Consumer Insights

Chocolate
Empowering Manufacturers and Retailers for Category Growth 1
The NPD Group


SymphonyIRI

The Futures Group


The Capre Group

NCA Sweet Insights
Contributing Partners
2
Insights uncover category
opportunities
Why NCA Sweet Insights?
3
Brands offers category
solutions
Who is the consumer, why do we care?
4
eating
The consumer determines your success or failure
The Shopper = Buyer of product The Consumer = individual who eats product
Category
5
Chocolate
Better Understanding of the Chocolate Consumer
6
Objective
Allows us to better meet consumer needs
Benefit
7
Helps us to identify
opportunities
?
THE CONSUMER
8
Chocolate consumer demographics:
Chocolate consumers live:
South
40%
Midwest
24%

Northeast
18%
West
22%
Source: NCA & The Futures Company, 2012
Chocolate consumer demographics: In general
Chocolate consumers are primarily:

70% - white (Non-Hispanic)
53% - married
53% - employed
43% - have children under 18
28% - college or higher degrees
24% - household income > $100,000

Source: NCA & The Futures Company, 2012
Chocolate consumer demographics: Gender
Females tend to eat more chocolate
89% of women eat some chocolate,
as compared with 85% of males;

Among daily chocolate eaters, 57%
are females and 43% are male;

Those who never eat chocolate, 55%
are male and 45% are females.
Source: NCA & The Futures Company, 2012
41%
59%
Confections
None
Americans Love Chocolate The Average
American Consumes Chocolate Twice per Week
12
In an average day, 41% of the population
consumes confections at least once
almost half consume chocolate daily
Average American chocolate
consumption
107 Times per year
Approximately Twice
per Week
Daily Confections Penetration
Annual Eatings per Capita
Source: NPD Snack Track 2.1 2010
Adults are the Primary Consumers of Chocolate
with over 113 per person per year
13
Adults 18-
44
33%
Adults 45-
64
31%
Adults 65+
17%
Children
19%
Adults are the primary consumers
of chocolate, accounting for 81%
of eatings
Accounting for 113 eatings per
capita in 2010, 6% above
average for all consumers
107
113
All consumers Adults
% of Eatings
Annual Eatings per Capita
And, the most important, fastest
growing segment of adults is growing
Source: NPD Snack Track 2.1 2010
Chocolate Consumption Frequency
87% of adults, and 86% of
children eat chocolate.

40% of adults, 42% of
children eat chocolate only
once or more per week

1/3 of adults and children
eat chocolate once less
than once per week
6%
10%
24%
14%
34%
13% 5%
7%
24%
17%
33%
14%
0%
5%
10%
15%
20%
25%
30%
35%
40%
More than
once a day
Once a day A few times a
week
Once a week Less than once
a week
Do not eat
Adults Children
Source: NCA & The Futures Company, 2012
Chocolate is consumed in
moderation
The 45+ Group has the Highest Level of Per
Cap Consumption and this Group is Increasing
15
Per capita consumption is off
among all groups in 18-44 year
old range
113
116
119
123
45-54 55-64
2006 2010
Adults 45-64 have high per
capita consumption and are
trending up
123
117
112
113
101
94
18-24 25-34 35-44
2006 2010
Annual Eatings per Capita Annual Eatings per Capita
Source: NPD Snack Track 2.1 2010
Teens
7% of population
7% of chocolate eatings
Teens Eat Their Fair Share of Chocolate and
Consumption is Trending Up
16
103
118
Teens 13-17
2006 2010
Teens
7%
Candy
Bars
35%
Fun
Size/
Mini
24%
Pieces
29%
Unknown
12%
% of Teen 13-17 Eatings
Annual Eatings per Capita
Consumption has increased in the
past 5 years
For Teens, candy bars are dominant package,
followed by pieces and fun size/mini
Source: NPD Snack Track 2.1 2010
15%
13% % of population
% of chocolate eatings
Despite Common Perception, Children Consume
Less Than Their Fair Share of Chocolate
17
93
100
84
100
Children 2-5 Children 6-12
2006
2010
Consumption has Decreased Among 2-5 Year Olds
and Held Flat for 6-12 Year Olds
% Share of Children less Than 13 Years Old
Annual Eatings per Capita
Childrens consume
13 % less than their
fair share of
chocolate
Source: NPD Snack Track 2.1 2010
Consumers increase their consumption of Dark
Chocolate as they get older
Taste Profiles Evolve with Age
18
Dark
Chocolate
29%
Milk
Chocolate
71%
Dark
Chocolate
15%
Milk
Chocolate
85%
Dark
Chocolate
12%
Milk
Chocolate
88%
Teens 13-17
Adults 18-44 Adults 45+
Milk vs Dark Chocolate Candy/Bars Consumption
% of Eatings
Source: NPD Snack Track 2.1 2010
The Consumer
What Does All This Mean?
19
SO WHAT
Targeting specific age groups provides the opportunity to uniquely meet
the needs of each group.
Reversing 18-44 year-old consumption declines is essential to the long-
term health of the chocolate segment.
The high per capita consumption among adults 45+, which is also the
fastest growing segment of the population, is a strong growth indicator for
the chocolate segment.
The growth in teens consumption provides an opportunity. Teens can help
stem the declines of the 18-44 age group if their consumption and growth
can be sustained as they move into adulthood.
Mom is the gatekeeper and any potential concerns about chocolate must
be addressed.
Consumption occasions
20
Close to three-fourths of chocolate is
consumed at home
Chocolate is Primarily Eaten at Home
21
At Home
71%
Away
29%
Away from home 29%
At work 12%
In a car/plane/other trans 6%
Other 11%
% of Eatings
Most Away From Home consumption
takes place at work and while traveling
% of Eatings
Source: NPD Snack Track 2.1 2010
Chocolate Consumption Promotes Pro-social
Behavior
Activities and events accomplished in a typical week by adult
moderate chocolate eaters vs. those who dont eat chocolate:
13% more time with
friends

