A new flavour is the top factor that would tempt buyers to a new chocolate product. This makes investment in new product development (NPD) an imperative for chocolate brands, even as they face a severe economic downturn and a pressing need to cut costs.

The disruption caused by the COVID-19 outbreak has hit the high-value seasonal and assortment segments and impulse formats in the first half of 2020, expected to continue in the second half. The volume loss is estimated to be largely offset by an uplift in at-home snacking. This shift and discounting are dragging down average prices. The market is estimated to post volume growth of just 0.3% in 2020 to 526m kg, with value sales falling by 0.3% to £5.4bn.

Lessons from the 2008-09 recession show continued growth in spend on chocolate even as overall consumer spending fell, though a price-led mindset will see chocolate brands face greater scrutiny to prove their value.

The COVID-19 outbreak has put a spotlight on health and the nation’s obesity epidemic, making healthy dietary choices a higher priority for consumers and the government alike. This focus will put pressure also on chocolate. However, interest in lower-sugar variants signals promising potential for successful NPD in this space to keep consumers engaged.

Mintel also sees potential for the premium segment to shine; as such, chocolate is seen widely as an affordable luxury. Formats offering accessible price points will be key to unlocking this interest.

• The impact of COVID-19 on consumer behaviour and market dynamics in the chocolate confectionery market.

• How the market will fare post-COVID-19.

• The value of main segments and leading brands’ performance in 2019.

• The key new product development trends in the market.

• Attributes that would prompt shoppers to buy a new chocolate product.

• Consumer behaviour and attitudes towards chocolate confectionery.

This Report examines the UK retail market for chocolate. The market size includes sales through all retail channels including direct to consumer. The market size comprises packaged chocolate confectionery products, including the following segments:

• Chocolate confectionery: this comprises all solid chocolate or chocolate-covered confectionery, including block chocolate up to 400g in weight, chocolate straight lines, chocolate-filled bars and chocolate confectionery variety packs not targeted for special occasions or gifting.

• Chocolate assortments: this includes assortments, large bags, large boxes, tins and jars. The segment also includes a small portion of sales of non-chocolate items and excludes seasonal products.

• Seasonal chocolate: this includes confectionery for seasonal occasions such as Christmas, Easter and Valentine’s Day. The segment also includes a small portion of sales of non-chocolate items.

The market size excludes unpackaged chocolate, chocolate biscuits (such as Cadbury Fingers), cakes and cake bars including wafers, cocoa powder and chocolate drinks. It also excludes sales via catering or foodservice establishments, however, references and comparisons to these sectors may be made where relevant.

This update on the impact that COVID-19 is having on UK consumers was prepared on 15 July 2020.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March. A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March.

On 10 May, 2020, the Prime Minister announced revised guidance, recommending that people who could not work from home should return to the workplace, and giving people more scope to spend time out of the home. Further relaxations to lockdown rules were announced in the week of 23 May, including gradual reopening of non-essential retailers, and increased opportunities for social interaction across households. Hospitality businesses and other public places were allowed to reopen from 4 July.

Our economic assumptions are based on the illustrative scenario included in the Bank of England’s Monetary Policy Report, released on 7 May 2020. The scenario suggests that UK gross domestic product (GDP) could fall by 14% in 2020, recovering by 15% in 2021, and that unemployment will reach 8% by the end of the year, easing slightly to 7% by the end of 2021. The current uncertainty means that there is wide variation on the range of forecasts, however, and the numbers presented in the BoE’s illustrative scenario are at the more pessimistic end of the spectrum.