The War on Chocolate

January 29th, 2009 | Sources: NY Times

Subjects:

Some things people will not give up no matter how bad it gets out there, and chocolate is one of them.

But times have been far from rosy in the industry ever since large chocolate producers started dipping  into the premium market and putting the squeeze on niche players.

Last year, chocolate sales in supermarkets, pharmacies and convenience stores totaled $4.99 billion, an increase of 2.2%. 

That’s healthy growth during an economic crisis and newly released premium products by the big dogs, Hershey and Barry Callebaut are largely responsible for driving those numbers, according to the Wall Street Journal.

Even Mars entered the fray, and the world will never be the same thanks to mint chocolate and raspberry almond M&Ms.

Still, when all things economic started getting really nasty in Q4 2008, “growth in the premium chocolate segment slowed,” according to Josiane Kremer, a spokesperson for Barry Callebaut.

So the little guys’ livelihood is threatened, the big dogs’ investors are howling about timing and the resulting competition could scare the clothes off Lady Godiva.

There are consumers who prefer to stick with known brands like Hershey’s but others “want to support small and local producers and that’s where their loyalties are going to lie,” said Krista Faron a senior analyst at Mintel.

And there are consumers who, if chocolate were wine would happily drink Thunderbird. They could care less about cocoa sourcing and the relation between confectionary production methods and product finish.

Or, as Faron summarized, “chocolate may very well be recession-proof — it’s just a matter of how much consumers want to pay for it.”


 

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