5 marketing tactics helping premium chocolate sales outpace overall category

Everyday chocolate, such as KitKat and Hershey’s bars, still dominate 82.5% of the $10.3 billion in category sales in food, drug, mass, military commissaries and select club and dollar stores, compared to premium chocolate’s much smaller 17.5%, according to data from IRI for the year ending April 20. But dollar, unit and volume sales of premium chocolate are growing more quickly than for everyday chocolate, according to the Packaged Facts report.

Sales of premium chocolate, such as Godiva and Lindt, climbed 4.8% to $1.8 billion in the year ending April 20, 2014, compared to sales of everyday chocolate, which climbed only 3.8% to $8.5 billion in the same period, according to the report.

“But the big story is [premium chocolate] had big growth in terms of unit and volume sales,”​ which were up 5.7% and 4.6% respectively, compared to a 1.3% increase in unit sales and a 0% increase in volume sales for everyday chocolate, George Puro, the author of the Packaged Facts report, told Food Navigator USA.

That “indicates people are actually trying out premium chocolate a lot more,”​ he said.

He added the growth of premium chocolate not only outpaced everyday chocolate, but it also grew faster than the overall chocolate category, which increased 3.7% to $10.3 billion during the year period.  Like with everyday chocolate, the overall category’s unit and volume sales were not as strong at 1.9% and 0% respectively.

When chocolate sales from vending, specialty stores and all club and dollar stores excluded from IRI data are added, U.S. sales of chocolate reached $20.81 billion in 2013, according to Packaged Facts data. It expects sales to grow between 3.5% and 5% annually to $26.1 billion in 2018, according to the report.

Sales driver #1: flavor innovation​

A major driver of premium chocolate sales is innovation, with producers “pushing the envelope toward new flavor directions,”​ according to the report.

For example, companies are adding “comfort foods”​ to chocolate, such as bacon, cookie dough or cereal, Puro said. He added in the report that “flavors with an adult flair,”​ such as a hint of alcohol and gourmet salt also are popular innovations.

Sales driver #2: health benefits ​

Manufacturers of premium chocolate also are exploiting consumers’ interest in health and wellness by touting the heart and brain health and anti-inflammatory properties of dark chocolate, which has been demonstrated in “study after study”​ published in the past year, Puro said.

Chocolatiers also are adding healthy ingredients to chocolate to drive premium sales, such as super seeds, including chia, hemp and quinoa. They then make corresponding health claims for these ingredients, Puro said.

Sales driver #3: increased accessibility​

Sales of premium chocolate also are rising because the products are more readily available than before, Puro said.

“To some extent, you are seeing a lot more premium chocolate sold in drug stores and supermarkets … and it is taking away from everyday chocolate sales. Although sales of everyday chocolate are still pretty huge,”​ he said.

The report explains that mass retailers are more likely to stock premium chocolate in the candy aisle and entice consumers with everyday chocolate at checkout. High-end retailers, such as department stores and specialty retailers, on the other hand, are more likely to place premium products like Godiva near the point of sale for a higher priced impulse purchase.

Sales driver #4: smaller portions for less​

Marketers of premium chocolate also are building brand loyalty and an appetite for higher priced chocolate among young consumers who make less income by selling sell expensive “bridge” ​products, Puro said.

For example, Lindt sells Hello chocolate bars, which are smaller than traditional offerings, as a lower priced entry level brand. The idea is once consumers are hooked on Lindt Hello, they will pay more for the higher-priced premium Lindt products as their income increases or finances allow.

Vosges also took a similar approach with its Wild Ophelia line-up. These bars sell for about $3.49 compared to $6 or $7 for more premium bars. They function as an introduction of the brand to consumers – especially those who shop primarily at mass retailers and not specialty shops.

Sales driver #5: marketing indulgence​

A tried and true driver of premium chocolate is marketing campaigns that position chocolate as a “self-reward,”​ Puro said.

The idea in these campaigns is “sometimes chocolate is a gift for someone else, but also it can be a gift for yourself,”​ he said. This takes the guilt-factor away from the purchase.