• The Market
• Product Positioning
• Two Product Categories
• Sales at $740 Million in 1997
• Eating Chocolate Sets the Pace
• Positive Factors to Market Growth
• Negative Factors to Growth
• Sales to Surpass $16 Billion in 2002
• Table 1-1: The US Market for Gourmet Chocolate: Retail Sales by Category, 1993-2002 (dollars): Eating Chocolate, Baking Chocolate

The Marketers

• Making vs Marketing Chocolates
• Marketers of Eating Chocolates: Artisans to Conglomerates
• Several Eating Chocolate Tiers
• Old-Line Baking Chocolate Marketers Produce Their Own
• Three Baking Chocolate Tiers
• Organic Chocolate Marketers
• Godiva Leads in Eating Chocolates
• Lindt Leaps to Second Spot with Ghirardelli Purchase
• A Quiet Market Awakens
• The Young and the Idealists
• Europe Sends Reinforcements
• For Some, Smaller Is Better
• Consumer Tastes Darken
• Godiva Tops Ad Spending at Over $5 Million
• Trade Shows Key

Distribution & Retail

• Three Possible Routes
• Warehousing
• Distributors Handle 30% of Gourmet Chocolates
• Retail Outlets Old and New
• Two-Thirds of Sales Through Third-Party Retailers
• Figure 1-1: Share of US Sales of Gourmet Chocolate by Retail Sector, 1997 (percent): Class Retailers, Mass Retailers, Marketer-to-Consumer Sales
• Mark-Ups at 95%-150%
• Price Tiers for Eating Chocolates
• Price Tiers for Baking Chocolates

The Consumer

• Mass-Market Brands Outrank Gourmet Brands
• Godiva Tops Gourmet Brands with 13% Draw
• Gourmet Brands Post Lower Median Ages
• See's Rivals the Gourmet Brands
• Most Buy Boxed Chocolates as Gift
• Gourmet Brand Demographics Are Strikingly Uniform
• Race and Socio-Economic Factors Strongest
• Indicators Upscale for All Gourmet Brands
• Resisters Also Share Traits

Scope and Methodology

• Market Parameters
• Report Methodology

II The Market

• Scope of Report
• Gourmet Chocolates Sold at Retail

Historical Background

• Olmec Initiate Consumption of Cacao
• Spaniards Adapt Chocolat
• Chocolate Coats Europe
• Chocolate Inspires Adulation
• Product Developments Await 19th Century
• Van Houten Invents Dutching
• Fry & Sons Innovations
• Milking Chocolate
• Enter Hershey
• Mass-Market vs Gourmet Chocolates
• Rediscovering Chocolate
• Chocolate Goes Organic

Product Definition

• Lack of Industry Definition
• Chocolate Manufacture
• Cocoa Powder
• Chocolate
• Styles of Chocolate
• Product Quality: Three Factors
• Product Positioning

Product Classifications and Categories

• Federal Classification of Chocolates
• Table 2-1: US Department of Commerce Classifications of Chocolate Candy (6 Types)
• Two Product Categories
• Eating Chocolates
• Baking Chocolates

Product Packaging and Labeling

• Packaging Is Key
• The Gold Standard
• Keepsake Packaging Popular Among Higher-End Marketers
• Labels Make the Point

Market Regulation

• Chocolate Depends on the Country
• US Standards of Identity
• A Fine Line
• FDA Considers Substitutes
• FDA Proposes Standard for White Chocolate
• European Standards
• The Importance of Being Swiss
• Figure 2-1: Estimated US Retail Sales of Gourmet Chocolate: Eating Chocolate vs Baking Chocolate, 1993-1997 (dollars)

Market Size and Growth

• Sales at $740 Million in 1997
• Table 2-2: Estimated US Retail Sales of Gourmet Chocolate: Eating Chocolate vs Baking Chocolate, 1993-1997 (dollars)
• Eating Chocolate Sets the Pace

