Note on the U.S. Chocolate Market

In 2000, chocolate was consumed by 81 percent of U.S. adults. Despite the popularity of chocolate in the U.S., many analysts believed that the market was far from saturated, noting that European per capita consumption of chocolate remained considerably higher than that of American consumers. Indeed, retail sales of chocolate in the U.S. had experienced a steady increase in recent years. The total retail value of the U.S. market for chocolate was estimated at $13.7 billion in 2002, a 10.2 percent increase from 1998. U.S. retail chocolate sales were forecasted to grow to $14.5 billion in 2007. Much of this gain in retail value could be attributed to a shift of U.S. consumers towards higher-priced chocolates. In 2002, growth in receipts outpaced volume gains for chocolate candy by 8.7 percentage points over the previous year. The gourmet category was expected to grow as consumers incorporated more expensive gourmet foods into their diets, a trend beginning with the beer, wine, coffee, cheese, and ice cream industries. Two giants dominated: Hershey’s controlled 32.6 percent of the market and Mars had 29.6 percent. Market share was divided among mass-market, gourmet, and cause-related manufacturers. Mass-market chocolatiers were defined as those selling chocolate at less than $10 per pound retail, while gourmet chocolatiers were defined as those selling chocolate at or more than $10 per pound retail.