We’ve shared several great essays written by our students last term. Arwa, Clara, and Mohamed from levels 1, 2, and 3 wrote about the city of Jeddah, pros and cons of technology, and getting lost in the desert. Kha from level 4 explained the need for passion in our lives, and Silvia from level 5 argued against the use of animals in circuses.
Today, check out Hana’s research paper on the chocolate candy industry. Hana, a level 6 student from Japan, describes the key factors in marketing chocolate candy as well as global trends.
How do confectionery companies make popular chocolate products?
Where do you see chocolate? A lot of people in the U.S. would respond, “Everywhere.” There are many chocolate products at the supermarkets. At the big supermarkets, such as Kroger and Target, it is not uncommon that various chocolate products are lined-up in a large section. In addition to the supermarkets, we can find many local chocolate shops in the U.S. For example, there is GooGoo SHOP and Bang Candy in Nashville. This shows that chocolate is one of the largest industries in the food market. In fact, according to statistics by Niall McCarthy, “The average American eats about 9.5 lbs of chocolate each year,” this is that the U.S is the 9th largest chocolate consuming country in the world (McCarthy). And, in 2017, it is estimated that chocolate sales in the U.S. will be about 22.4 billion U.S. dollars (Chocolate sales). However, it is extremely difficult for a company to make popular chocolate products in ‘the great chocolate nation’. Few products would survive in the market for a long time. Then, what affects the sales of chocolate products? To raise only one factor is hard because there are many to consider when producing a popular chocolate product. It is certain that a company should understand the current trends in the chocolate industry. Recently, trends in the confectionery market, especially chocolate, have been changing rapidly. This research paper will investigate how confectionery companies make popular chocolate products these days.
In order to find out how to produce successful chocolate items, confectionery companies have long discussions and take various approaches because they cannot succeed with simple ways. So, first, this research paper will discuss the possible factors to make popular chocolate products, and second, consider the recent trends in the chocolate market.
II. Factors to succeed in the chocolate industry
There are a large number of flavors among chocolate products. It is not unusual that customers cannot choose which item to buy since they find various kinds of chocolate at the supermarket. The popular flavors are different between countries. When it comes to me, I was surprised at the difference in the taste of chocolate in the U.S. and Japan when I ate American chocolate for the first time. Therefore, the companies that sell chocolate products in the U.S. have to understand the American preference of taste. According to the report by FONA’s Trend Team, the top 5 popular flavors of chocolate in North America are ①Unflavor/Plain, ②Caramel, ③Almond, ④Peanut Butter, ⑤Hazelnut. This trend is based on the data gathered from Jan. 2012 to Dec. 2015 (Watt). Compared with the top 5 flavors in the world, it is interesting that Peanut Butter is in the top 5 in North America. Speaking of the U.S., there are various chocolate products with peanut butter at the supermarkets and chocolate shops.
Chocolate is made of many ingredients; therefore, the nutrition of chocolate is really influenced by what kinds of things are in it. And companies are supposed to list the nutrition and ingredients of their products on the label so that customers could see what chocolate is made of before buying it. In the case of GooGoo CLUSTER, the nutrition facts, the ingredients, the allergens, the company’s information and the description of the product are written on the label. It has 240 calories per one piece (50g)! A lot of customers probably check the nutrition of the product. Thus, it could be said that nutrition has an effect on the customer’s desire to buy. Each confectionery company uses its own ingredients to make chocolate, and local chocolate companies particularly tend to care about the nutrition of their products. They use some natural and healthy ingredients, such as organic, gluten-free and fewer calories. For instance, Colts, which is a local chocolate shop in Nashville, is introducing the new chocolate that is made of all-natural peanut (edible Nashville). Moreover, most of chocolate made by local shops is handmade. On the other hand, chocolate produced by large companies is factory-made for efficient production. It depends how much people care about nutrition when they eat chocolate.
A brand would be one factor in the big sales of chocolate products. The major confectionery companies have some big-name products known by a lot of people. Mars is famous for M&M’s, Snickers and Twix. Hershey’s and Cadbury are also well-known confectionery companies in the U.S. They use the company’s names as the names of their products to utilize the value of their brand. Imagine that two companies, one is a well-known and another is nameless, introduced new chocolate products respectively. They are similar to each other and the same price. Which is bought more in the market? It could be assumed that many more people choose chocolate from the famous company rather than the unknown one. It is because the famous company has a good reputation and consumer confidence that have been accumulating over time. Accordingly, people tend to be influenced by the company’s brand power when shopping.
Naturally enough, people care about the cost of the product except for those who are rich and indifferent to price. If the quality is the same, the cheaper the better; however, companies have to consider their profits as well as customers. Therefore, it is significant for companies to set the price that meets both the customer’s satisfaction and the company’s gain. Generally, high-quality chocolate is more expensive than normal chocolate because it takes much time and money to make. For example, a milk chocolate bar produced by Hershey’s, Lindt and Equal Exchange is, respectively, sold at $1.50, $2.50 and $3.99 (at a Kroger on Jun 16, 2016). The Equal Exchange chocolate bar is made of organic ingredients, so it might be the most expensive among them. Thus, the cost of a chocolate product depends on its quality.