Market Composition

• Eating Chocolates Claim 94% of Sales
• Figure 2-2: Share of US Retail Sales of Gourmet Chocolate: Eating Chocolate vs Baking Chocolate, 1997 (percent)
• Sales by Retail Channel: Class vs Mass
• Figure 2-3: Share of US Sales of Gourmet Chocolate by Retail Sector, 1997 (percent): Class Retailers, Mass Retailers, Marketer-to-Consumer Sales
• Boxed Chocolate: Gift-Giving vs Self-Indulgence
• The Hot Chocolate Holidays
• Summer Meltdown

Factors Affecting Market Growth

• Market Still Immature
• Back to the Good Times
• The Ripple Effect in Gourmet Goods
• When Martha Speaks
• Ingredient Consciousness Spurs Growth
• Retailers Commit to Gourmet Chocolate
• The Benefits of Impulse-Buy Packaging
• Chocolate in a Graying America
• Table 2-3: Projections of US Households by Age of Householder, 1997-2002 (number and percent): From Age Under 25 to Age 75 and Older
• Figure 2-4: Projected US Retail Sales of Gourmet Chocolate, 1997- 2002 (dollars)

Projected Market Growth

• Sales to Surpass $16 Billion in 2002
• Table 2-4: Projected US Retail Sales of Gourmet Chocolate: Eating Chocolate vs Baking Chocolate, 1997-2002 (dollars)
• Eating Chocolates to Level Off at 18% Growth
• Baking Chocolates to Reach $80 Million

III The Marketers

• The Marketers
• Several Hundred Marketers of Gourmet Chocolates
• Making vs Marketing Chocolates
• Marketers of Eating Chocolates: Artisans to Conglomerates
• Several Eating Chocolate Tiers
• Old-Line Baking Chocolate Marketers Produce Their Own
• Three Baking Chocolate Tiers
• Organic Chocolate Marketers
• Mass-Marketer Participation Limited
• Table 3-1: US Gourmet Chocolate Market: Selected Marketers and Brands (193 Marketers)

Marketer Shares

• Limited Marketer Share Information Available
• Godiva Leads in Eating Chocolates
• Lindt Leaps to Second Spot with Ghirardelli Purchase
• Market Share by Consumer Use
• Table 3-2: Customer Base for Gourmet Boxed Chocolates by Brand,
• 1997 (number and percent): Godiva, Perugina, Lindt

Brand Ratings

• Rankings Are Risky Business
• Van Leer Tops Cook's Baking Chocolate Taste Test
• Van Leer Also Ranks First with Cocoa Powder
• Merckens Tops Cookbook Review Bittersweet/Semisweet Test
• Nine US Eating Chocolate Marketers Judged "World Class"
• Burdick Wins Consumer Reports Review of Boxed Chocolates

The Competitive Situation

• A Quiet Market Awakens
• The Young and the Idealists
• Europe Sends Reinforcements
• For Some, Smaller Is Better
• Competition from the Middle-Roaders
• The Case of See's Candies
• Supermarkets Compete on Price

Competitive Profile: Ferrero USA, Inc (Ferrero SpA)

• Company Overview
• Ferrero Rocher
• Upscale Image, Mass Distribution
• Two Products, Multiple Packages

Competitive Profile: Ghirardelli Chocolate Co (Lindt & Sprüngli AG)

• Company Overview
• An Oft-Traded Company
• Chocolate Products
• Other Products
• Eastward Expansion
• Making Chocolates On-Site

Competitive Profile: Godiva Chocolatier (Campbell Soup Co)

• Company Overview
• Retail Growth to Continue
• Godiva Chocolates for US Consumers
• Other Godiva Products
• Godiva Boutiques
• Packaging Focus
• Investment in Direct Marketing
• Investment in Advertising

Competitive Profile: Joseph Schmidt Confections, Inc

• Company Overview
• The Truffle
• Fine Stores Everywhere

Competitive Profile: Lindt & Sprüngli (USA), Inc (Lindt & Sprüngli AG)

