Confectionery - chocolate 2024: choc volumes dive as prices soar

It’s been a record-breaking year for chocolate – but not in a good way. Delivering the greatest absolute value gain in this report, its £532.7m growth is chiefly down to price rises. Grocers have sold 14.1 million fewer kilos and nine of the top 10 brands have lost volumes.

There’s nothing unusual about lost volumes in grocery, of course. Sixty-seven of the 127 markets across Top Products 2024 have suffered the same fate. But what stands out is the rate at which chocolate prices have risen. In a market where inflation has passed its peak, chocolate is a major outlier. An average kilo is 13.5% more expensive than 12 months ago, and there’s no sign it will come down any time soon, with cocoa bean commodity futures soaring to an all-time high of $12,000/tonne in April.

That’s had an impact on shopper and consumer demand, admits Lauren George, Mars Wrigley external communications manager. “Some shoppers have switched spend from chocolate to other packaged snacking categories this year, particularly biscuits and savoury snacks, although this trend is starting to soften.”

Still, that doesn’t mean the UK’s giving up chocolate. It still has more than 98% household penetration, George points out, making it one of the most widely consumed products.

In such a cost-conscious environment perhaps the biggest surprise is the performance of premium products. The most expensive top 30 brands, in terms of price per kilo, have all grown volume share in the past year.

Dutch ethical brand Tony’s Chocolonely, which is the sixth costliest, has achieved the strongest absolute volume gain of the year. It’s shifted an extra 768 thousand kilos. That’s a rise of 40.5% – which has helped push the brand’s value sales up 46.6%.

“Consumers are seeking out more ethical and more delicious chocolate and realising they can have both with Tony’s,” says UK manager Ben Greensmith.

Tony’s has won greater distribution across “all customers” in the past year, he adds. “Distribution in major grocers is up 20% year on year, driven by gains across all ranges. We’ve also launched a smaller 35g bar format, which is in strong growth and helping to unlock convenience, foodservice and contract catering accounts.”

More proof of premiumisation can be seen in the performance of Lindt, the priciest top 30 brand. Its value has grown 18.4% on volumes up 2.3%. That’s thanks in part to TV ads and the launches of Choco Wafer and Gold Bunny Salted Caramel, says brand owner Lindt & Sprüngli.

While posher chocs are in demand, there’s still clearly a limit to how much Brits will pay for a bar. It’s worth noting that the five top 30 brands that have kept the tightest lid on price rises – Tony’s, Reese’s, Mars, Snickers and Cadbury Creme Egg – are all in volume growth.

Promotions are also playing a key role in driving sales, says George. “It’s fair to say that promotions play an important role, particularly at a time when consumers are struggling financially.

“We always want to ensure we are delivering for our shoppers and, therefore, we have looked to balance promotions across everyday low-price mechanics to medium-low price mechanics. This has meant that we can ensure a range of options are available for shoppers across standard and trade-up pack formats,” she adds.

In-store marketing has also been crucial to brand performance, says a Lindt & Sprüngli spokeswoman. “To support current and future growth, executing outstanding premium visibility in store is key.” She points to the Lindor pick-n-mix bays launched in Sainsbury’s in 2019.

“In addition to this, we have landed gifting bays for Lindt in Sainsbury’s, Lindor bays and Lindor and Ferrero card bays in Tesco, Lindt box bays in Waitrose, and we are conducting additional trials with Asda and Morrisons.”

Initiatives like this have become more important since the ban on displaying chocolate and other HFSS products in impulse fixtures came into effect in October 2022 for larger stores.

Cadbury Dairy Milk, which turned 200 this year, has also been doing its best to stand out in stores. “As part of the birthday celebrations, we launched a series of iconic products in different collectable designs,” says Susan Nash, trade communications manager for owner Mondelez. “Our 180g Cadbury Dairy Milk Bars [featured] packaging from across the years, starting as far back as 1915 and running right up to the present day.”

The supplier also “launched the limited-edition 360g Cadbury Dairy Milk Bar, which joined the striking and nostalgic collectable 180g bars with a unique and attention-grabbing vintage-style design”, she adds.

These initiatives have driven double-digit value and volume growth for Dairy Milk tablets, says Nash, helping the overall brand grow 10% in value. The March launch of Dairy Milk & More – in Nutty Praline Crisp and Caramel Nut Crunch – and a Cadbury Creme Egg tablet have also paid off.

“Cadbury Creme Egg tablet sold a bumper 4.6 million units nationwide, making it the number one NPD for the entire Easter 2024 season,” Nash adds.

That, along with the launch of a white chocolate Creme Egg, helped the brand shift an extra 718 thousand kilos. That makes Creme Egg the second-biggest contributor to category unit growth.

Festive launches are key

Another Easter-centric line has delivered the goods for Cadbury. Mini Eggs has registered chocolate’s third-biggest absolute volume gain of 533 thousand kilos. Nash puts this down to strong sales of the brand’s 110g and 360g sharing bags – respectively the top and third-top sharing novelties last Easter.

That performance highlights how festive events such as Easter and Christmas are of growing importance for chocolate brands. Tony’s, for instance, launched Chunky Easter Egg for this year’s festivities. This Christmas, it’s unveiled Small Countdown Calendar containing mini bars of its salted caramel and milk chocolate variants.

Tablets and sharing bags are another focus for brands. This is down to the ongoing rise of at-home chocolate consumption, suggests Nash. “The evening occasion is the key time of day for sharing, with tablets and bags being the most convenient and popular format,” she says. “Other areas of the market that we’ve seen growth in are our duos formats.”

Looks like bigger packs could be the way out of chocolate’s malaise.

Read more: Confectionery - chocolate 2023: Choc treats are out, but gifting is in