18% more time with
family

14% more time with
food

Socializing with friends
Family activities
Food purchase & prep
81%
65%
62%
67%
47%
49%
40% 50% 60% 70% 80% 90%
Never
Never
Never
Moderate
Moderate
Moderate
Source: NCA & The Futures Company, 2012
32
17
9
3
1
4
10
Watching TV
Nothing in particular
On the Internet
Watching DVDs
Playing / watching a sport
Eating a meal
Work/School Activities
61%
Relaxing Activities
Chocolate Lends Itself to Being a Relaxing Treat
23
All Relaxing Activities Account for 61% of Chocolate
Eatings Versus the Confections Average of 46%
Activities During Consumption
% of Eatings
Source: NPD Snack Track 2.1 2010
Chocolate consumers are frequently engaged
in the media.
Activities and events accomplished in a typical week by adult
moderate chocolate eaters vs. those who dont eat chocolate.
11% more time on the
internet

10% more time watching TV
91%
89%
80%
79%
70% 75% 80% 85% 90% 95%
Watching TV
Surfing the Internet
Never
Moderate
Moderate
Never
Source: NCA & The Futures Company, 2012
On days when Chocolate is eaten its typically eaten only once per day, often
as an after dinner dessert or a late night snack while watching TV
Chocolate Consumption is Saved for the
End of the Day
25
10.5
18.3
6.7
12.3
Total
Confections
Chocolate
Late Night
Snack
After Dinner
Dessert
% of Eatings 1 time
73%
2 times
17%
3 times
6%
4+ times
4%
% of Eatings per Day
Source: NPD Snack Track 2.1 2010
Candy
Bars
27%
Fun Size/
Mini
26%
Pieces
38%
Unknown
9%
Adults 18-44 Prefer Pieces And So Do Adults 45+
Candy
Bars
25%
Fun Size/
Mini
27%
Pieces
38%
Unknown
10%
Adults of all Ages Prefer Pieces - Perhaps for
Portion Control
26
% of Adult 18-44 Eatings % of Adult 45+ Eatings
Source: NPD Snack Track 2.1 2010
44.3
18.1
12.5
3.1
2.7
2.6
2.4
1.5
Watching TV
Doing nothing in
particular
On the Internet
Playing cmptr/
video/board game
Eating a meal
Work or homework
Cooking/ household
chores
Watching DVDs
76%
Relaxing
Adults Usually Consume Pieces While Relaxing at
Home, But At Work Consumption is Still Common
27
When at home, 76% of pieces consumption is associated with relaxing
activities versus 61% for Total Chocolate
% of Pieces Eatings- Adults at
Home
Away from home 28%
At work 18%
In a car/plane/other trans 5%
Other 5%
Away from Home consumption of
pieces happens predominantly at work
% of Pieces Eatings - Adults
Source: NPD Snack Track 2.1 2010
7.0
14.4
31.4
44.9
26.0
9.9
19.9
6.4
9.6
9.6
At Home Away from Home
On/Off Throughout the Day
Late Night Snack
After Dinner Dessert
Afternoon Snack
Mid-Morning Snack
Before Breakfast
% Consumed as a Snack
94.7% 88.7%
Snacking Occasions Represent the Vast Majority of
Chocolate Consumption but Vary Greatly by Location
28
Morning and Afternoon Snack Occasions Increase
During Away From Home Consumption
Snack Occasions
% of Eatings
Dessert and
Late Night
Morning to Afternoon
Source: NPD Snack Track 2.1 2010
Consumption Occasions
What Does All This Mean?
29
SO WHAT
A well-stocked home inventory (pantry) will drive at home consumption.
It is important to associate chocolate with enjoyable moments and what is
happening around those moments.
There may be an opportunity to leverage the fact that chocolate is
