Category Analysis: Chocolate: Quality Satisfies American Sweet Tooth

Gourmet chocolate is expected to experience delicious growth over the next four years. Indeed, it is expected to become a nearly $1.8 billion market. According to market analysts and manufacturers, consumers are seeking better-quality chocolate at a variety of market levels. Further evidence of this trend is the recent acquisitions of small artisan chocolatiers by large manufacturing powerhouses.

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According to Packaged Facts, gourmet chocolate accounts for roughly 10 percent of overall chocolate sales and is growing faster than the chocolate market. Based on available market information, Packaged Facts estimates that total gourmet chocolate sales reached $1.3 billion in 2005, and projects that they will reach $1.8 billion in 2010, illustrating growth of 6.4 percent between 2005 and 2010.

Information Resources Inc.-tracked retail sales of gourmet chocolate stood at $310.8 million in 2005, a strong 20.2-percent growth over 2004. During the period from 2001 to 2005, the market experienced a compound annual growth rate of 10.5 percent. In comparison, overall chocolate candy sales grew by a compound annual growth rate of 1.8 percent during the same period. The National Confectioners Association estimates total retail chocolate sales at $15.7 billion for 2005 — that's 3.5 billion pounds of chocolate, an increase of 2.6 percent over the previous year. Halloween and Christmas were the big holiday winners in 2005 for confectionery sales with increases of 2.3 and 2.4 percent, respectively. NCA estimates seasonal sales will increase 2.3 percent overall for 2006.

One of the major reasons contributing to the growth of gourmet chocolates is expansion of the distribution reach to mass-market channels. Gourmet chocolates once found only in specialty stores, boutiques and high-end department stores, are now widely sold in food, drug, and mass (FDM) channels.

Researchers consider gourmet chocolate, by definition, different from normal chocolate varieties mainly due to their ingredients and the production process. Normally, the chocolate categories are categorized based on the cocoa origin, level of cocoa content, the craftsmanship involved in chocolate making and the type of packaging.

The lure of higher margins provided by gourmet chocolate has attracted the interest of large chocolate manufacturers, many of whom have introduced their own successful premium brands and/or acquired smaller, well-known gourmet manufacturers in the past few years. While the majority of gourmet chocolatiers are still small businesses, many of them European, the influence of the corporate chocolate giants has been instrumental in introducing gourmet chocolates into mass market channels.

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