Swiss chocolate market records key annual growth
Chocosuisse, the association of Swiss chocolate manufacturers, has revealed a market upturn during 2019, recording a 2.2% rise in sales to a total of CHF 1.79 billion for the year.
As the organisation noted, the nation experienced a drop in consumption within the chocolate confectionery category over the past decade, which came despite being home to some of the most well-known brands in the industry.
In its latest report, Chocosuisse said that despite continuing pressure from imports, more than 200,000 metric tonnes of chocolate were produced in Switzerland for the first time last year thanks to demand from abroad. The associated economies of scale are also important within Switzerland.
After declining significantly in previous years, domestic consumption bottomed out in 2019. The growth in export business enabled the production of Swiss chocolate to rise by 3.8% to around 200,000 metric tons. Furthermore the improved sales picture built on previous growth of 1% for 2018, to CHF 1.75 billion.
According to Chocosuisse, domestic sales of Swiss chocolate for 2019 rose by 0.8%, increasing the associated revenues by 1.2%. The proportion of imported chocolate in domestic consumption remained at 41%. Annual per capita consumption in Switzerland also remained virtually unchanged, at 10.4 kilograms. After declining in recent years, per capita consumption bottomed out in 2019.
The export share of total production by Swiss chocolate manufacturers increased again and stood at 73.7% last year (2018: 72.5%). The sales volume achieved through exports increased by 5% to about 147,600 metric tonnes.
Export sales rose by 3% and topped CHF 1 billion for the very first time. This growth was largely based on exports to countries outside the European Union. High growth rates were recorded in markets such as Canada, the US, China, the Middle East and Singapore. Nevertheless, the EU remains Switzerland’s most important sales market.
The growth in chocolate exports enables economies of scale, which also have a positive impact on the supply to the domestic market. The corresponding significance is evident in the current situation.
Significantly, the Swiss franc has appreciated significantly against the euro since the start of 2019. Another challenge is the ongoing price disadvantage for raw materials due to agricultural border protection. Following the abolition of duty for exports, a private fallback solution was seamlessly implemented in early 2019. However, a sizeable proportion of the funds used thus far has been allocated to other purposes.
The introduction of minimum border protection in support of Swiss sugar has increased the raw material price handicap, and declaration requirements for products with a “Swiss finish” have created unnecessary additional costs. Nevertheless, 2019 also presented opportunities: the free trade agreement (FTA) concluded with Mercosur states opens up nondiscriminatory access to more than 260 million consumers. As the organisation asserted, the FTA must therefore be rapidly approved to avoid disadvantages vis-à-vis chocolate suppliers from other countries on the South American market.