The Chocolate Industry - Cornell University presentations... · Why The Chocolate Industry ... brands Hybrid Consumer Industry Overview Content Analysis Raw Data Analysis ... Consumer

The Chocolate IndustrySaddmun Ahsan

Rebecca Etessami

Laya Mallela

Nishat Yasmin

Agenda

Industry Overview

Content Analysis

Raw Data Analysis

Conclusion & Recommendation

Why The Chocolate Industry

Who doesn’t love chocolate?

More than just a snack

Industry Overview Content Analysis Raw Data Analysis Recommendations &

Conclusion

Industry at a Glance

Revenue

16.8bn

Profit

959.9m

Annual Growth 2011-2016

1.2%

Annual Growth 2016-2021

0.7%

Businesses

1,149


Conclusion

Types of Consumers

Wants cheaper products and

value lines

Looks for bite size varieties

Value Consumer

Sees chocolate as more than

just a product

Demands premium quality

Luxury Seeker Aims to

economize while

brightening life

Less loyal to brands

Hybrid Consumer


Conclusion

Supply Chain


Conclusion

Supply Chain

Innovation

Sustainability


Conclusion

Cost Structure


Conclusion

Competitive Landscape


Conclusion

Market Concentration is High


Conclusion

Top 4 firms

command

74% of the

total market

Substitutes

Consumer preference driven


Conclusion

Revenue Volatility


Conclusion

Price of raw inputs/energy

Consumer demand/disposable income

Monthly

Averages of

Daily Cocoa

Prices

(USD/tonne)

from January

2013-2016

Regulatory Agents


Conclusion

Major Players


Conclusion

4,893M 1,175M

687M 161M

3,543M

195M


Conclusion

Financial Performance

Revenue

Operating

Income

8.2M 1.6M

156K 52.8K

2K 57.3K

10.6M

79.5K

131K


Conclusion

Social Media Performance

Hershey’s Content Analysis

No ads were informative or comparative

No ads used humor, fear, or celebrities

Movie-like

One-brand strategy


Conclusion

M&Ms Content Analysis

100% used humor and featured the M&M characters

None were informative or comparative

Some were specialized for Crispy or Peanut M&Ms

Current Campaigns

• Partner with X-Men Movies

• Celebrating 75 Years

• Pick Your Favorite Flavor


Conclusion

M&Ms Primetime Analysis

Promotes different product lines throughout the year

Featured M&Ms Peanut during 2014 Super Bowl Campaign

0

5

10

15

20

25

30

35

40

45

50

55

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

To

tal

Nu

mb

er

of

Ad

s

Month M&Ms Holidays M&Ms Milk Chocolate M&Ms Peanut


Conclusion

Lindt Content Analysis

Highlighted that chocolate is an experience good

Persuasive in nature – “smooth” & “luscious”

Don’t use humor

Campaign remained the same over 5 years

• Woman tasting chocolate

• Master Swiss chocolatier


Conclusion

Raw Advertising Data Analysis

2014 Prime Time Data

2009, 2010 Full Data


Conclusion

Advertising Data

$70 million spent on 1177 prime time ads in 2014

Mars Inc. spent the most in prime time advertising

Mars54%Hershey

23%

Ferrero 5%

Lindt18%

Merci European

0.2%


Conclusion

Advertising Data

Increase in ad spending as recession ended

$333m

$560m

2009 2010

Ad Dollars Spent

189,482

306,594

2009 2010

Number of Ads


Conclusion

Seasonality

During summer months, drop in both number of ads

and ad dollars spent (in millions)

0

2

4

6

8

10

12

14

16

0

20

40

60

80

100

120

140

160


Mil

lio

n D

oll

ars

Sp

en

t

Nu

mb

er

of

Ad

s

2014


Conclusion

Seasonality

Same trend seen in 2009-2010

0

10

20

30

40

50

60

70

80

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mil

lio

n D

oll

ars

Sp

en

t

Nu

mb

er

of

Ad

s

2009-2010


Conclusion

Seasonality

Compared to Candy

Non-chocolate candy shows different seasonal patterns

0

2

4

6

8

10

12

14

16

0

2000

4000

6000

8000

10000

12000

14000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mil

lio

n D

oll

ars

Sp

en

t

Nu

mb

er

of

Ad

s

2009-2010


Conclusion

Valentine’s Day

Peaks leading up to Valentine’s Days and then drops

0

500000

1000000

1500000

2000000

2500000

0

100

200

300

400

500

600

700

2/1

2/2

2/3

2/4

2/5

2/6

2/7

2/

8

2/9

2/10

2/

11

2/12

2/13

2/14

2/15

2/16

2/17

2/18

2/19

2/20

2/21

2/22

2/23

2/24

2/25

2/26

2/27

2/28

Do

llars

Sp

en

t

Nu

mb

er

of

Ad

s


Conclusion

Halloween and Christmas

No large advertising jump for Halloween, but huge

buildup to Christmas

0

1000000

2000000

3000000

4000000

5000000

6000000

0

500

1000

1500

2000

2500

3000

9/30 10/7 10/14 10/21 10/28 11/4 11/11 11/18 11/25 12/2 12/9 12/16 12/23 12/30

Do

llars

Sp

en

t

Nu

mb

er

of

Ad

s


Conclusion

Gourmet vs. Mass Market

Lindt

Mars Inc.


Conclusion


Seasonality

Gourmet brands advertise much more heavily in the during

the first and last quarters of the year, while mass market

brands advertise consistently throughout the year

0%

5%

10%

15%

20%

25%

0%

5%

10%

15%

20%

25%

30%


Perc

en

tag

e o

f T

ota

l A

d S

pen

d

Perc

en

tag

e o

f T

ota

l A

d C

ou

nt

Month

High End (Lindt) Low End (Mars)


Conclusion


Average Ad Price

2014, Primetime

$60,880

$58,057

Lindt Mars

2009 + 2010

$2,841

$1,767

Lindt Mars


Conclusion

2014 Program Type Proportions:

Mass Market and Gourmet

0%

5%

10%

15%

20%

25%

30%

35%

40%

Mars Hershey Lindt

Primetime Programming:

Mass Market

Mars Top ProgramsHershey’s Top Programs


Conclusion

Primetime Programming:

Gourmet

Lindt Top Programs


Conclusion

2009-10 Programming:

Mass Market

Mars Top ProgramsHershey’s Top Programs


Conclusion

2009-10 Programming:

Gourmet

Lindt Top Programs


Conclusion

Trends and Strategies


Conclusion

Health

Seasonality

Develop Brand

Identity

Recommendations

Major brands should get ahead of the trends

• Health

• Sustainable

Continue to experiment with artisanal ingredients

Further innovate in production, technology, marketing


Conclusion

Documents

The Chocolate Industry - Cornell University presentations... · Why The Chocolate Industry ... brands Hybrid Consumer Industry Overview Content Analysis Raw Data Analysis ... Consumer