27th March, 2018
You can tell what trends are dominating the hospitality field by what people are stuffing themselves with this weekend – and it’s generally good news for smaller operators.
IBISWorld recently released a report on the state of the Australian chocolate industry, and gave a few predictions on what the Easter sales period could hold.
Australians are spending less per capita on Easter chocolate than we have for about three to four years. What’s more, the growth rate in Easter sales is the weakest it’s been for at least five years.
Are we falling out of love with stuffing our gobs full of chocolate as we laze around the house in a sugar coma?
As it turns out, the chocolate industry is being affected by the ‘premiumisation’ of tastes in the Australian market.
We’re increasingly health-conscious, so we’re spending less on cheap chocolate and instead diverting that cash towards premium brands such as Haigh’s and Lindt.
Australians are still expected to buy most of their Easter chocolate from the big supermarket chains, but even then people are opting for dark chocolate – which is seen as healthier.
If health is becoming a consideration for Easter eggs of all things, then it follows that people are generally looking for healthy options.
Preparing fresh healthy ingredients costs more than mass-produced food – which may not be so healthy. The good news is that people are willing to pay more for healthier options.
The report says that “…dark chocolate products have grown as a proportion of industry revenue over the past five years, with consumers becoming increasingly aware of the health benefits of the antioxidants in cocoa”.
It goes on to say that “[c]onsumers tend to understand that the health benefits of these products will often come at a higher price. Consequently, consumers are generally more willing to pay a premium for these products.”
Big operators have enjoyed a price advantage due to their economies of scale.
But now consumers are showing that factors beyond price are playing an increasing part in their purchasing decision, which means the canny smaller operator could get a bigger slice of the pie.
The report also found that ethical considerations were becoming increasingly important for consumers, even when it came to things like Easter eggs.
“More operators are working with suppliers that are registered under the fair-trade logo or purchase all raw materials from a single source,” the report read.
“Products that fall under these categories usually include a backstory about sourcing and are generally seen as an ethical and sustainable way to purchase industry products.”
Ethical sourcing is becoming big business.
Making sustainable and ethical practices in supply chains more visible means consumers are now more likely to buy a product that satisfies ethical standards.
Previously, ethical considerations only really came into play when there were two products of similar price point competing for the one decision.
But Ibis World thinks the dial (at least where chocolate is concerned) may have shifted.
“Consumers are generally more willing to pay a premium for a product that has an interesting narrative and an ethical backstory,” it said.
Being nimble and being able to demonstrate ethical supply lines were once thought to be really nice things to have for smaller operators, but price point is where the rubber met the road.
But if what we’re shoving into our faces this weekend is any guide, Australian consumers are now less consumed by price and more interested in quality.