Appearance and portion are also important for the chocolate marketing. A lot of popular chocolate items have a unique design that attracts customers. Some of them have a pop-appearance, and others have their own characters. For example, M&M’s chocolate is famous for its character that looks like chocolate and has a face, arms and legs. Besides, Reese’s uses bright colors on the package, which is covered with orange and has the yellow logo. These examples show that an outstanding appearance can catch customers’ attention. In addition to appearance, the size and form of products vary among the same kind of chocolate, like a bar, a family pack, a fun size and bites. When it comes to Snickers, it has many different types of items, or the regular Snickers, the Snickers Mini, the Snickers Bites and so on. Each customer probably chooses a type in accordance to his/her situation where he/she eats chocolate. In the case of a mother, she would pick up a family pack to eat with her family, while an office worker might prefer a compact size because it is so easy to carry that he/she can eat it whenever and wherever he/she wants. Accordingly, confectionery companies have to make chocolate products that attract the customers’ attention and meet their needs.
Advertising is a great means to draw the people’s attention. There are many kinds of advertising forms, like TV, a magazine, a flier, a billboard and the Internet. People may frequently see such advertisements in many places. Advertising is the most convenient way for companies to introduce their products to customers. Among the various ways of advertising, a TV commercial is very influential. One study in Australia shows that food companies, which include chocolate and confectionery, use persuasive marketing skills with TV commercials. They are more likely to advertise their products during the children’s peak viewing time and popular programs. Moreover, they often use cartoons and spokes-characters because this strategy can make children recognize their products and have positive attitude toward them. And, in the U.S., similar findings about TV advertisement have been reported (Flood et al.). As stated above, companies try to attract as many customers as possible by using various and unique ways of advertising.
III. Recent trends in the chocolate market
a) Price and Quality
There is the relation between price and quality. It cannot be said unconditionally, but the higher the quality of a chocolate product, the more expensive it is because making a high-quality chocolate needs costly ingredients and elaborate steps. Nevertheless, people tend to put emphasis on quality over price these days. One factor that has brought this tendency is ‘premiumization’, or demand for moments of happiness (Morris, 3). Many consumers seek chocolate as ‘a daily luxury’ that offers a delightful moment, not as just a product (7). Especially, women have become to eat premium chocolate in order to relieve the stress in their daily lives (“Premium Chocolate”). Considering this trend, some confectionery companies have put effort into producing high-quality and delicious, or ‘premium’ chocolate. In short, the demand for quality has grown over price.
b) Taste and Nutrition
Good taste is essential for people when eating chocolate. The reason why they eat chocolate willingly is that it is delicious. As mentioned in the introduction, American people routinely eat much chocolate. However, as the issue of obesity is getting more serious in the U.S., many people have worried about their health. They often check the nutrition of the products carefully. As a result of increasing health-conscious consumers, dark chocolate has become preferred more than before because they think that it is beneficial for their health (Morris, 8). In fact, dark chocolate can prevent or delay certain types of disease and keep people looking and feeling younger (“Chocolate Industry”). According to the data by National Confectioners Association, in the U.S., the sales of dark chocolate products grew 8% in 2014 over 2013 (“Chocolate Industry”). Thus, people would require companies to make chocolate products that are not only delicious but also healthy.
c) Portion and Packaging
In recent years, a new type of chocolate has started to appear in the market. These are the bite-sized chocolate items. “The bite-sized candy sub category has exploded, as consumers look for the full taste experience of their favorite candy bar in a smaller portion. It’s easy to share, and the resealable pouch makes it possible to eat some now and save some for later,” says Hank Izzo, v.p., research & development, Mars Chocolate North America (qtd. in Lindell). Thanks to the bite-sized chocolate, people can eat chocolate easily at any time and place. And, personally, the most wonderful thing is that people could share not only chocolate but also happiness with their family and friends. In addition to the new type of portion, companies try to devise the packaging. They put a description about the products and an actual size picture on the label so that customers can easily image the shape and taste of the products.
There are many ways to advertise chocolate products. Among them, advertising with SNS, like Facebook and Twitter, has been increasing rapidly in these days. A lot of confectionery companies have SNS pages to promote their products. In the case of Cadbury, it has “separate Facebook pages for each of its most popular products, including Dairy Milk, Wispa, Crème Egg, Bourneville and Hot Chocolate” (qtd in Moth). Furthermore, some companies run a promotional campaign that is to set up a goal of the number of ‘likes’ and celebrate when a total of ‘likes’ reaches them. Through a fun activity, companies can spread their chocolate products very quickly. This new advertising using SNS was an unimaginable way previously; still, it is usual and one of the most influential means to attract a customer’s attention.
To sum up, confectionery companies need to correctly grasp factors to make popular chocolate products and understand the recent trends in the market. As some examples given above, the companies that have popular chocolate products use the ideal marketing strategies. It is why they have succeeded in the competitive market. In my opinion, premium and healthy chocolate will be in high-demand from now on. Because people can find plenty of chocolate in many places, they are getting particular about chocolate. They are not satisfied with the simple chocolate. So, confectionery companies must be required to make high-quality and special chocolate. Nowadays, artisan chocolate, which is made carefully by skilled patissiers, has caught a great deal of attention from consumers. Therefore, the large confectionery companies have a stable market share; while, artisan chocolate companies, such as high-quality companies and small local shops, will be more and more popular in the future. Besides, the clever advertising is also important for the chocolate marketing. SNS is fashionable now. But it is difficult for companies to know how long the market trends will continue in the future because of the rapid change. They need an exact analysis of the chocolate market trends to take a great advantage of advertising. In conclusion, confectionery companies should deeply understand the customer’s needs along with the skilled marketing strategies and make chocolate products that fill people’s lives with satisfaction and happiness.