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SELLING CHOCOLATE
OPPORTUNITIES AND CHALLENGES FOR FOOD
MANUFACTURERS
FRANCISCO REDRUELLO
SENIOR FOOD ANALYST
21 NOVEMBER 2012
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDY: US
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
4
Living In Uncertain Times ECONOMIC UNCERTAINTY
Source: IMF World Economic Outlook. July 2012
+5.2%
+3.8%
+3.3%
2010 2011 *2012
*GDP Growth in 2012 and 2013 is forecasted
+3.6%
*2013
© Euromonitor International
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Not Only In Developed Economies…ECONOMIC UNCERTAINTY
Eurozone Sentiment Dampened by Debt
Worries
US Unemployment above 8%
Domestic Demand in China Weakens
Economy in Brazil and Argentina Cools Down
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDY: US
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
7
-1
0
1
2
3
4
5
6
2007-08 2008-09 2009-10 2010-11 2011-12
Percentage Growth (%)
Chocolate Confectionery. Global Retail Value Growth (%)
Real GDP Growth Chocolate Confectionery*
Chocolate Growth Accelerates In 2012A SNAPSHOT ON CHOCOLATE
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%). 2012 is partially estimated
© Euromonitor International
8
Asia Pacific12%
Australasia3%
Eastern Europe15%
Latin America11%
Middle East and Africa
4%
North America20%
Western Europe35%
Chocolate Confectionery. Retail Value Sales Breakdown by Region. 2012
1.4
10.3
0.9
4.71.8
1.1
4.3
2011-12 Retail Value Growth (%)*
Emerging Markets Lead Growth A SNAPSHOT ON CHOCOLATE
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
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Boxed Assortments And Seasonal Chocolate Stand Out A SNAPSHOT ON CHOCOLATE
Alfajores0% Bagged
Selflines/Softlines15%
Boxed Assortments
20%
Chocolate with Toys3%
Countlines26%
Seasonal Chocolate10%
Tablets25%
Other 1%
Chocolate Confectionery. Retail Value Sales Breakdown by Category. 2012
10.12.2
2.6
1.6
2.8
3.1
32011-12 Retail
Value Growth (%)*
-0.5
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
10
0
5,000
10,000
15,000
20,000
25,000
Chocolate Confectionery. Retail Value Sales. (Top Ten Markets) US$ million. 2012
1.9
3.5
Hot Market Opportunities In Brazil And China A SNAPSHOT ON CHOCOLATE
0.9-1.9
14.7 2.30.7
-0.8 1.40.3 8.6
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
11
Supermarkets24%
Hypermarkets14%
Discounters10%
Small Grocery Retailers26%
Other Grocery Retailers
5%
Confectionery specialists
11%
Non-Grocery Retailers
8%
Non-Store Retailing
2%
Chocolate Confectionery. Distribution Breakdown (%). Global Retail Value. 2012
0.5
0.9
0.1-0.6
-0.5
Size Matters… For Chocolate At Least A SNAPSHOT ON CHOCOLATE
-0.5
0.4
2007-12 Percentage Share Point Growth
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
13
0 750 1,500 2,250
Bagged Selflines/Softlines
Boxed Assortments
Chocolate with Toys
Countlines
Seasonal Chocolate
Tablets
Other ChocolateConfectionery
Chocolate Confectionery in Brazil . Retail Value Sales. US$ Million. 2012
18.1
11.1
13.5
12.4
15.4
�Chocolate benefits from improvement in purchasing power
�Innovation underpins growth of Boxed Assortments
�Filled formats spur demand in tablets
Case Study: Chocolate Confectionery In Brazil CASE STUDIES: BRAZIL AND CHINA
2.7
10.9
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
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Distribution And Premiumisation Are Key For Success CASE STUDIES: BRAZIL AND CHINA
Hershey benefits from Joint Venture with Pandurata Alimentos
Sonho Valsa
Kraft Foods Brasil
11
11.5
12
Percentage Share (%)
Hershey Co. Retail Value Share (%) in Brazil. Tablets
2010 2012
32
33
34Percentage Share (%)
Kraft Foods Brasil. Retail Value Share (%) in Brazil. Chocolate
Confectionery
2010 2012
© Euromonitor International
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0 200 400 600 800
Bagged Selflines/Softlines
Boxed Assortments
Countlines
Tablets
Chocolate Confectionery in China. Retail Value Sales. US$ Million. 2012