• Company Overview
• Growth in the United States
• Lindt Chocolates

Competitive Profile: Moonstruck Chocolatier

• Company Overview
• Large Retail Expansion Planned
• Moonstruck's People
• Following Footsteps
• Moonstruck as Chocolatier
• Chocolate Innovations
• Moonstruck's Packaging
• Distribution

Competitive Profile: Perugina Brands of America (Perugina SpA)

• Company Overview
• Baci and Beyond
• Perugina's Packaging

Competitive Profile: Seattle Chocolate Co

• Company Overview
• Truffles
• Seattle Chocolate Truffles
• Dessert Shells
• Truffle Bars
• Private Label
• Young Firm Goes Abroad

Competitive Profiles: Other Marketers

• LA Burdick Chocolate
• Ethel M Chocolates
• Fran's Chocolates Ltd
• Guittard Chocolate Co
• Hawaiian Cocoa Chocolate Co
• Organic Commodity Project
• Scharffen Berger Chocolate Maker

Product and Packaging Trends

• Consumer Tastes Darken
• New Flavors
• Chocolate Coats and Dips
• Chocolate with a Conscience
• Chocolate Without Sugar
• New Baking Chocolates Relatively Rare
• % Marks the Top
• Packaging Goes Upscale
• Marketers Strengthen Impulse Offerings
• Table 3-3: Selected New Product Introductions in the US Gourmet Chocolate Market, 1995 -Spring 1998

Consumer Advertising and Promotion

• Godiva Tops Ad Spending at Over $5 Million
• Advertising Highest During Chocolate Holidays
• Magazines Most Popular Media
• Ferrero on Television
• Godiva Online
• Single Product Focus
• Positioning Favors Lifestyle
• Godiva as the Ultimate
• Ferrero on the Luxurious Life
• Ferrero on Relationship Management
• Product Announcements as Promotions
• The Choose Chocolate Campaign
• Chocolate Events
• Salon du Chocolate
• Recipes for Success
• Godiva as Charge-Card Reward
• Chocolates & Diamonds
• Perugina Takes Flight
• Sampling: Effective But Costly
• Limited Use of Coupons
• Examples of Consumer Promotions

Trade Marketing and Promotion

• Trade Advertising Outweighs Consumer Advertising
• Trade Shows Key
• As Are Trade Publications
• Focus on Consumer Appeal
• Examples of Trade Advertisements

IV Distribution & Retail

• At the Distribution Level
• Three Possible Routes
• Some Marketers Use All Routes
• Warehousing
• Distributors Handle 30% of Gourmet Chocolates
• Distributor Functions
• Gourmet Chocolates Lucrative for Distributors
• C&T Distributors
• Specialty Food Distributors
• Candy Brokers
• Broker Services to Retailers

At the Retail Level

• Retail Outlets Old and New
• Two-Thirds of Sales Through Third-Party Retailers
• Accommodating the Range of Retailers
• Mark-Ups at 95%-150%
• Prices at 25˘ to $70 Plus
• Price Tiers for Eating Chocolates
• Price Tiers for Baking Chocolates
• The Status Exchange at Class Outlets
• Baiting the Department Store Counter
• Elite Brands for Gourmet Stores
• Williams-Sonoma Cookware Stores
• Starbucks Poaches on Chocolate
• To Brand or Not to Brand
• Coffee/Chocolate Synergy
• Organic/Chocolate Synergy
• Warehouse Clubs Emphasize European Brands
• Without Ignoring Domestic Chocolatiers
• Selections Expand Seasonally
• Supermarkets Check In
• Beyond the Candy Aisle
• Marketers Encourage Supermarket Interest
• Marketers Establish Presence with Boutiques
• Location Tops Marketers' Concerns
• Geographic Strategies Vary
• European-Style Service
• Self-Service
• Modern Design
• Mall Kiosks
• Outlet Stores
• Putting the Process on Display
• The Direct Marketing Advantage
• Supporting Sales with Seasonal Catalogs
• Third-Party Mail Order
• World Wide Web Is Fastest-Growing Channel
• Budget Retailing for Deluxe Products
• Table 4-1: Typical US Retail Prices for Selected Gourmet Chocolate
• Products

