SA CHOCOLATE INDUSTRY LANDSCAPE REPORT MARCH 2016
REPORT OVERVIEW The South African Chocolate Landscape Report (79 pages) provides a dynamic synthesis of industry research, examining the local and global chocolate industry from a uniquely holistic perspective, with detailed insights into the entire value chain from production right through to consumption. SOME KEY QUESTIONS THE REPORT WILL HELP YOU TO ANSWER: For the Global Chocolate Section: What are the current market dynamics of the global chocolate industry? What are the global chocolate production and consumption trends? What are the global chocolate industry trends, challenges and reactive strategies? For the South African Chocolate Section: What are the current market dynamics of the SA chocolate industry? Who are the key manufacturing players in the SA chocolate industry? For the South African Chocolate Retail and Pricing Analysis Section: Who are the key retail players in the SA chocolate industry? What are the prices of chocolates at retail outlets i.e. bars, slabs, and assortments? What are the prices of popular chocolate brands across South African supermarkets? In terms of South African Consumer Insights and Trends: What are the statistics regarding the most popular chocolate brands in 2015? What are the chocolate consumer trends and forecasts (2010-2019)? 2
SCREENSHOTS FROM REPORT 79 page report filled with detailed charts, graphs, tables and insights 3
SAMPLE FROM REPORT: GLOBAL CONSUMPTION 7.2 million metric tons of chocolate was consumed globally in 2015, with average year-over-year demand growth since 2008 being steady at just over 3% Forecast Of Leading Chocolate Consuming Countries In 2020 18% One of the primary drivers of this 3% increase is the growing middle class in China, India, and Brazil. While Europe and North America are relatively mature markets, increasing discretionary household income in developing countries is a major factor in stable demand growth. 11% 9% 7% 4% 3% The primary chocolate manufacturing regions Europe and the United States are the main importers of post-processing cocoa products. However, there has been a dramatic increase in the importation of postprocessing cocoa products in China over the last 5 years. Forecast Share of Global Consumption by 2020 Source: http://www.worldcocoafoundation.org 4
SAMPLE FROM REPORT: INDUSTRY OVERVIEW The South African retail chocolate market is valued at R5.03bn (as of 2015) and is predicted to grow over the next five years. This growth is expected to continue despite the increasing costs of chocolate products, due to the rising costs of raw materials. Mondelēz has earmarked South Africa as one of eight markets that will produce 70% of world chocolate confectionery growth in 2016. Chocolate slabs are by far the most popular chocolate choice, holding over 50% share of the market, but the specialty market is growing rapidly. SA consumer interest in locally sourced ingredients is seeing strong growth of domestic premium brands such as Ezulwini Chocolat, Huguenot Fine Chocolates and Honest Chocolate. The retail market is highly consolidated, with Cadbury (a subsidiary of Kraft Foods), Nestlé and Beacon controlling 85% of retail sales. However, small artisan chocolate manufacturers are beginning to enjoy a larger chunk of the market. Leading brands are Cadbury s Dairy Milk, Lunch Bar, PS and Chomp, and Nestlé s Bar One and KitKat. Chocolate is one of those products that is recession proof. The market is still growing at around 10% per year. - Cathal Queally, Brand Manager of Chocolate Direct, a high-end supplier. Source: www.financialmail.co.za ; www.flandersinvestmenttrade.com 5
SAMPLE FROM REPORT: INDEPENDENT CHOCOLATIERS: During 2014, the specialty food industry evolved to meet growing consumer demands for quality and unique products, chocolatiers have taken heed and begun creating specialty chocolates. From dark and vegan chocolates, to spicy and fruity flavors, chocolatiers are finding their niche. Local niche players are in a far more competitive position now, after import duty on raw materials was dropped three years ago. It levelled the playing field, since imported finished products have long enjoyed duty-free status. Kees Beyers "Niche players are eroding big players market shares," says Kees Beyers, Belgian-born owner of Beyers Chocolates, one of SA s biggest independent chocolatiers. South Africa is moving away from mass produced products because there are too many big corporations benefiting from current trends. People also associate small, artisanal products with quality, good service and attention to detail which is certainly true. - Elise Suckerman Source: http://www.financialmail.co.za/ ; https://beyerschocolates.com ; http://www.smesouthafrica.co.za/ 6
