North America Chocolate Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

North America Chocolate Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The North American chocolate market is projected to grow at a CAGR of 4.2% during the forecast period (2022-2027).

The chocolate market was impacted by COVID-19 during its onset in 2020. Nevertheless, the market became more stable after the ease of restrictions across importing and exporting countries. The premium sector of the chocolate market was severely affected by low sales volume due to the COVID-19 pandemic, partly due to supply-side issues linked to quality and certification. After the ease in restrictions, chocolate demand rose, especially during the festive season such as Halloween and Christmas, to greet others with chocolate in United States. This is expected to provide an important means of assistance to the recovery of the market. Additionally, chocolate makers are offering unprecedented price cuts to stem the weak demand during the key Easter season. For instance, Lindt & Spruengli AG is offering online price cuts of 30% on its entire Easter assortment. Laederach, another high-end chocolate chain, abandoned its practice of avoiding discounts this year. Retailers across North America have also been offering promotions of as much as 50%. This, in turn, has impacted their profit margin.

Impulse purchasing and rising interest in premium and seasonal chocolates are important factors driving the North American chocolate market. In addition, health benefits associated with consuming organic and dark chocolate, coupled with increasing demand for chocolates across various applications, including confectionery products and flavored food, have further propelled chocolate demand in North America.

Health concerns related to high sugar content, such as obesity, are restraining the growth of the chocolate market due to the ongoing fitness trend in the North American region. However, it is providing an opportunity for companies to come up with low-sugar and organic chocolates.

Premium chocolate is now an area for innovation. Some noteworthy trends, such as transparent sourcing and rare ingredients to chocolate that suits lifestyle needs, give premium chocolate its competitive advantage. Helping drive the premium chocolate category is the greater number of producers making distinctive premium chocolate products, coupled with increased consumer desire to try new products. Categories such as Novelty Chocolates, Sugar-Free Chocolates, Gift Boxes, and Snack Size Chocolate Bars which are considered premium, are widely sold in United States, with items greater than 35 oz being the most sold category. Companies like Guittard Chocolate have also developed a 150th-anniversary chocolate bar, the limited edition, which is a 62% premium cacao bar. The rise in income and increased indulgence in sweet food are attributed to larger packets of chocolate being preferred. Indulgence and premiumization appear to be key drivers behind the marginal growth of super-premium and limited-edition chocolate during the forecast period.

United States market holds the largest share in the North American region, owing to high consumer spending power, consumption patterns, the wide availability of offerings, and easy accessibility to products in the region. The demand for chocolate is high during festivities, such as Christmas and Easter, and several key players in the market release limited-edition products to attract a larger consumer base. For instance, in September 2021, Hershey’s released its How the Grinch Stole Hershey’s Kisses, wrapped up in one of 10 different Grinch-inspired foils. The Kisses cost USD 2.99 for a 7.4-oz. bag or USD 3.49 for a 9.5-oz. bag. The new product was one of 13 that Hershey’s started selling for the holiday season. The premium chocolate market is also quite popular in United States, as people in the country prefer treating themselves with bite-sized chocolates to limit their confectionary consumption. Over the study period, the consumption of dark chocolate has also risen significantly, owing to its perceived benefits in regulating cardiovascular. Additionally, the low sugar content of dark chocolate encourages the consumers to look for a healthy experience.

The North America Chocolate market is highly competitive, with various multinational players accounting for a significant share. The most active companies in the market include key players, such as The Hershey Company, Mars, Incorporated, Ferrero International, Chocoladenfabriken Lindt & Sprungli AG, and Nestle SA, among others. Brand loyalty among the consumers gives these companies an upper edge. The development of new products to enhance their portfolio and capture untapped markets has driven the growth of the chocolate market. Furthermore, strategic launches, such as Valentine's Day launches of chocolates, as carried out by the leading players like Godiva, Ferrero, Hershey, etc., have further bolstered their market presence.

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