The chocolate challenge – and solution – in hot climate markets The growth in chocolate consumption is, by far, highest within hot climate zones and the chocolate markets in countries OLNH%UDLODUHFXUUHQWO\HSHULHQFLQJ double-digit growth. To see what the status and potential in these hot climate markets look like, Insight asked market intelligence agency Mintel for a comment. 6 Brazil: 49 percent of consumers buy chocolate as an everyday treat Mintel estimates that the retail revenues of the Brazilian chocolate confectionery market reached approximately USD 3 billion in 2016. Penetration of chocolate consumption in Brazil is high, with 91 percent of consumers eating chocolate of some kind, signalling that this is a relatively mature market. Brands need to go further to keep consumers engaged through product development, a focus on product quality, DQGHIIRUWVWRNHHSWKHPIURPÀHHLQJWKHFDWHJRU\GXHWR health concerns or high prices. Brands are encouraged to push ‘me time’ occasions, as chocolate eaters often put personal pleasures gained from eating chocolate above health concerns, and they like to treat themselves with chocolate. Preserving the integrity of chocolate in warm temperatures Chocolate confectionery is stored and consumed at “room temperature” as opposed to being refrigerated for storage and chilled before consumption. Indeed, chocolate experts suggest that the confectionery should be stored at 18–20° C (65–68° F). These refrigerated conditions are not possible to be kept for the everyday consumption by the consumers. The issue of keeping chocolate’s integrity in hot weather has been the subject of considerable research, and the “melt factor” has led manufacturers to offer a number of solutions, primarily by experimenting with changing the formulation of the product. AAK’s breakthrough innovation TROPICAO™ There is always a risk that re-formulations potentially could change consumer experiences. In order to maintain the sensory attributes of a chocolate product, while at the same time avoiding heat-related bloom, AAK launched its revolutionary chocolate solution TROPICAO™ at the end of 2015. Measured in volume consumption, countries like Germany, the UK, the US and Russia is today’s biggest markets for chocolate and confectionery products. But when it comes to annual growth rate the key opportunities are found in countries such as China, India, Turkey and Brazil. These hot cli- PDWHRQHVRIIHUVLJQL¿FDQWSRWHQWLDOLQWKHJOREDOFKRFRODWH confectionery market with established volume consumption DQGUHODWLYHO\VWURQJYDOXHJURZWKRYHUWKHQHW¿YH\HDUV The growth in these countries is largely due to an increased demand of premium varieties which, in turn, is partly due to increasing disposable incomes that enable people to buy more luxury products such as chocolate. Despite the relatively low consumption rates, these mar- NHWVRIIHUVLJQL¿FDQWJURZWKSRWHQWLDOLI±DQGWKLVLVFUXFLDO± manufacturers are able to overcome the challenges that are offered by warm temperatures. Chocolate confectionery, global market performance Note: The size of each bubble represents the respective size of the market in volume. Source: Mintel. Volume Consumption Per Capita (Population), Kg Russia Turkey China India Compound Annual Growth Rate Brazil $YHUDJHYDOXHJURZWKRYHUSDVW¿YH\HDUV UK Germany Spain US France Mexico 0.0 5.0 10.0 15.0 20.0 25.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 C
AAK Insight no 4 2017
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