SAMPLE FROM REPORT: CHOCOLATE ASSORTMENTS VOLUME TRENDS How many boxes of chocolate assortments have you purchased in the past 4 weeks? (2010-2015) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 34% 32% 29% 34% 32% 29% 29% 29% 30% 29% 29% 30% 38% 40% 41% 38% 40% 41% 2010 2011 2012 2013 2014 2015 3+ 2 1 Year,, 1 2 3+ Total 2010 3,679,000 2,646,000 3,153,000 9,477,000 2011 3,401,000 2,818,000 3,266,000 9,485,000 2012 3,411,000 2,698,000 2,879,000 8,989,000 2013 3,536,000 2,708,000 3,146,000 9,391,000 2014 3,605,000 2,601,000 2,913,000 9,119,000 2015 3,474,000 2,479,000 2,418,000 8,372,000 Between 2010 and 2015, the proportion of purchasers who had personally bought 3+ boxes of Chocolate Assortments in the previous 4 weeks, declined from 34% to 29%. In 2015, 41% (3.5 million) of Chocolate Assortment purchasers had personally bought one box in the past 4 weeks, 30% (2.5 million) had bought two boxes and 29% (2.4 million) had purchased 3 or more. Source: AMPS 2010A-2015A (Adult population 16+ years) Sample Size: 24 408 (2010); 24 427 (2011); 24 615 (2012); 24 824 (2013); 24 994 (2014); 25 078 (2015) Based on weighted numbers 7
TABLE OF CONTENTS 1. Executive Summary (5 pages): 1.1 Global Industry Snapshot 2015 1.2 South African Industry Snapshot 2015 1.3 South African Consumer Trends 1.4 Industry Drivers and Restraints 1.5 Dashboard: South African Chocolate Bar and Slab Consumers 2. Global Chocolate Industry Overview (5 pages): 2.1 Global Industry Overview: Yildiz, Ezaki Glico, Arcor, Lindt and Sprugli, Hershey's, Meiji, Ferrero, Nestlé, Mondelez, Mars. 2.2 Global Cocoa Production 2.3 Global Consumption: United States of America, Russia, United Kingdom, Germany, Brazil, India 2.4 Global Pricing: Cocoa Bean Markets 2.5 Global Value Chain 8
TABLE OF CONTENTS 3. South African Chocolate Industry Overview (24 pages): South African Chocolate Industry Overview 3.1 Industry Overview 3.2 Market Landscape and Dynamics 3.3 SA Channel Distribution: 2015 3.4 Industry Trends 2015 3.5 Key Industry Drivers 3.6 Key Industry Challenges South African Chocolate Manufacturing Overview 3.7 South African Chocolate Manufacturers: Lindt and Sprüngli 3.8 South African Chocolate Manufacturers: Nestlé 3.9 South African Chocolate Manufacturers: Tiger Brands 3.10 South African Chocolate Manufacturers: Mondelēz International 3.11 South African Chocolate Manufacturers: Ferrero 9
TABLE OF CONTENTS 4. South African Chocolate Retail Analysis and Pricing Analysis (14 pages): South African Retail Analysis 4.1 South African Retail Overview 4.2 South African Retail Overview: Woolworths 4.3 South African Retail Overview: Spar 4.4 South African Retail Overview: Independent Chocolatiers South African Chocolate Pricing Analysis (conducted w/c 04 March 2016) 4.5 Chocolate Pricing Analysis: Chocolate Bars at Supermarkets: Lunch Bar, P.S., Bar-One, Kit Kat, Aero, Chomp, Black Cat, Jungle Oats bar, Crunchie, Flake 4.6 Chocolate Pricing Analysis: Chocolate Slabs at Supermarkets: Cadbury, Beacon, Nestle Aero, Nestle Milkybar, Nestle Classic, Nestle Milo, Lindt Lindor, Lindt Excellence, Milka, Cote d Or, Toblerone. 4.7 Chocolate Pricing Analysis: Chocolate Assortments at Supermarkets: Cadbury, Cadbury Dairy Milk Nutties, Beacon, Nestle, Ferrero Rocher, Lindt Lindor, Quality Street, Nestle Passions, Milk Tray, Fav rites. 10
TABLE OF CONTENTS 5. South African Chocolate Consumer Trends (18 pages): 5.1 South African Consumer Trends 5.2 AMPS Survey Methodology and Sample Design 5.3 AMPS Survey Questions Asked 5.4 Chocolate Bars, Slabs and Assortments Consumption Trends: 2010-2015 5.5 Chocolate Slabs Volume Trends: 2010-2015 5.6 Chocolate Assortments Volume Trends: 2010-2015 5.7 Most Popular Chocolate Bar Brand: 2015 5.8 Most Popular Chocolate Slab Brand: 2015 5.9 Most Popular Chocolate Assortment (Box) Brand: 2015 5.10 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Bars 5.11 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Slabs 5.12 Consumer Actual (2010-2015) and Consumer Forecast (2016-2019): Chocolate Assortments 11
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