THE predicted overall growth of the South African retail chocolate market far exceeds the global average, and small artisan chocolate manufacturers are beginning to enjoy a larger chunk of the market as South African consumers become more sophisticated buyers, Sarah O’Carroll, industry analyst at business research and consulting firm Frost & Sullivan, said on Thursday.
The retail chocolate market is valued at R5.03bn and is predicted to grow at a rate of more than 10% a year over the next five years.
"Consistent growth is expected to continue in the retail chocolate market, despite the increasing cost of chocolate products, due to rising raw material costs," Ms O’Carroll said.
The retail chocolate market is highly consolidated, with Cadbury, Nestlé and Beacon controlling 85% of retail sales.
The market is driven primarily by increasing disposable incomes and South Africa’s growing middle class.
Growth in the country’s retail footprint is also contributing to increasing chocolate sales, as consumers are presented with a range of chocolate product options at grocery stores such as Pick n Pay and Shoprite.
According to Ms O’Carroll, festive and occasional sales play an important role in the market, boosting sales regularly throughout the year, as consumers buy cyclical chocolate products as gifts.
The market is, however, restrained by consumers’ belief that consuming chocolate carries health risks such as weight gain and increased cholesterol.
"South African consumers are becoming more sophisticated and are increasingly searching for premium chocolate products that are differentiated from common brands found in the retail sector. This has resulted in a surge in demand," Ms O’Carroll said.