• by Nina Lentini  @Nina_Lentini, August 13, 2007

Bids for Campbell Soup's Godiva unit may come in as high as $1 billion, and a fresh study by the Packaged Facts division of Marketresearch.com shows why.

Already a mature $16 billion business in 2006, the chocolate market is expected to grow another $2 billion this year, with premium chocolate at a, well, premium. Packaged Facts says sales at the high end--already 17% of market share--should escalate to 25% of the market by 2011, generating $4.5 billion in sales.

No wonder companies like Hershey and Wm. Wrigley Jr. may be interested in Godiva and willing to fork over a huge sum of cash that Campbell could put to good use.

"The U.S. Market for Chocolate," released last week by PF, finds strong consumer interest in dark chocolate--reputedly full of health benefits--and a general trend toward product premiumization, both of which are driving the market.

PF credits premium chocolate with slowing the declines in sugar-free/diet, gift and novelty product segments, which saw unit sales decrease significantly in 2006.

Godiva, which Campbell has owned for nearly 40 years, has annual sales of about $500 million--about 7% of Campbell's sales last year--and shows an annual profit of $55 million, analysts say.

The unit is part of the fastest-growing business segment at Campbell, posting more than 9% growth in each of the last two years. Competitors Lindt and Ghirardelli, each with less than $5 million in sales in premium chocolate, saw sales skyrocket--at 87% and 244%, respectively, in 2006, according to Information Resources Inc.

An earlier, unrelated PF study on food gifting also points to good news for the eventual buyer of Godiva. Consumer food gifts flowed--leaping by 56% to $13.4 billion, the study reported. Food gifts' share of the total '06 consumer gifts market was 14.5%--up 70% from an 8.6% share in '04.

"Even in categories such as gift box chocolates, which saw a notable decline in the last year, brands such as Ghirardelli and Lindt that are targeting a more hip and upscale clientele are seeing tremendous success," noted Tatjana Meerman, the publisher of Packaged Facts. "We expect that the trend towards high-end products, especially those touting wellness benefits, will be the life force in this market for the next several years."

Hershey, which sells namesake chocolates; Mars Inc., the closely held maker of Snickers bars; and gum manufacturer Wrigley may compete with Cadbury Schweppes Plc in pursuing Godiva, it was reported by Bloomberg on Friday.

Godiva's Double Chocolate Raspberry Truffles and Dark Lion of Belgium butterscotch-caramel chocolates may also attract interest from companies as varied as Coca-Cola Co. and LVMH Moet Hennessy Louis Vuitton SA, the world's largest luxury-goods maker, analysts said.

Coca-Cola and Godiva last year started selling coffee-chocolate drinks called Godiva Belgian Blends, part of the soft-drink maker's attempts to create more profitable beverages. Ray Crockett, a Coke spokesperson, tells Marketing Daily that despite Campbell's having put Godiva on the block, "we have a licensing agreement with Godiva and our relationship is unchanged. The brand continues to grow nationally and is meeting expectations."

In the U.S., Godiva operates more than 200 stores and sells candies in more than 1,000 Macy's Inc., Barnes & Noble Inc. and other retailers' locations, according to its Web site.