FEBRUARY 2010

Base: 866 adults aged 15+ who bought some form of chocolate confectionery in

the last 12 months


Despite the calories and high fat level of chocolate confectionery, consumers (especially women) usechocolate as a way to reward themselves

Chocolate for me a nice treat and I buy it not only for myself, but also for my family. In that case, Ibuy for each person, the chocolate he/she likes. I do not buy chocolates only for this; I buy

chocolates as a present/gifts as well.

- - 25-34 year-old C2DE female

%

Treat for myself 58Treat for my children 37A gift 35For a special occasion (eg Christmas, Easter) 30For cooking/baking 16To satisfy a chocolate craving 15Snack while on the move (eg driving in car, taking the train, walking e tc) 14When I am bored 9For energy boost 9To help me unwind 7Snack between meals/keep me going until my next meal 5Snack after a meal 5Meal replacement 2None of these


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Attitudes towards chocolate confectionery

ATTITUDES TOWARDS CHOCOLATE CONFECTIONERY, FEBRUARY2010

Base: 866 adults aged 15+ who bought some form of chocolate

confectionery in the last 12 months


Two fifths of consumers state

that they prefer branded

chocolates, with just under athird sticking to the same

brand of chocolate bar

Only a tenth of consumers feel

that own-label is just as good

as the branded options

Over-55s are more likely to

prefer branded chocolates,

with 35-54 year olds more

likely to stick to the same

brand of chocolate

confectionery

%

I prefer branded chocolate 41I prefer milk chocolate 35I tend to buy chocolate on impulse (not a planned purchase) 32They are good for sharing with friends/family 31I tend to stick to the same brand of chocolate bars (eg Cadbury) 31

Dark chocolate is healthier 27I have cut back on the amount of chocolate I buy for health reasons 19I like to try new chocolate flavours/formats 12Own label chocolate bars taste as good as branded ones 11I check the cocoa content of chocolate 10I avoid buying chocolate for my children 10I do not believe that dark chocolate has positive health benefits 8I don't trust fairtrade products to give communities money as promised 7Don't know 2

None of these 2


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Your contact

tel: +44 20 7606 4533

email: [email protected]

mintel.com

Senior Consumer Analyst

Vivianne Ihekweazu

Documents

Chocolate Confectionery - UK - April 2010[1]