Valentine’s is traditionally a day of love and romance, though cynics would call it a money-spinning dream for the producers of flowers and chocolates. Whatever the reasons, chocolate is big business.
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The latest research from market analysts Datamonitor shows just how much is spent globally on boxed and novelty chocolate, for Valentine’s and otherwise. Boxed chocs have always been popular, but novelty chocolates such as body paint or chocolate greeting cards, are getting increasingly popular due to their improved quality.
From Russia with love…
Perhaps we should all take a lesson in love from the Russians, who scoffed a massive 303 million kilograms of boxed chocolates in 2001. That is more than any other country in the world and twice the volume of the US, which consumed 151 million kilograms of boxed chocolates in the same year.
The Russians celebrate Women’s Day on 8 March and all Russian women are given presents, flowers, chocolates and cards. Some do call it the “Russian Valentine’s Day”, despite the fact that being ‘in love’ is not obligatory. However, Valentine’s Day is also becoming more and more popular in Russia as western influences creep in.
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By GlobalDataHowever, the Russians are obviously traditionalists. The more contemporary Valentine’s mainstay of novelty confectionery is yet to penetrate the less sophisticated Russian market to any degree.
In 2001, the novelty chocolate sector in Russia generated a value of just US$1.7m, compared to the $1.4bn that the leading boxed chocolate sector produced with its share of over 90% of the total Russian confectionery market.
Latin American passion
In Brazil they celebrate ‘Lovers Day’ on 12 June, the eve of Saint Anthony’s Day. Saint Anthony, the patriot saint of lovers, is believed to bless people with good marriages and couples celebrate their love in much the same way as the Brits do on Valentine’s.
In warmer climes, a rose may seem a more appropriate token. However they seem to like it warm and sticky in Brazil, a major producer of cocoa. Brazil ranks fifth as a world producer of cocoa and it in fact comes second to Russia in volume sales of boxed chocolates. In 2001, boxed chocolates made up over 50% of Brazil’s chocolate confectionery sales by volume – with a total of 168 million kilograms.
The Brazilian consumer shows a preference for high quality and high price items, with a distinct penchant for larger chocolate bars or boxes with greater weight.
Money can’t buy you love – Brits paying more for boxed choc
Unsurprisingly, the US dominates the global chocolate confectionery market as a whole, with a value of $13bn in 2001. This chocolaty ascendancy filters through to the market sectors, with Americans spending $2.4bn on boxed chocolates and $1.6bn on novelty chocolates in 2001, more than any other country in the world. However, the US chocolate market has not yet matured, leaving room for continued growth. The boxed chocolate market is expected to grow steadily, reaching a value of $2.7bn by 2007, representing a compound annual growth rate of 2%.
Although the price of boxed chocolates has increased in the US over the 1996-2001 period, the increase has not been as great as in the UK, where consumers are still eating around the same amount of boxed chocolates each year, but paying increasingly higher prices for them.
…The Brits love novelty chocs
In the UK, per capita expenditure on boxed chocolates reached $22.2 in 2001 – two and a half times more than the average American consumer spends. In fact, the UK consumer spends more on boxed chocolates than anyone else in the world. UK expenditure on boxed chocolates is high because of the increased price per unit. Consumption is in fact lower than for most other types of chocolate in the UK market, with only novelty chocolates having a smaller consumption rate.
The UK really is a nation of chocoholics, with the largest chocolate consumption rate in Europe and a 30% share of the total European market in 2001. Even in the novelty sector, the smallest in the UK chocolate confectionery market, expenditure and consumption rates are higher than anywhere else in the world.
Making love pay off
Boxed chocolates are the traditional way to go and most chocolate lovers do prefer products with a familiar brand name. Manufacturers in this sector should focus on gourmet boxed chocolates and specialty dark chocolates as well as looking to opportunities in niche markets such as organic, diet and diabetic chocolates, especially as growth in consumption has slowed in recent years, due to chocolate’s high fat and calorie content.
“Novelties are produced for Easter and Christmas as well as Valentine’s Day and as such, sales in this sector fluctuate widely depending on the time of year. The growing novelty chocolate sector is a bit more ‘now’ and it will provide the boxed chocolate market with its greatest competition. Chocolate body paint and edible undies aren’t the only way to go. The novelty sector is also becoming increasingly gourmet in its offerings, so those looking to melt her heart and save money this year could do worse than buying a luxury chocolate Valentine’s card,” comments Joanne Birtwistle, Datamonitor consumer analyst.
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