To no one’s surprise, the consumption of chocolate and other comfort food is on the rise as consumers lean more on guilty pleasures to cope with pandemic-related anxiety.
In fact, the stress of 2020 coupled with consumers staying at home more facilitated an 8% rise in snack consumption (both sweet and salty) and a 4% increase in in-home snack breaks, according to NPD Group.
Further, National Confectioners Association (NCA) data shows that chocolate demand surpassed overall candy market demand from March 15, 2020 to Aug. 9, 2020. Between those five months, the premium chocolate market saw the largest growth with a sales spike of 12.5%. Non-premium chocolate sales rose 5.5%.
Demand is expected to grow in the coming years with the global chocolate market projected to expand at an annual average of 4.93% during 2021-2027, according to Orion Market Reports. Shorter term, 86% of surveyed Americans said in an NCA report that they plan to share the gift of chocolate and candy this Valentine’s Day.
Strong Sales for Hershey and Other U.S.-Based Snack Makers
Hershey has fared well overall in the pandemic. While candy bar sales fell in line with home-bound consumers, sales of other products, like chocolate chips, rose. In its most recent quarterly earnings report, Hershey said net sales rose 5.7% to $2.19 billion, beating analysts’ projections. Meanwhile, Chicago-based Mondelez, said its quarterly sales rose 3.2% in line with expectations.
Retail Pain for Godiva and Smaller Chocolatiers
Despite strong demand for chocolate, a change in shopping patterns is altering the retail landscape as consumers stay at home and transition to online purchases.
Chocolatier Godiva will be shuttering its 128 store and café locations across North America at the end of March 2021, citing less in-person shopping during the pandemic.
Godiva offerings will still be available online and inside partnering retail and grocery stores across the continent going forward, and the company will maintain in-store operations across Europe, China and the Middle East.
“They lost between half their business which is done due to tourists, the other 25 percent of the business which is done due to special occasion, and another 25 percent which is done to impulse,” Marshal Cohen, chief retail analyst at the NPD Group market research company, told NBC News. “Where’s the business coming from? Everything moved to online with great ease.”
Along with Godiva’s retail challenges, smaller chocolatiers around the world are struggling as the pandemic curbs store foot traffic and demand from special events.
Market Prospects
As the pandemic continues and consumers stay closer to home, large snack makers remain well positioned for growth while smaller retail operators face considerable challenges going forward. Many small businesses have been successful leveraging social media, email campaigns and other promotions to drum up business, which in combination with rent relief and loans could be a bridge to post-pandemic recovery.
