Chocolate confectionary - 2 Flashcards
1
Q
How do Mondelez rely on emerging economies?
A
- For Mondelez in 2016, nearly 75 percent of revenues came from outside North America.
- among emerging markets, the BRICs (Brazil, Russia, India and China) are some of the most important countries.
2
Q
How do Mondelez impact emerging economies such as India?
A
- Mondelez have 5 manufacturing sites in India and employ around 4,500 people creating a revenue of $750 million in 2016.
- The chocolate market increased revenue growth within emerging countries such as India at a time when India’s goods & services tax resulted in trade disruption.
- the CEO of Mondelez said conditions in emerging markets were gradually improving.
3
Q
How do emerging economies like India react to the impact of Mondelez?
A
- Asia and Africa are now contributing to nearly 30 per cent of Mondelez global revenue, second only to Europe, which gives 40 per cent.
- The Indian market is now dominated by a growing popularity of indulgent chocolates.
4
Q
How is the Chocolate market growing in emerging economies?
A
- Asia has the fastest growing industrial chocolate market with a compound annual growth rate of 4.33%, China and India are the key revenue generating countries in the region.
- The large consumer base balances the low per capita consumption.
5
Q
Who are the major players in China and how have they impacted the economy?
A
- In 2014, the chocolate market in China generated sales worth approximately USD 3.2 billion and is projected to grow to USD 4.4 billion by 2020.
- It’s the multinational players which dominate China’s chocolate market.
6
Q
Who are the market leaders in China?
A
- In 2013 Mars Foods was the leader followed by Nestle and Ferrero Rocher.
- Mars continued leading the market in 2014, but lost share marginally to the other two leading players.
- The poor performance of local chocolate brands can be attributed primarily to poor marketing efforts.
7
Q
How are emerging economies related to the rise in cocoa prices?
A
- emerging economies such as India had forecasted chocolate sales growth of 13.9% in 2014.
- developing countries share of the global market increased from 33% in 2004 to 45% in 2014.
- this could be why the cocoa prices are rising.
8
Q
What does CSR mean to Ferrero and how do they show CSR?
A
- For the Ferrero Group, the term corporate social responsibility has always stood for caring for people and for the local area, namely employees and former employees, consumers, families and the local communities in which it operates.
- Two of the key initiatives covered in the UK chapter of the report are our flagship programme Kinder + Sport, and our commitment to sustainability.
9
Q
What is the Kinder + Sport project by Ferrero?
A
- Kinder + Sport is a global project, designed to encourage active and balanced lifestyles, particularly in children.
- helped over 100,000 children in England, Wales, Scotland and Ireland to get moving and delivered more than 190,000 hours of activity and nutrition courses to children all over the country.
- 28 countries in total were involved in the programme with 4.4mil kids participating in events.
10
Q
Why did Hershey decide release their first CSR report?
A
- Hershey released their first corporate social responsibility report in attempt to increase transparency and accountability, stating that they wanted to “reimagined [their] corporate brand, with a clean, modern identity.”
11
Q
What social trends have influenced the chocolate confectionary market?
A
- artisan manufacturers are thriving due to greater health awareness causing consumers to purchase high quality niche products rather than mass produced chocolate.
- the 12 biggest names in chocolate lost £78 million in the past year (Cadbury sales have dropped 4.2% for example), demonstrating that there is declining demand for the mass-produced and marketed chocolate.
12
Q
Why have the sales of company Hotel Chocolat improved over recent years and how are mass market brands copying them?
A
- Hotel Chocolat - one of the most popular high-quality manufacturers, saw profits increase by 100% over the past year.
- In response to greater health awareness and sugar consumption, brands, such as Hotel Chocolat, have installed neon signs that read ‘more cocoa, less sugar’
- The mass market brands may attribute their decision to make serving sizes smaller to not only cost-cutting, but also the perception that a smaller bar will be healthier. For example, Mars announced that all single serving products will be capped at 250 calories, which meant that Twix bars were downsized from 58g to 50g.
13
Q
How have changing consumer tastes impacted the chocolate market and how have manufacturers responded to this?
A
- Consumers have become tired of the standard, general tasting Cadbury’s Dairy Milk.
- For example, the ‘Grown-up chocolate company’ allows customers to use a website to create their own bars with flavours to match their changing tastes.
- In response to this, mass market brands, such as Cadbury have introduced their ‘Marvellous Creations’ range that responds to the increasing demand for unconventional or unique flavours in chocolate bars.
14
Q
How has health awareness impacted the chocolate market and how has the market responded?
A
- Over the past 20 years healthy food has become much more popular which has negatively impacted chocolate manufacturers.
- Protein producers such as Myprotein and Phd nutrition have entered the chocolate market with protein chocolate bars due to their association with health
- this has caused the market to become more saturated.
- this is why top manufacturers such as mars chose to release protein incorporated products such as Mars protein, Snickers protein, Milkyway protein and Bounty protein in an attempt to cover the growing healthy eating trend.
- Handmade chocolate is also growing in demand because of the assurance that the produce claimed to be used is trusted.
15
Q
How are changing costs impacting the chocolate confectionary market?
A
- Raw materials such as cocoa, palm oil and sugar are becoming expensive as consumption is exceeding the production.
- the deficit of cocoa is also likely to grow due to climate change which will increase temperature, demanding larger supplies of water in countries such as Ghana and Cote D’ivoire where there are water shortages.
- Ghana and Cote D’ivoire produce 70% of the worlds cocoa and studies suggest that even in recent years there has been a dip in production.