generally eaten once per day, and NOT eaten throughout the day to rebut
concerns about chocolate consumption.
Pieces can play a unique role in targeting consumption opportunities at
different locations and occasions.
There are separate and distinct snacking occasions that can be uniquely
targeted to drive consumption.
Purchase occasions
30
Adult
92%
Child
2%
Don't
Know
6%
Eater
Purchased
58%
Another
Purchased
36%
Don't Know
Purchased
6%
Adults Purchase 92% of Chocolate, With Over
Half Intended for Themselves
31
Purchased by Purchased by
% of Eatings % of Eatings
Source: NPD Snack Track 2.1 2010
Chocolate has highest purchase and repeat purchase
rates among all confectionery products
32
0
10
20
30
40
50
60
70
80
90
100
Chocolate Non Chocolate Gum
Purchase at least once Repeat Purchase
Source: SymphonyRI Panel 2010
7.8
2.4
6.3
38.4
25.5
23.2
0
5
10
15
20
25
30
35
40
45
Chocolate Non Chocolate Gum
Purchased with Coupon Purchased with Any Deal
38% of all Chocolate Purchases Offer Consumers Some
Type of savings offer while Nearly 8% involve Coupons
33
Leveraging manufacturer
coupons and promotions
drives attention to category
and offer value to your
shoppers
Source: SymphonyRI Panel 2010
45
55
67
0
10
20
30
40
50
60
70
80
Chocolate Non Chocolate Gum
Purchase Cycle
Purchase Cycle
On average, shoppers purchase chocolate once every
six weeks (45 days), and about 12 times per year
34
Source: SymphonyRI Panel 2010
12 times/year 5 times/year 8 times/year
Adults are the Gatekeepers of Household
Chocolate
35
92%
2%
81%
19%
Adults
Children
Under 18
% Eaten
% Purchased
% of Eatings
Only a Small Portion of Children Under 18 Purchase Their Own
Chocolate
Source: NPD Snack Track 2.1 2010
With Adults Purchasing the Majority of Chocolate,
Purchase is at Locations Where Many Households
Needs are Met
36
Supermarket
30%
Mass/SC
20%
Drug Store
8%
Convenience
6%
Other
36%
Supermarket
19%
Mass/SC
10%
Drug Store
8%
Convenience
30%
Other
33%
For the 15% of chocolate consumed by
teens within an hour, convenience stores
are a primary purchase location
Where Chocolate Was Purchased
% of Teen Eatings within an hour
Where Chocolate Was Purchased
% of Eatings
Source: NPD Snack Track 2.1 2010
15.7
15.1
6.9
18.8
43.5
Chocolate Candy/Bars
More than a day
1 to 24 hours
31 min to 1 hour
30 min or less
Dont know
Chocolate Is Often Purchased More Than An Hour
Before Consuming needs
37
62% - More Than
1 Hour
% of Eatings
Timing of Purchase versus Consumption
Source: NPD Snack Track 2.1 2010
Purchase Occasions
What Does All This Mean?
38
SO WHAT
Because adults are both consumers and gatekeepers for chocolate, they
need to be considered regardless of the age segment you are targeting.
Adults need to be aware of the preferences of others in the household.
Pre-shopping trip marketing can be critical to motivate shoppers to put
chocolate on the list and in-store reminders can serve as a reinforcement
message triggering purchase for future consumption occasions.
It is important to specifically target age groups in different locations and for
immediate versus future consumption.
Motivations
39
88% of adult moderate
chocolate eaters believe
they have control over
their health.