V The Consumer

• The Consumer
• Note on Simmons Market Research Bureau
• Range of Data
• Almost Half of US Adults Buy Boxed Chocolate
• Asian Americans Are Most Likely Purchasers
• No Groups Immune to Chocolate
• Mass-Market Brands Outrank Gourmet Brands
• Godiva Tops Gourmet Brands with 13% Draw
• Gourmet Brands Post Lower Median Ages
• See's Rivals the Gourmet Brands
• Most Buy Boxed Chocolates as Gift
• Inverse Relationship Between Gifts and Indulgences
• Demographic Profiles by Brand
• Gourmet Brand Demographics Are Strikingly Uniform
• Race and Socio-Economic Factors Strongest
• Indicators Upscale for All Gourmet Brands
• Other Common Indicators
• Resisters Also Share Traits
• Godiva Purchasers Prototypical
• Broad Group of Resisters
• Males Not Included
• Perugina Purchasers Upscale, Female
• Occupational Nuance to Perugina Purchasers
• The Once-Married Resist Perugina
• Lindt Buyers Upscale, Single
• Lindt Resisters Include Southerners
• Ethel M Indicators Also Upscale, Yet More Diverse
• The Usual Resisters for Ethel M—Excluding Men
• Wider Variety of Indicators for Mass-Market Chocolate
• Living in Northeast the Most Common Indicator
• Resisters Share More Traits
• Demographic Variations by Reasons for Purchase; Godiva Self-Indulgers
• Are Younger, Female
• Perugina: More Indicators for Gift Purchase
• Lindt: Almost Uniform Profile for Gift-Giving and Personal Use
• Westerners Are Indicators for Ethel M Gifts
• Table 5-1: Demographic Characteristics Favoring Purchase of Boxed Chocolates, 1997 (US Adults)
• Table 5-2a: Consumer Overview for Boxed Chocolates by Brand, 1997 (number and percent): 10 Brands
• Table 5-2b: Consumer Overview for Boxed Chocolates by Brand: Median Age and Median Household Income, 1997 (US Adults): 10 Brands
• Table 5-3: Purchase of Boxed Chocolates by Brand: Gift vs Personal Use, 1997 (US Adults): 10 Brands
• Table 5-4a: Demographic Characteristics Favoring Purchase of Gourmet Boxed Chocolates by Brand: Godiva vs Perugina, 1997 (US Adults)
• Table 5-4b: Demographic Characteristics Favoring Purchase of Gourmet Boxed Chocolates by Brand: Lindt vs Ethel M, 1997 (US Adults)
• Table 5-5a: Demographic Characteristics Favoring Purchase of Mass-Market Boxed Chocolates by Brand: Russell Stover vs Whitman's, 1997 (US Adults)
• Table 5-5b: Demographic Characteristics Favoring Purchase of Mass-Market Boxed Chocolates by Brand: Cadbury vs See's, 1997 (US Adults)
• Table 5-5c: Demographic Characteristics Favoring Purchase of Mass-Market Boxed Chocolates by Brand: Fannie Farmer vs Barracini, 1997 (US Adults)
• Table 5-6a: Demographic Characteristics Favoring Purchase of Godiva Boxed Chocolates: Gift vs Personal Use, 1997 (US Adults)
• Table 5-6b: Demographic Characteristics Favoring Purchase of Perugina Boxed Chocolates: Gift vs Personal Use, 1997 (US Adults)
• Table 5-6c: Demographic Characteristics Favoring Purchase of Lindt Boxed Chocolates: Gift vs Personal Use, 1997 (US Adults)
• Table 5-6d: Demographic Characteristics Favoring Purchase of Ethel M
• Boxed Chocolates: Gift vs Personal Use, 1997 (US Adults)

Appendix I: Examples Of Consumer And Trade
Advertising And Promotions I-1

Appendix II: Addresses Of Selected Marketers II-1