Natural Foods Merchandiser

Chocolate sweetens naturals' sales in the candy segment

The candy segment is chock-full of natural and organic items, with more than 3,000 SKUs sold in naturals supermarkets and 550 through conventional supermarkets. In this competitive category, consistent innovation is necessary. Two subcategories make up this dynamic segment: chocolate and other candy.

The growth of chocolate is explosive. Combined-channel sales growth of natural chocolate is 28 percent—with year-over-year sales increasing by 12 percent in naturals supermarkets and 82 percent in conventional supermarkets. In the most recent 52-week period, the combined sales volume of natural and organic chocolate surpassed $100 million, with 67 percent of the volume generated in naturals supermarkets and the remaining 37 percent in conventional supermarkets. Chocolate drives both growth and volume for the natural candy segment; of the 20 top-selling candy items, 19 are chocolate in naturals supermarkets and 14 are chocolate in conventional supermarkets.

Naturals supermarkets sell more than five times as many candy items as conventional supermarkets. Naturals supermarkets offer some 2,000 chocolate items, while conventional supermarkets offer a much narrower selection of about 350 items. This large variance translates to a sales share that is top-heavy in conventional supermarkets: While the 20 top-selling natural chocolate items represent only 26 percent of naturals supermarkets' chocolate sales, the top 20 items in conventional supermarkets represent more than half of their natural chocolate sales. The contribution of new items is also weighted much heavier on the conventional supermarket side. For the latest 52-week period, 75 new natural chocolate items became available, contributing 27 percent to total natural chocolate sales in conventional stores. In comparison, 300 new items were launched in the naturals channel, but contributed only 5 percent to total chocolate sales.

Organic chocolate is a big piece of the natural chocolate market. Its sales increased 19 percent in natural supermarkets and accounted for 44 percent of total chocolate sales. On the conventional side, organic chocolate sales increased 144 percent and contributed 55 percent to total natural chocolate volume. The 95 percent to 99 percent organic segment represents the highest share of organic chocolate sales in both natural and conventional supermarkets. The 70 percent to 94 percent organic classification was the fastest-growing organic segment in naturals supermarkets, while the organic segment below 70 percent led growth in conventional supermarkets. Dark chocolate, with its high cacao content, is a huge driver behind the growth of chocolate, partly due to its many potential health benefits. In addition, dark chocolate often features creative flavors and exotic ingredients, meeting the demands of consumers' increasingly sophisticated palates. For the most recent 52-week period, 40 of the top 50 chocolate items in naturals supermarkets were dark chocolate and accounted for 39 out of the top 50 in conventional supermarkets.

The brands driving the phenomenal growth of dark chocolate vary by channel. In natural supermarkets, Endangered Species and Green & Black's lead the charge. While these same brands are also at the top of the list in conventional supermarkets, mainstream brands, like Hershey's Cacao Reserve, still generate the most volume. Conventional players are vying for their share of the dark chocolate craze and have launched specialty and gourmet items with appealing packaging that touts buzz words, such as extra dark or high in antioxidants. It seems that dark chocolate has become a staple in the candy segment for consumers and retailers alike.

Organic chocolate sales by NOP classification


Organic Chocolate Sales by Channel

Current $

Year Ago $

% Chg

Absolute $ Chg

Cur $ Shr

Conventional Supermarkets

Total Organic Chocolate

$18,876,248

$7,747,327

144%

$11,128,920

100%

100% Organic Chocolate

$446,002

$311,636

43%

$134,366

2%

95% - 99% Organic Chocolate

$8,944,198

$6,678,485

34%

$2,265,713

47%

70% - 94% Organic Chocolate

$832,686

$714,775

16%

$117,912

4%

1% - 69% Organic Chocolate

$8,653,361

$42,432

20,293%

$8,610,929

46%

Natural Supermarkets

Total Organic Chocolate

$30,883,189

$25,958,678

19%

$4,924,511

100%

100% Organic Chocolate

$2,649,514

$2,289,967

16%

$359,547

9%

95% - 99% Organic Chocolate

$25,712,014

$21,819,457

18%

$3,892,557

83%

70% - 94% Organic Chocolate

$1,843,961

$1,113,539

66%

$730,421

6%

1% - 69% Organic Chocolate

$677,700

$735,715

-8%

-$58,015

2%

Combined Channel

Total Organic Chocolate

$49,759,436

$33,706,005

48%

$16,053,431

100%

100% Organic Chocolate

$3,095,516

$2,601,603

19%

$493,913

6%

95% - 99% Organic Chocolate

$34,656,212

$28,497,941

22%

$6,158,271

70%

70% - 94% Organic Chocolate

$1,828,314

$1,113,539

46%

$848,333

5%

1% - 69% Organic Chocolate

$9,331,061

$778,147

1099%

$8,552,914

19%


Candy Sales by Channel

Conventional Supermarkets

Cur $

YA $

% Chg

Absolute $ Chg

Cur $ Shr

# New SKU

Candy Segment

$39,708,185

$23,926,653

66%

$15,781,533

100%

91

Chocolate Candy

$34,269,391

$18,841,351

82%

$15,428,039

86%

75

Other Candy

$5,438,795

$5,085,301

7%

$353,493

Natural Supermarkets

Candy Segment

$82,570,300

$74,578,244

11%

$15,781,533

100%

378

Chocolate Candy

$69,644,529

$62,377,333

12%

$7,267,196

84%

301

Other Candy

$12,925,771

$12,200,911

6%

$724,860

16%

77

Combined Channel

Candy Segment

$122,278,485

$98,504,897

24%

$23,773,588

100%

N/A

Chocolate Candy

$103,913,920

$81,218,684

28%

$22,695,235

85%

N/A

Other Candy

$18,364,566

$17,286,213

6%

$1,078,353

15%

N/A


Candy segment share


Source: SPINSscan Conventional, powered by Nielsen, and SPINSscan Natural, for current 52 weeks ending 7/14/07 and prior 52 weeks ending 7/15/06.

Natural Foods Merchandiser volume XXVIII/number 10/p. 44

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish