Chocolate candy registered $4.3 billion in sales in 2009

Despite the gloom of the recession that enveloped the nation last year, with its impact still being felt, U.S. consumers have not given up on chocolate even as they cut back on other frills and took steps to curtail spending in virtually every way possible.

"Chocolate kept selling through the recession; people kept buying chocolate and eating chocolate," said Marcia Mogelonsky, senior food and drink analyst at the market research company Mintel. "Chocolate is an affordable little indulgence for many people to enjoy, even when they have to give up other things. For many people, it's a nice tradeoff. Skip dessert and have a nice piece of chocolate when you get home."

The "affordable indulgence" factor apparently was an important driver of chocolate sales in 2009, which generally were up in convenience stores, supermarkets and specialty food stores, although in unit sales generally declined.

According to The Nielsen Co., chocolate bar dollar sales of almost $4.6 billion in the convenience channel represented a 5 percent jump over 2008, but unit sales were off by the same amount. (Convenience Store News is a subsidiary of The Nielsen Co.)

"The major factor in convenience stores has been that in-store sales have lost ground because people stopping for gas are simply not going inside the store to buy snacks or lunch," Mogelonsky pointed out. "People are trying to save money. Many people are not stopping on the way to work because they are not going to work, or if they are, they bring food from home."

But for many people, depriving themselves of that convenience store candy bar or extra cup of coffee generates a sudden urge to spend money on something little, but extra good, like a fancy chocolate when they buy groceries or are pass by a gourmet chocolate shop at the mall, she said.

In the food, drug, mass merchandising channels, including Walmart, Nielsen reported 2009 chocolate candy sales of $4.3 billion, a 3.6-percent increase, on top of a 4.7-percent jump the previous year. However, unit sales were off by 7 percent. Chocolate miniature sales of about $1.1 billion were up 8.7 percent, following a 1.2-percent boost in 2008, while unit sales dropped 3 percent. Dietetic chocolate sales of $172 million climbed 3.6 percent compared to a slight 0.4-percent increase in the prior year. Unit sales were up, but only by 0.2 percent.

Those higher sales numbers compared to lower unit numbers represent price increases taken by some major manufacturers over the year, but they may also indicate increased interest by consumers in higher-priced premium brands -- the "affordable indulgence" factor.

Last December, Mintel reported chocolate sales worldwide rose dramatically -- by 18 percent and 12 percent, respectively, in China and the Ukraine, for example. Each country has seen steady sales growth since 2005, and Mintel predicts continued growth through 2013. In Britain, the chocolate market produced 5.9 percent growth, with 3.2 percent in Belgium, a country that claims to produce some of the world's best chocolates, showing a sales increase of 3.2 percent. Overall U.S. chocolate sales increased 2.6 percent over 2008, Mintel reported.

"It's clear that despite economic trouble this year, the world's chocolate lovers didn't deviate from their favorite treat," said Mogelonsky. "Even in countries not known for chocolate consumption, sales are on the rise."

Manufacturers say many consumers are also growing more interested in organic and fair trade products, especially on the West Coast, where consumers frequently ask questions about those items as well as about the health benefits of chocolate. That trend is expected to grow in other areas of the country as well. Chocolate, particularly the dark varieties, is loaded with flavanols, which help to lower blood pressure, promote healthy blood flow and balance certain hormones in the body.

What's Next?

The National Confectioners Association's (NCA) 2009 Confectionery Industry Trend report predicts chocolate will emerge as one of the largest growth drivers for the confections industry "in new, delicious and exciting ways."

According to the report:
-- Chocolate and cocoa will pop up more frequently as a key ingredient in main courses alongside salmon, chicken and steak, according to 73 percent of experts surveyed.

-- Flavor infusions that combine chocolate and spices, salts, herbs and floral flavors will become increasingly popular as consumers embrace pairings, according to 43 percent of insiders.

-- Sweet and savory chocolate duos, like chocolate and bacon, and even chocolate and cheese combos, will be popular in stores and on menus. In fact, 78 percent of experts said chocolate and these sweet and savory duos will provide the most surprising flavor combinations.

-- Chocolate will drive the organic market, according to 70 percent of experts surveyed.

-- More than one-third of experts said consumers will become more knowledgeable about the global origin of the chocolate they enjoy.

Experts also forecast that the potential health benefits of chocolate will continue to be evidenced. Nearly half of those surveyed said consumers can expect to see more research into the potential health benefits of milk and dark chocolate, including exploration of naturally occurring cocoa compounds and positive effects on mood and blood pressure levels.

In addition, one in three industry experts said U.S. trends will have the greatest impact on the dark chocolate market globally.

The report predicted limited-edition candies will prevail. Thirty-five percent of experts said experimentation with new flavors of classic favorites will be a leading trend within limited edition candies, such as introducing dark chocolate versions of classic milk chocolate candies and experimenting with flavor fillings.

Some of these trends are evident in new products and line extensions recently introduced in the retail marketplace.

For example, Cape Code Provisions LLC converted six products to an all-natural recipe. In its Harvest Sweets brand, milk and dark chocolate covered cherries and blueberries are now all natural. In the Cape Cod Cranberry Candy brand, dried cranberries are now coated with all natural milk and dark chocolates.

Decadent tastes LLC, Ferndale, Wash., announced that its L'ESTASI DOLCE Sweet Ecstasy brand of Asian-Fusion confections and gourmet wine truffles recently received top ratings from Tastesgrader.com, an online guide for consumers. Cited by the rating service were the company's Lemongrass Ginger Truffles, Mint Ginger Truffles and the Cabernet Truffle.

Last June, Nestle launched its new Kit Kat, Aero, and Coffee Crisp bars, all of which use dark chocolate "to attract a mature, health-conscious new audience." The products contain 70 percent cocoa content, "successfully elevating Nestle's presence as a provider of quality dark chocolate," according to the company's promotional materials. Since the launch, shipment sales have increased 45 percent, with consumption sales up 14 percent compared to the previous year.