• The chocolate market, as a result of the difficult economic situation worldwide, is declining.
According to the latest data provided to Reuters by major chocolate companies, consumers in both Europe and the United States have started to cut their chocolate budgets as prices rise.
U.S. retail chocolate sales have fallen 2 percent to 3 percent in recent months as prices have risen by double digits, Hershey Co. Vice President Melissa Poole said recently. The data recorded by Hershey is similar to that recorded by the rest of the manufacturers.
"We expect to see a decrease in sales volume as we move into the year," said Melissa Poole, arguing that until the recent decline "consumers have not reduced their consumption at all'.
In the latter part of the pandemic, chocolate sales, especially in the US, saw spectacular increases, as did other consumer products, as buyers began to buy in bulk. This consumer habit has changed, now individual chocolate bars are preferred.
According to analysts from the American market research company IRI, the volume of chocolate products sold in the US fell by 1,5% in the 13 weeks analyzed, ending on June 12, while prices rose by 8,2%.
"Chocolate is becoming a more price-sensitive item"
Daniel Sadler, IRI analyst, states: "We will see chocolate become a more price sensitive item. Consumers will continue to indulge in a small reward, but it will be a smaller one. That's why we see a decrease in sales volume."
For the UK, consulting firm McKinsey says that 40% of Britons migrated to cheaper products in both snacks and sweets in the four to six weeks under review, ending in mid-May.
Cheaper chocolate has a lower cocoa content, which also means a decrease in demand for cocoa. Traders say Russia's invasion of Ukraine has also affected cocoa demand, as the two account for 5 percent of global cocoa demand. At the same time, big names of chocolate manufacturers, such as Lindt and Nestle, have withdrawn or reduced their sales from the Russian market.
Melissa Poole said that in some cases Hershey has reduced assortment sizes to keep the price the same, a so-called strategy "shrinkflation". The same strategy was applied by the Mondelez Group, which produces the Cadbury and Milka chocolate brands, which in turn decides "to reduce the weight of certain products," according to spokeswoman Tracey Noe.
Traders and experts say that while chocolate makers have so far expected demand for cocoa to grow by around 2,5% this year, growth will be just 1%, followed by stagnation next year if inflation persists and the war from Ukraine will continue.
Article source: agrofood.ro
Article written by Gabriela Dan, Editor of Arta Albă
Read on White Art and: Holographic chocolate – wrapped in the colors of the rainbow
