The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Chocolate still remains as one of the most exciting consumer goods in the world. While many products become stale and settle into a pattern of steady growth, chocolate continues to innovate. In the Western markets, dark tablets filled with nuts, and flavours such as salted caramel, chilli, and fruits are becoming popular. In Asia, the Middle East and Africa, milk forms the bulk of sales, in part to improve heat resistance.
This is an exciting time for the chocolate confectionery market, but only as a result of the difficulties it faces – the perpetual slowdown in the West is now being imitated in some markets such as China. Companies are slowly dealing with the challenges they face, but can expect a low growth environment for some time to come. There is also a greater competition from new snacks and the growth of being consumer conscious. These both will provide an existential threat to chocolate in the West.
The negative health connotations of chocolate will continue to undermine sales in Western Europe and North America. There are a wealth of new snacks such as energy bars, nuts and meat snacks, which have managed to attract audiences looking for healthy alternatives to confectionery. These products are here to stay and will make it difficult for chocolate to grow, unless it can tap into local health trends. There is also a far broader umbrella of what can be considered snacks. Not only are products such as snack bars and meat snacks rising in prominence, but products that have not traditionally been associated with snacking – such as cereals and yoghurt products – are now being transformed into products which can be consumed on the go.
Another threat is that this market will continue to have a limited audience in the Middle East and Asia. Relative to other snacks, chocolate is beyond the price range of many in markets such as India, China and the Middle East and this will not change any time soon. Chocolate in China is mostly popular with middle and upper class audiences because of a standard bar of chocolate roughly equates to 19 minutes of work with the average worker’s hourly wage. Players with a small presence will need to target second- and third-tier cities, where newly-formed middle classes have developed, in order to gain market share. Manufacturers will also need to counteract this problem by setting up local manufacturing facilities and lowering unit price of their products.
Overall, sales of chocolate are still predominantly from Western markets, particularly Western Europe and North America. Euromonitor’s forecast model indicates that rises in average GDP per capita is likely to be a major contributor in China, Mexico, Indonesia, Turkey and India. They are expected to be some of the fastest volume growth markets in chocolate over the next five years. Given the relative lack of affordability of chocolate in many of these markets, the product’s volume growth is likely to come from new and emerging middle-class groups.