The sharp fall that is registering the consumption In general, so far this year there are no exceptions. and the chocolate It is one of the products that is suffering this impact, although to a lesser extent than others for various reasons.
Faced with this situation, companies in the sector they adjust their strategies based on different factors, whether by price or by product, that address consumer behavior in this situation.
“In moments complex and challenging like the current one, we believe that bringing value to the consumer through innovation is a useful tool to break the adverse economic context a little,” said Guillermo Canosa, director of Nestlé Argentina’s Chocolate businesses during an interview with Scope.
As explained by the director of the largest food multinational in the world, “the consumption of chocolate does not escape the reality of the context that Argentina is experiencing today. Today the category, in the annual accumulated drops to double digits, to 15%but when you look at the category in the first quarter I would only give 3 percent of fall.”
Journalist: Why does chocolate consumption fall less than average?
Guillermo Canosa: We know from historical characteristics that chocolate is a very resilient product. The consumer, even in very challenging conditions like the current one, continues to allow himself to indulge. He experiences it as an accessible reward that can still be given as often as he consumes. If you look at the options that exist today for a consumer to treat themselves to something in terms of indulgence, chocolate is clearly one of them.
Q: What penetration do you have in the local market?
GC: It is a category with very high penetration. Seven out of ten households consume chocolates. That fact already marks your strong presence in the market. An average consumer consumes more than three brands per week. And it is very open to novelty. That is where we bet heavily on innovation, branding and investment as a way to help the category continue to develop.
Q: What are the chocolate consumption figures in Argentina?
GC: In Argentina, 900 grams are consumed per capita per year. There are countries in Europe that consume more than 9 kilograms a year. We are very far from that. The same compared to our neighbors, we are a little below Brazil and Chile. That’s why we still see significant growth potential. And that is what the launches of new products that we have been doing this year point to.
Something similar is happening with chocolate to other areas such as coffee, where the consumer has become more specialized. New proposals began to appear, such as our Nescafé or Dolca brands. The same thing happens with chocolate. Consumers are looking for inlays that are not just peanuts, or they want to go for higher cocoa percentages. We believe that there is an opportunity for growth because the consumer still has room to accept new proposals.
Q: What was Nestlé’s strategy in that regard?
This year we launched a new product called Choco Trío and that came to develop a new segment within the category, which we call Chocobakery. It attacks a different segment, which we are not used to having in Argentina, which combines the chocolate bar with a cookie and with filling.
In addition to that launch, we reinforced the entire KitKat variety, which is an iconic brand that we have all over the world. It is the third best-selling chocolate brand, with a lot of history, which we launched in 2015 in Argentina and was quickly accepted.
This year, for the first time in a long time, we launched a new Nesquik flavor that is completely new for us, “cookies and cream”.
We see that the consumer is increasingly specializing or looking for products that go beyond the classic milk chocolate. And we seek to respond to this new demand to strengthen our chocolate business, where we see a large growth opportunity in the short term.
There are formats in European countries where Nestlé is not developed here yet. That is why there is an opportunity to continue working on the development of the category segments. You have to think that in Argentina almost 50 percent of consumption goes through tablets. When we look at proposals, weights, flavors, we see that there are still opportunities.
Q: What prospects do you see for the business for next year?
GC: There are several things that allow us to think that in the medium term the category will resume its growth trend. We see the opportunity to enter with new products and we develop them as the consumer evolves. That is where we believe that through innovation, branding and investment, we can help the category continue to develop.
In chocolates we have been building the portfolio for several years. The slightly larger consumer target has chocolates as an element that first arises when talking about Nestlé. There is a lot of connection between Nestlé and chocolate.
Chocolate is a category that bounces easily. As soon as the economic indicators align a little, it recovers quickly. We saw it in the different moments when there was a crisis. We are optimistic that this is what will happen.
We believe that in the coming months the category should have the necessary conditions to recover the trend it has been showing in the last three years, when we were growing at double digits.
Source: Ambito
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