2014-02-14 10:25:02 - Chocolate Production in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
After facing some bitter challenges, the United States Chocolate Production market has remained relatively solid thanks to America´s sweet tooth. Despite lower levels of per capita disposable income during the recession, consumers increased chocolate purchases as a comfort food, particularly cheaper chocolate goods. As consumers had more spending money during the years following the recession, they continued to increase purchases of chocolate products, thus benefiting industry revenue. During the past five years, a growing number of health conscious Americans consumed less sugar; however, in response to the link between excessive sugar intake and health issues, a trend which negatively affected demand for high-sugar chocolate products. Producers responded by advertising healthier chocolate products such as dark chocolate and organic chocolate. Product
developments combined with promotional messages revamped consumer demand, and renewed interest in the chocolate market.
Overall, revenue expanded at a slow annualized rate of 0.2% to $14.7 billion during the five years to 2013. This includes expected growth of 0.5% from 2012 to 2013.
Profit margins expanded during the past five years despite high volatility in the price of sugar (a primary input in chocolate products), because producers were able to pass these costs to buyers in the form of higher product prices. For example, the price of sugar grew 17.0% in 2009 and 44.3% in 2010, but several industry players raised chocolate prices even more, padding profit margins. Even with these price hikes, brand-loyal consumers continued to buy the same chocolate brands, preventing declines for industry profitability. More producers also streamlined production processes by adopting new technologies, enabling them to employ fewer people and cut wage costs. Consequently, profit margins expanded from 11.4% of revenue in 2008 to 14.0% in 2013.
During the five years to 2018, the industry is projected to experience revenue growth at a faster rate compared to the previous five years. As per capita disposable income increases during the next five years, more consumers will be able to afford and indulge in discretionary products like chocolate. Furthermore, as more Americans become health conscious, demand for sugar-free, dark and organic chocolates will increase, thereby growing revenue for the industry. Overall, revenue is projected to increase at an annualized rate of 1.6% to $15.9 billion during the five years to 2018.
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