• by Karlene Lukovitz  @KLmarketdaily, December 4, 2008

However, growth in the premium segment continues to be robust, with single-serving sizes and health claims such as high-antioxidants providing consumers with rationales for feeding their craving for sweets.

U.S. sales of conventional, lower-priced chocolate grew just 1.5% last year to $13.5 billion, while premium products saw growth of 20% to $3 billion, according to a new Packaged Facts report, "Premium Chocolate in the U.S.: Mass, Gourmet, Prestige and Super Premium."

The premium segment's sales jumped by 200% between 2003 and 2007, and its share of the total chocolate market grew from 7% to 18%. In contrast, lower-priced mainstream chocolate grew just 3.9%. As a whole, the chocolate market saw growth of 18.7% for the five years, from $13.9 billion to $16.5 billion.

However, even premium has seen its growth rate slow in recent years: Last year's 20% was down from a high of 40% in 2004.

Premium product dollar sales have grown in part because of greater distribution in the mass, FDM (food/supermarkets, drugstores and mass-merchandisers) channel. But dollar growth for both premium and mainstream chocolates has come from pricing gains rather than unit product sales. Units have been flat for the past four years, reports PF.

PF defines "premium" as all chocolate products priced at $8 per pound or higher. Within premium, subcategories range from trade-up/mass-market premium ($8 to $16 per pound) to super-premium ($40+ per pound).

PF expects premium to continue to drive the overall category, with premium sales reaching about $5 billion and overall category sales reaching $20 billion by 2012.

New chocolate product launches in conventional and natural FDM channels jumped by 22%, or 1,800 SKU's, last year, according to Datamonitor's Productscan. However, PF projects that the recession will push the launch growth rate down to just 11% this year.

Within premium, "premiumization" product claims/tags--including upscale, gourmet, natural and organic--accounted for the majority of claims last year, but "single-serving" and health/wellness tags also grew substantially. The "high-antioxidants" claim, which is driving "meteoric" sales growth for dark chocolate, showed particularly rapid growth.

As for emerging trends in premium chocolate, PF identifies these as the top 10, in order of importance: bean-to-bar and microbatch production; dark milk and upscale white chocolate; sustainability; "premiumizing" the familiar; exotic flavors; exotic functions; ultra-dark bars; ethical chocolate (organic/fair trade); large tablet bars; and filled bars.

Lindt and Godiva continue to account for a third of the premium chocolate market's total sales. However, the companies showing the greatest premium sales growth last year were Creative Natural (maker of Chocolove), Alfred Ritter, Sherwood, Endangered Species and Ghirardelli, according to PF.