Mintel US Chocolate Market To Hit 25B In 2019 Lags Behind Europe In Product Innovation

CHICAGO -- U.S. chocolate confectionery sales grew 24% from 2009 to 2014 to reach $21 billion, according to Mintel's "Chocolate Confectionery (U.S.) 2015" report. Meanwhile, chocolate innovation has increased, with new product launches growing 18% between 2013 and 2014. According to Mintel, the U.S. lags in developing new products. Europe reportedly accounted for 51% of all product introductions, followed by Asia Pacific (21%), North America (12%), Latin America (9%) and Middle East/Africa (6%).

While chocolate confectionery remains popular in the U.S., with 85% of adults buying chocolate, an intensifying spotlight on health, rising costs and competing chocolate-flavored offerings across food and drink alternatives strains its hold on consumer affection. Nevertheless, Mintel predicts steady growth through 2019, with the U.S. chocolate market reaching $25 billion.

According to Mintel, some 85% of U.S. consumers buy chocolate. However, the pace of growth slowed in 2014, following a pattern that has emerged over the past few measurement periods, and was up only 3% over 2013.

The global chocolate confectionery market experienced some high points in 2014, especially in Asia. Growth was strong in South Korea, which experienced an increase of 19%; the Indian market grew 18%, China's, 16%, and Vietnam's, 12%.

Mintel director of insight for food and drink Marcia Mogelonsky said the challenges facing the global market in 2014 were related in part to supply, as the price of cocoa increased 9% in the first 10 months of the year, driven up by factors including increased demand, climate change and crop disease.

"Looking toward 2015 and beyond, Asia will lead the way in market growth, while established markets such as North America and Europe will grow at lower rates," said Mogelonsky. Consumers in these markets tend to prefer "favorite" products, and so are less willing to experiment with innovative or novel -- and typically more expensive -- alternatives.

According to Mintel, chocolate confectionery innovation within the U.S. has been focused on seasonal products. Some 42% of new-product launches were classified as seasonal, largely comprised of new takes on familiar products such as different shape or packaging. The research firm said plain/unflavored varieties are seeing steep declines, while products featuring nuts and nut flavors are on the increase. The majority of chocolate buyers (71%) reported preferring options with mix-ins as opposed to plain/unflavored varieties, according to Mintel's report.

Mintel's report suggested that more than half (53%) of U.S. consumers eat chocolate at least once a week. Among chocolate eaters, nearly three quarters (72%) consume the confectionery as a treat. Further, 32% of chocolate buyers say they purchase more chocolate around the holidays, including Easter, to have on hand for personal consumption.

Similarly, one-third of consumers (33%) buy more chocolate around the holidays to give as gifts. In addition to treating themselves, mood enhancement is a popular reason cited by Americans for reaching for chocolate (29%). This rises to 41% when looking at Americans aged 18 to 24.

The research firm noted that the price of sugar was higher in the U.S. in 2014, with domestic growers selling sugar at prices 50% to 100% above global markets. As a result, 71% of respondents said they are noticing price increases in chocolate confectionery. While the category is not considered cost-prohibitive -- and only 3% of consumers have stopped buying chocolate altogether due to price increases -- price awareness is evident in the U.S. market.