Analyst Insight by Pinar Hosafci - Food Analyst
Nestlé might not be the first brand you turn to when you’re on the hunt for fine chocolate – it certainly isn’t for me – but, as the appetite for luxury grows, this may no longer be the case. More and more manufacturers (and retailers) are jumping on the single-origin label, which promises profitability as well as meeting consumer demand for more value-added and responsible products. As the world’s largest packaged food player, Nestlé is predictably en route to taking this request on board. The company recently announced plans for its new chocolate moulding and packing line in Ecuador, which will use the country’s award-winning Arriba cocoa beans to make value-added chocolates for export and domestic consumption. A bold venture, one may argue, given that the company does not have any premium brands to go with fine chocolate, but single-origin could well be the answer to Nestlé’s long overdue premiumisation conundrum.
Serving Today’s Luxury Seekers
A growing number of consumers seek more than just a product – something that offers “one minute of pure delight” or their “daily luxury”, as Barry Callebaut puts it. This trend is driving the demand for premium chocolate. Chocolate unit prices are rising globally, a trend that is expected to continue well into the next five years. Premium chocolate is growing very fast in the US, where negative volume growth is being outstripped by positive constant value growth in chocolate confectionery as a whole, as well as Brazil, which is expected to be the largest contributor to global chocolate confectionery value growth during 2014-2019. With its recent acquisition of Russell Stover, Lindt is setting the stakes higher still, betting on the sustained triumph of high-end chocolate in the US, the world’s largest confectionery market.