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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Supply Chain
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Supply Chain
Innovation
Sustainability
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Cost Structure
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Competitive Landscape
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Market Concentration is High
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Top 4 firms
command
74% of the
total market
Substitutes
Consumer preference driven
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Revenue Volatility
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Price of raw inputs/energy
Consumer demand/disposable income
Monthly
Averages of
Daily Cocoa
Prices
(USD/tonne)
from January
2013-2016
Regulatory Agents
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Major Players
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
4,893M 1,175M
687M 161M
3,543M
195M
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Financial Performance
Revenue
Operating
Income
8.2M 1.6M
156K 52.8K
2K 57.3K
10.6M
79.5K
131K
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Raw Advertising Data Analysis
2014 Prime Time Data
2009, 2010 Full Data
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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%
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
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
2014
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Gourmet vs. Mass Market
Lindt
Mars Inc.
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Gourmet vs. Mass Market
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%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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)
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Gourmet vs. Mass Market
Average Ad Price
2014, Primetime
$60,880
$58,057
Lindt Mars
2009 + 2010
$2,841
$1,767
Lindt Mars
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Primetime Programming:
Gourmet
Lindt Top Programs
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
2009-10 Programming:
Mass Market
Mars Top ProgramsHershey’s Top Programs
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
2009-10 Programming:
Gourmet
Lindt Top Programs
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion
Trends and Strategies
Industry Overview Content Analysis Raw Data Analysis Recommendations &
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
Industry Overview Content Analysis Raw Data Analysis Recommendations &
Conclusion