Published on 13/04/2017 by Punchmedia

Easter to Bring Sweet Reward for Chocolate Shops

Chocolate makers and retailers throughout Australia are hoping to hit the sweet spot as consumers stock up for Easter this weekend. When business analyst IbisWorld last crunched the numbers on Easter chocolate spending two years ago, it estimated Aussies would shell out $191.4 million, however shoppers are expected to shell out around $200 million on chocolaty treats to mark the holiday in 2017. The Specialty Chocolate Stores industry has displayed strong growth over the past five years, buoyed by a growing trend towards premiumisation. As the overall consumption of premium products has increased, consumers have lifted their consumption of artisanal chocolates and other industry products. Special occasions such as Easter have boosted sales, while overall consumption at cafe-style venues has increased. Favourable conditions for the industry have led to compound annual growth forecast at 4.6% over the five years through 2015-16. The growing franchise network of several major players is expected to drive demand over the current year, with revenue forecast to grow by 2.8%.

Premiumisation drives growth

Premiumisation has provided major avenues for industry growth over the past five years. Many specialty chocolate stores offer a diverse range of hand-made chocolates and premium machine-made products. Operators have also sought to highlight the origins of their cocoa beans. Fair-trade chocolates and organic chocolates have been strong sources of growth, with consumers becoming more aware of product provenance. The industry has expanded its range of additional products such as coffee, hot chocolate and desserts. Over the past five years, the development of many of the leading specialty chocolate stores, such as Max Brenner and Chocolateria San Churro, has been aimed at making a visit to a store an experience rather than simply a shopping trip.

Competition increases

Over the past five years, supermarkets and department stores have become significant competitors to the industry. High-end department stores offer a diverse range of boutique-branded chocolate products, in line with the premium branding of their food courts. Supermarkets have increased their product lines of chocolates, which has been a major concern for specialty chocolate stores. Industry operators have worked to include more diverse food and beverage options, which has been a positive point of differentiation for the industry. Further, specialty chocolate stores have been marketed as offering a premium in-house experience. As such, knowledgeable staff are essential to provide a specialised experience that is beyond the offerings of supermarkets.

Seasonal fluctuations

Various annual events represent both challenges and significant opportunities for the industry. Demand for specialty chocolate soars over periods such as Mother’s Day, Valentine’s Day, Christmas and Easter. These occasions also increase demand for industry products, as the gift market booms over these times. The industry has been forced to adapt to the challenges of meeting brief spikes in demand, both in terms of production and service. During peak times, sales can double or triple for a week and then slow significantly, creating challenges in terms of labour and production capacity.

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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