New Zealand chocolate consumers ‘trade up’ for ethics and health: Leatherhead

14-Apr-2013 - Last updated on 15-Apr-2013 at 10:44 GMT

Consumer 'trade up' in chocolate is aiding market growth in New Zealand, says analyst

Consumers in New Zealand are spending more on healthier and ethical chocolate variants - a move that has aided growth in the burgeoning sector, an analyst says.

In the latest confectionery report from Leatherhead Food Research, Jonathan Thomas, primary market analyst, said steady growth in New Zealand’s chocolate market has been driven by a shift in consumer sentiment.

“As is the case elsewhere in the world, consumers in New Zealand are showing an interest in healthier and ethical forms of confectionery, which has also aided growth,” Thomas said in the report.

The confectionery sector totted up an estimated NZ$557m (US$473.45m) in value sales for 2012, up from NZ$494m ($419.9m) in 2008.

Chocolate confectionery represented the largest sector with 58% of overall 2012 sales at NZ$325m ($276.25m).

“The chocolate sector has experienced a rise of 16.1% in value terms since 2008, with people continuing to trade up to more expensive products, such as dark chocolate and Fairtrade, despite the global economic downturn,” Thomas said.

Chocolate also takes the lead in volume share aided by the popularity of block and bite-sized products in particular, he said.

“In recent years, growth has been apparent in sectors such as bite-sized and bagged chocolates, mainly as a result of the suitability of these products for sharing occasions with family and friends.”

Sweet progression

Sugar confectionery is the country’s second largest sector with a 29% market share.

Bagged products account for between 75-80% of sugar confectionery sales, with family-sized the most popular variety and licorice, mints and sugar-free as some of the most popular forms, Thomas detailed.

The chewing gum sector holds a market share of 13%, with sugar-free variants representing the majority of sales.

“This sector has experienced a growth in demand for more novel flavors and concepts, examples of which have included dual-flavored and liquid center gum,” he said.

Retail skew

“Confectionery sales in New Zealand are heavily skewed towards mainstream retail outlets such as grocers and supermarkets, which account for over two-thirds (67%) of the chocolate sector, for example,” the analyst said.

Impulse channels, which account for the remainder of chocolate sales, are particularly important for the chewing gum sector.

Brand breakdown

Mondelez International (formerly Cadbury and Kraft) accounts for half of New Zealand’s block chocolate market – predominantly underpinned by its Cadbury Dairy Milk brand.

The chocolate major also holds 80% of the market for Easter chocolate confectionery, Thomas said, and has been responsible for much of the growth in demand for Fairtrade chocolate in the country.

Mondelez also leads the supply for sugar confectionery with brands such as Trebor and Bassetts.

Nestlé holds second place in terms of market share for New Zealand’s chocolate market at 16% with brands included KitKat, Smarties, Aero and Milkybar.