Confectionery is building on premiumization in a market that is mature but continuing to grow modestly. Despite rising concerns around sugar intake, consumers continue to demand everyday and more indulgent treats and snacks. NPD has been very strong over the past year or so, with double-digit growth in global confectionery launches recorded by Innova Market Insights over the 12 months to the end of September 2019. Among these, premium ingredients and flavors were some of the most important trends seen in 2019.
“Indulgent & Premium” was the number two positioning for chocolate confectionery launches recorded by Innova Market Insights in the first half of 2019, used for 12 percent of NPD globally, rising to 20 percent in North America over the January 2018 to June 2019 period.
A premium appeal
In the US, there is particular interest in gourmet and artisan-style options, often with a focus on the provenance of the cocoa, its content in the finished product and the use of upmarket additional ingredients and flavors. Premium NPD was featured in all the chocolate subcategories and across a whole range of companies, including multinationals, smaller independents and retailers in 2019.
The move to more upmarket and indulgent options is also reflected in flavor trends. While the traditional favorites – hazelnut, almond, caramel, peanut and nougat – were the top five flavors for launches recorded by Innova Market Insights in the first half of 2019, there was also a move to more indulgent and complex flavors. Examples introduced over this period include strawberries & cream, salted caramel, tiramisu, brownie and Oreo, as well as on-trend options such as coffee, matcha tea and sea salt.
In the past, premiumization of the market has been indicated by the growing use of dark chocolate, but the choice of dark, milk or white is now being broken down with the arrival of dark milk choices, offering a half-way point between rich dark and smooth milk recipes. Mondelēz first launched its Cadbury Darkmilk in Australia in 2017 and following its performance there launched it in Europe in the autumn of 2018. The introduction of Cadbury Darkmilk in the UK with 40 percent cocoa and 14 percent milk was positioned as having “a more grown up taste.” In mainland Europe, Darkmilk was made available under the Milka brand and in Scandinavia under the Marabou brand.
Maintaining taste is vital in the chocolate market, but concerns over health issues are also starting to be addressed, with the development of healthier options, often combining a lower sugar content with other functional benefits.
Although chocolate confectionery consumers do not traditionally tend to have high levels of concern about health issues, the rising awareness of the need to reduce sugar intake does seem to be starting to influence NPD. No added sugar, low-sugar and sugar-free claims seeing rising levels of use, although still from small bases outside the top ten positionings.
Bulk sweeteners are more often used for sugar reduction in confectionery, led by ingredients such as maltitol, sorbitol and xylitol. The industry is faced with the challenge of reducing sugar in its products without losing the sensory quality or indulgent nature of chocolate. More brands are using sugar-related claims and the use of natural non-nutritive sweeteners such as stevia and monk fruit is rising. Sweet proteins, like thaumatin, may also increasingly feature in chocolate.
Some brands are now using coconut sugar to replace the usual sugars, which are not only an efficient replacer in terms of function and taste, but are also perceived by consumers to be healthier.
The confectionery market may be very mature in many parts of the world and under pressure from alternative snacks and treats, but it is still moving forward in terms of sales and NPD. Despite some of the innovations discussed here, most new product activity by confectionery companies is still within the confectionery mainstream, such as new formats, new flavors, or new ways to provide texture. There are also ongoing initiatives to bring more focus to bear on healthier options, including reduced sugar lines, but it is not clear how or to what extent these will influence market development.
The three leading drivers of choice remain flavor, cost and indulgence. Despite the health concerns of some consumers, as well as health organizations and governments, confectionery remains a huge market with high levels of use and acceptability, as well as an ongoing role in seasonal celebrating and gifting.