The growing trend in the chocolate industry towards premiumisation – good news for SME chocolatiers who focus on smaller volumes of niche products – has driven demand for specialty chocolate stores over the past five years.
Over the past five years, chocolate and confectionery manufacturers have developed more ethical and sustainable production methods in response to shifting consumer demands, and niche products created by smaller firms have grown in popularity.
IBISWorld Senior Industry Analyst, Ms Lauren Magner, commenting on the trends in chocolate manufacturing and retailing, says that the growing trend towards premiumisation – good news for SME chocolatiers who focus on smaller volumes of niche products – has driven demand for specialty chocolate stores over the past five years, as consumers indulge in an affordable luxury or purchase premium chocolate as a gift for special occasions, such as Easter.
IBISWorld anticipates the specialty chocolate stores and chocolate and confectionery manufacturing industries will grow by 4.6% and 2.7% annualised, respectively, in the five years through 2015-16. IBISWorld industry analysts identified revenue of $307.5 million in specialty chocolate stores and $6.2 billion in chocolate and confectionery manufacturing in the current financial year.
The rapid rise of premiumisation as a consumer trend has driven strong growth for the Specialty Chocolate Stores industry over the past five years. New players have entered the industry, and existing enterprises have expanded or franchised – with the unfortunate exception of Darrell Lea Chocolate Shops.
With the industry’s products in high demand, revenue is forecast to grow at a compound annual rate of 4.6% over the five years through 2015-16.
Consumers purchase premium chocolates as an affordable indulgence or as a gift for special occasions. Chocolate industry revenue is expected to grow by 2.8% over 2015-16, bringing revenue to $307.5 million. Sales of premium chocolate, and seasonal or boxed chocolates, have fuelled revenue growth.
Consumer health consciousness has remained strong over the past five years, resulting in some mixed results for the industry. The consumption of large amounts of chocolate is poor for heath, and this has pushed down overall chocolate consumption.
On the other hand, it has also led many consumers to opt for lower volumes of chocolate, with a focus instead on quality. Furthermore, when discretionary incomes decline, consumers often look to premium chocolates as an affordable luxury.
The Chocolate and Confectionery Manufacturing industry has remained resilient over the past five years despite challenging operating conditions.
Increasing health consciousness has required manufacturers to be innovative with their product lines and adapt to shifting consumer demands. In particular, consumers have demanded more ethical and sustainable production methods, resulting in the significant growth of fair trade and organic chocolate products.
Greater demand for industry products from supermarkets and grocery stores along with rising household disposable incomes have underpinned industry growth over the period. Industry revenue is projected to increase at a compound annual rate of 2.7% over the five years through 2015-16. This includes a forecast 1.3% uptick in 2015-16, to reach $6.2 billion.
