It’s rather ironic in a way. Here’s the head of Nestlé chocolate operations telling the world that the company needs to increase its percentage of premium chocolate sales.

 

Yet, as Heynike points out, Nestlé’s premium chocolate brands – Perugina in Italy, Caillier in Switzerland and Black Magic in the U.K.– only account for 36% of the confectionery division’s 12.2 billion CHF in sales last year.

 

Still 10 years ago, most consumers in the United States would have associated any kind of chocolate coming from Switzerland as premium. Today, they are more knowledgeable and adventuresome. Their affability and sophistication for premium products have evolved beyond simple country-of-origin designations.

 

For example, in Euromonitor International’s overview on packaged food trends in the United States, the Chicago- and London-based research analysis firm notes that “the marketing efforts of food and beverage manufacturers have turned the U.S. into a nation of ‘foodies’; consumers with sophisticated tastes who seek out the best. Today, Americans like to perceive themselves as having good taste, whether it is in food, coffee, wine or spirits. Fewer consumers may actually know how to cook, but many pride themselves on their knowledge of food.”

 

According to figures published by AC Nielsen, the premium chocolate category in the US grew by 24% in 2006, compared with overall growth in the chocolate market of 3.9%. But what determines premium? Is it merely price? While marketers would go on about sourcing of ingredients, methods of processing and devotion to the art of chocolate-making, the U.S. confectionery industry generally defines premium chocolate as product selling over 50¢/ounce ($8/pound), although some manufacturers and data suppliers may use a different threshold.

 

According to a Packaging Facts report on chocolate in the United States, the premium chocolate sub-category can be divided into three segments: everyday gourmet or affordable luxury ($8.00–$15.99/lb), upscale premium ($16.00–$23.99/lb) and super or über-premium ($24.00/lb and over).

 

As the report points out, “The everyday gourmet segment acts as an entry port for consumers desiring to upgrade their tastes from budget-priced, and often overly sweet, mass-marketed products. The next segment is upscale premium chocolate, which is sold through company-owned stores and kiosks, specialty stores and some Web sites. As consumers’ preferences have become more sophisticated and they have become more willing to pay higher prices for their chocolate fix, they have spawned the super or über-premium segment. Such chocolate starts at $25 per pound and can climb to $100 per pound at exclusive chocolate boutiques.”

 

The premium sub-category as a whole thrives on dark chocolate, origins of cocoa beans and inclusions of healthy and alluring ingredients ranging from nuts and cranberries to more exotic additions such as lavender and blood orange. Product claims usually tout natural or organic labels as well as Fair Trade sourcing. Packaged Facts estimates that $2.7 billion of premium chocolate was sold in 2006. The premium segment accounts for 16.9% of the total chocolate market, up from 13.3% in 2002. Over the past five years, sales of premium chocolate have grown almost four times the rate of conventional chocolate (8.1% versus 2.1% CAGR respectively). In fact, the growth rate for premium chocolate has remained buoyant, as compared with the down-trending growth rate of conventional chocolate. Packaged Facts believes that demand for premium chocolate will continue as a leading growth trend in the U.S. chocolate industry.

 

Accordingly, by 2011 premium chocolate sales will expand to 25% of the market, up from 16.9% in 2006, and generate $4.5 billion in sales.

 

The upsurge hasn’t escaped chocolate manufacturers’ notice. Product premiumization claims (“upscale” and “gourmet”) – as tracked by ProductScan – accounted for 37% of all claims of the leading new introductions (Top 20) for chocolate candy products.

 

Companies such as Mars Snackfood, Lindt, Ghiradelli and Russell Stover have been particularly active in introducing a broad range of premium chocolate products.

 

Hershey, which acquired smaller fine chocolate operations such as Joseph’s and Dagoba, launched its Bliss product earlier this year to join the fray.

 

Moreover, many small and midsized chocolate manufacturers are also providing U.S. consumers with more options than anyone thought possible several years ago.

 

And the premium trend isn’t going away, despite anxiety about the economy. In the 52 weeks ended Jan. 26, total U.S. packaged chocolate sales rose 4.2%, according to Nielsen Co., but premium chocolate sales rose 28.5% and dark chocolate sales rose 28.9%.