Retailers remain hopeful of global Valentine’s confectionery boost
A sense of optimism remains high among retailers for key Valentine’s Day 2024 sales of confectionery, despite a major upturn in core ingredient prices putting pressure on markets, according to analysis from the Euromonitor International, writes Neill Barston.
Notably, the research group stated that while the global economy remains in a challenging period with a number of disruptive factors including supply chain tests arising from the ongoing war in Ukraine, and comparatively high energy prices, international seasonal chocolate sales are expecting a modest upturn.
As Euromonitor noted, there is a ‘perfect storm’ of challenges and uncertainties continue to impact demand and discretionary spending for luxury and online consumers including those buying gifts, experiences, alcohol and chocolate for special occasions but there are good reasons why retailers remain hopeful.
Its research has shown that interest in premium lines and other linked categories including luxury wellness and gifting were at peak levels, underlining global demand continuing to surge for indulgent experiences, with confectionery and chocolate also benefitting from that trend. Consequently, as the research group noted, spending on wellness tourism has returned to near pre-pandemic levels, and is estimated to be worth USD150 billion by 2028.
Carl Quash III, Head of Packaged Foods and Snacks at Euromonitor International, said that gone are the days when Valentine’s Day was meant only for couples. Today, more than half of Americans are either single, divorced, or widowed and globally that figure is 53%. In the future it’s expected to stay way meaning more opportunities for self-love/self-treating or even non-romantic treat sharing.
Hershey’s, Lindt and Reese’s are the big three in the seasonal chocolate market and combined they account for around 20% of global sales.
“I’m seeing interesting responses to the Valentine’s Day innovations this year. Namely, the Reese’s heart-shaped chocolates – which consumers have been cheekily buzzing about online that the shape resembles something entirely different. I’ve also seen smaller packs from premium chocolate brand Ghirardelli – really executing on relevant dimensions of affordability and healthy treating, yet still keeping indulgence intact.”
“The challenges with cocoa and sugar supplies and costs are expected to contribute to seasonal chocolate price growth and thus sales in the years to come. In 2024, we’re expecting global seasonal chocolate prices to grow around 3.5%.”
Online sales boost
As Bob Hoyler, Industry Manager for Retail & Ecommerce at Euromonitor International, explained, although inflation has eased in the recent past, it remains high in many of the world’s most important retail markets in February 2023. As Confectionery Production has reported, cocoa prices have been especially inflated within the past two years, reaching reported multi-decade highs on the US stock exchange, as well as retail prices rising 50% in the UK before Christmas on a number of lines.
“With high prices contributing to the ongoing cost-of-living crisis, many consumers ratioed their spending during the Valentine’s Day holiday in 2023. Towards the end of 2023, however, as inflation has continued to ease, consumer confidence has started to pick back up, especially in North America and Europe.
“With consumers feeling a bit more positive about the economy, the Valentine’s Day holiday in 2024 is expected to be a more encouraging one for retailers than the previous year.”
Furthermore, Fflur Roberts, Head of Luxury Goods at Euromonitor International, said that despite the global disruption, latest data shows that the luxury market overall continues to display resilience.
“Recent growth is being fuelled by the ongoing need for luxury experiences, lifestyle, and hospitality. Traditional gifts such as luxury jewellery, timepieces and other personal luxury goods will continue to drive sales during this year’s celebration, with innovation and creativity driving the evolution of luxury offerings in response to changing consumer preferences and aspirations.
“But we also predict that luxury gifting will shift further towards experiential and lifestyle offerings, increasingly at the expense of traditional material gifts. Indeed, to celebrate this year’s Valentine’s Day we expect more consumers to invest in unique experiences such as fine dining, spa-visits and wellness treatments, as well as luxury travel, and other exclusive events.”