5
13.9
10
�Countlines benefit from new launches
�Premium chocolate specialists drive growth of Boxed Assortments
�Bagged Selflines bank on ‘affordable snacking ‘trend
Case Study: Chocolate Confectionery In China CASE STUDIES: BRAZIL AND CHINA
6.9
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
16
Crispy Shark Wafer
Nestlé China
Ferrero Rocher
Ferrero China Ltd
Luxury And Positioning Drive Demand In ChinaCASE STUDIES: BRAZIL AND CHINA
16
18
20
22Percentage Share (%)
Ferrero Rocher Group. Retail Value Share (%) in China. Boxed
Assortments
2010 2012
65
70
75
Percentage Share (%)
Nestlé SA. Retail Value Share (%) in China. Countlines
2010 2012
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDY: US
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
18
0 2,500 5,000 7,500 10,000
Bagged Selflines/Softlines
Boxed Assortments
Countlines
Seasonal Chocolate
Tablets
Chocolate Confectionery in US . Retail Value Sales. US$ Million. 2012
3.9
3.5
-0.4
�Countlines tap into ‘indulgence on the go’
�Sport events underpin positive growth for Bagged Selflines/ Softlines
Case Study: Chocolate Confectionery In US CASE STUDIES: US
-0.4
0.7
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
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Convenience, Price…And Mrs BrownCASE STUDIES: US
Snickers
‘2-to-Go’
Mars Inc
‘Mrs Brown’
Mars Inc
15
20
25
Percentage Share (%)
‘Snickers’. Retail Value Share (%) in US. Countlines
2010 2012
49.5
50
50.5
Percentage Share (%)
‘M&M’. Retail Bagged Selflines/Softlines
2010 2012
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDY: US
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
21
0 200 400 600
Bagged Selflines/Softlines
Boxed Assortments
Chocolate with Toys
Countlines
Seasonal Chocolate
Tablets
Other ChocolateConfectionery
Chocolate Confectionery in Spain . Retail Value Sales. US$ Million. 2012
-0.9
-2.9
-0.6
-1.1
4
�Chocolate snacking benefits from longer working-hours
�Low retail unit prices underpin growth of Bagged Selflines/ Softlines and Countlines
Case Study: Chocolate Confectionery In Spain CASE STUDIES: SPAIN
-1.1
0.7
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
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‘Dare To Show Your Soft Side’CASE STUDIES: SPAIN
Milka
‘Dare To Show Your Soft Side’
Kraft Foods España
‘Kit Kat Mini’
Nestle SA
8.4
8.6
8.8
Percentage Share (%)
‘Milka’. Retail Value Share (%) in Spain. Tablets
2010 2012
29
29.5
30Percentage Share (%)
‘Kit Kat’. Retail Value Share (%) in Spain. Countlines
2010 2012
© Euromonitor International
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0 1,000 2,000 3,000
Bagged Selflines/Softlines
Boxed Assortments
Chocolate with Toys
Countlines
Seasonal Chocolate
Tablets
Other ChocolateConfectionery
Chocolate Confectionery in UK . Retail Value Sales. US$ Million. 2012
-0.8
3.4
�Low-priced chocolate snacks benefit from major celebrations in 2012
�Bag-sharing snacking thrives during sports events, national celebrations
Case Study: Chocolate Confectionery In UK CASE STUDIES: UK
4
2.2
4.5
-5.2
14.7
2011-12 Retail Value Growth (%)*
* Constant 2012 Prices Fixed 2012 Exchange Rates. Year-on-Year Growth (%)
© Euromonitor International
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All You Need Is Sharing…CASE STUDIES: UK
Green & Black’s
‘Tasting Collection’
Green & Blacks Ltd
‘Bitsa Wispa’
April 2012
Cadbury UK Ltd
0
2.5
5
Percentage Share (%)
‘Green & Black’s’. Retail Value Share (%) in UK. Tablets
2010 2012
0
2
4Percentage Share (%)
‘Bitsa Wispa’. Retail Value Share (%) in UK. Selflines/Softlines
2010 2012
THE QUESTION
A SNAPSHOT ON CHOCOLATE
CASE STUDIES: BRAZIL AND CHINA
CASE STUDY: US
CASE STUDIES: SPAIN AND UK
KEY CONCLUSIONS
Q&A
© Euromonitor International
26
Chocolate Is (Still) For Everyone KEY CONCLUSIONS
Demand Booms In Emerging markets
Indulgence And Quality Rule In ‘Intermediate Economies’
Affordable Snacking And ‘Emotion’ Thrive In EU Countries