• Private label chocolate has seen some market success, but not as much as other product categories.
• Despite the increase in spending on the daily basket, sales of private label chocolate versions of major retailers did not show spectacular increases.
MARKS (private-label have grown in popularity in recent years as cost-of-living pressures push consumers toward more economical options.
Once seen as a cheap and lower quality version of established brands, the easily recognizable own brands that can be found in any store are now seen as almost equal in quality to branded products .
However, there are some exceptions to this trend, and one of them is chocolate. Private label chocolate did not register the same level of consumer interest.
A market study carried out by the agency Mintel shows that although private label chocolates have seen significant sales growth in recent years, especially in Europe and particularly in Germany, where they accounted for 29% of the volume of chocolate confectionery sales in 2022, this figure was considered low compared to categories such as sweet biscuits and ice cream.
Why aren't more private label chocolates being bought though?
Major retailers are trying to adapt to cost-of-living issues by launching alternative products to brand names as a strategic response to the economic crisis that is causing consumers to turn to more affordable products.
But the lack of success of private label chocolate varieties has sparked the interest of specialists who have come to the conclusion that this phenomenon could be related to the idea of luxury, of indulgence.
Compared to other categories, sweets in general and chocolate bars in particular have relatively less openness to own brands and this is due to consumer preferences, who will choose the variety of chocolate that seems more lush to them. This consumer behavior affects even established brands that do not have a side-by-side approach "luxury", associated by many shoppers with chocolate.
This explains the fact that, despite the economic difficulties, sales in the premium chocolate segment are growing, consumers opting for a higher quality chocolate treat, even if it means they buy it less often.
The future of chocolate
The price of cocoa beans has risen by about 400% in a year, market data shows. And even if the industry has passed costs on to consumers and demand has weakened, experts say, prices won't fall to 2023 levels. But they won't continue to rise as fast as they have been, either.
Given the economic pressures, chocolate is being pushed further into the category "luxury". As the costs of raw materials such as cocoa and coffee and other ingredients (palm oil) rise and all producers are forced to pay higher amounts not only for ingredients but also to manage stocks to ensure continued availability, it is very likely let's see more price increases in the near future.
The apparent lack of success of private label chocolate does not mean that consumers are not open to consuming it. Some consumers, especially those in Germany, are willing to try this variant under the right circumstances.
The Mintel study also shows that 41% of Germans would choose a private label food product over a branded one if it tasted better. This highlights that while private label chocolate is popular with consumers looking to save, taste remains a crucial factor in their choices.
Article written by Gabriela Dan, Editor of Arta Albă
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