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US chocolate market ‘staling’, says analyst

By Oliver Nieburg+

19-Oct-2012

North American cocoa grind falls 2% in Q3
North American cocoa grind falls 2% in Q3

The North American cocoa grind has dropped 2% in the third quarter (Q3), leading one analyst to call the region’s largest nation a “staling” chocolate market.

Cocoa grind stats released yesterday showed a 2% fall in Q3 compared to last year from 124,621 metric tons (MT) to 121,890 MT.

The stats cover grinds for Canada, Mexico and the USA and are compiled from company reporting from the likes of ADM, Hershey, Barry Callebaut, Blommer Chocolate, Cargill, Mars and Nestlé.

Little room for growth

Marcia Mogelonsky, director of insight for Mintel Food and Drink, told ConfectioneryNews.com: “The almost 3% decrease in third quarter cocoa grindings for North America shows that the market for chocolate in the US is stalling.”

“It is a mature market, and there is not a great deal of room for it to get significantly bigger."

Mars commands 29% of the North American chocolate market, followed by Hershey on 23% and Kraft Foods (now Mondelez International) on 8%, according to figures from Euromonitor International.

“A decrease in grindings suggests weakened demand and going forward into a significant "chocolate season" (from Halloween through New Year) this is another piece of evidence that the buoyancy of chocolate in the North American market is no longer a guarantee,” continued Mogelonsky.

Cocoa grinds elsewhere

The European grind stats also make for grim reading. The Q3 European grind cocoa grind was the lowest for seven years and saw a 16% slump on the same period last year.

However, commodities analysts from Rabobank suggest that the capacity is simply shifting to Asia as demand grows in emerging markets such as China, India and Indonesia.

The Asian Q3 grind, however, showed minimal growth and was essentially flat at 143,659 tons.

Rabobank said in its latest Agri Commodities report that the slowdown could be explained by cocoa inventories still left over from the first quarter.

The North American fourth quarter (Q4) grind stats are due on 17 January 2013.