Thats 7% higher than
adults who dont eat
chocolate.

88%
81%
12%
19%
50% 60% 70% 80% 90% 100%
Moderate
Never
7%
Source: NCA & The Futures Company, 2012
Chocolate consumers believe they have a high
degree of control over their health.
Close to a third of chocolate consumers wanted
chocolate, and only chocolate
Chocolate Is Irreplaceable
41
29% of eaters wanted only
chocolate
Source: NPD Snack Track 2.1 2010
9%
13%
Eaten for Enjoyment
All Confections
Chocolate
Consumers Eat Chocolate For Enjoyment More
Often Than Other Confections
42 Source: NPD Snack Track 2.1 2010
20.5
17.9
12.3
11.0
5.3
2.8
2.8
2.5
5.3
1.2
15.5
12.7
12.1
9.2
7.0
6.7
5.1
4.7
4.1
3.7
Wanted something chocolate
Wanted something sweet
Like the taste
Had a craving for it
Wanted a treat or reward
Easily available
Was hungry
Looked delicious
Favorite snack
Someone else provided it
At Home
Away from Home
% of Pieces Eatings - Adults 18+
Temptation is a Major Motivator for Adult Consumption
of Pieces When Away From Home
43 Source: NPD Snack Track 2.1 2010
16.9
14.9
11.5
11.6
6.4
6.8
18.9
17.8
10.1
11.1
4.1
5.6
Wanted something
chocolate
Wanted something sweet
Like the taste
Had a craving for it
Favorite snack
Wanted a treat or reward
Total Chocolate
Boxed Chocolate
Motivations by Product Type
% of Eatings
Consumption Motivations Vary by Product Type, But
Wanting Chocolate and Sweets Remain on Top
44
Boxed chocolate motivations are higher for wanting something chocolate
and wanting something sweet.
Source: NPD Snack Track 2.1 2010
The more they exercise, the more
frequently they eat chocolate!
Trend
P
e
r
c
e
n
t

o
f

r
e
s
p
o
n
d
e
n
t
s

40%
42%
44%
46%
48%
50%
Never Infrequent Moderate Frequent
Frequency of chocolate eating
Actual
Percent of adults
who exercise 3+
times a week:
46% - frequent eaters
44% - moderate eaters
45% - infrequent eaters
41% - non-eaters
Source: NCA & The Futures Company, 2012
For weight management, they choose other
practices rather than cutting back on sweets.
Top 5 weight management practices among adult moderate chocolate
consumers versus adults who dont eat chocolate:
Method Moderate Never Difference
Eating more fruits and vegetables 57% 45% + 12%
Eating smaller portions 54% 48% + 7%
Regular exercise (at least 3 times a week) 49% 40% + 9%
Increasing water consumption 47% 36% + 11%
Eating less sugar/sweets 43% 38% + 4%
Source: NCA & The Futures Company, 2012
Moderate chocolate eaters still want to eat their chocolate
and prioritized other ways to manage their weight
Nor does sugar-free rank high among chocolate
consumers preferences for healthy food.
Top 5 important characteristics of healthy food,
among chocolate consumers:
Rank Adults Children
1 Fresh Fresh
2 Whole grain Whole grain
3 High fiber Low-fat
4 Low sodium High fiber
5 Low-fat Low calorie
(Sugar-free ranks #12 for adults; #15 for children.)
Source: NCA & The Futures Company, 2012
Taste, freshness, familiarity and value rule when
adult chocolate consumers decide which foods to buy
Among adult chocolate consumers, the top
influences when making their food purchases:
1. Taste 84%
2. Freshness 74%
3. Family acceptance 62%
4. Price 61%
Source: NCA & The Futures Company, 2012
Given the high household penetration of chocolate, promoting these attributes
among chocolate consumers can drive grow overall market baskets
Motivations
What Does All This Mean?
49
SO WHAT
The unique desire for only chocolate stresses the
importance of retailers stocking solid distribution and
staying in-stock especially with adult favorites.
The chocolate experience is elevated beyond that of other
confections, when it comes to eating for enjoyment.
Retailers can link enjoyment of chocolate to enhance their
retail experience
At home and away from home consumption can be targeted
differently, driven by differing motivations.
Chocolate Consumers
What Do You Do Now?
50
NOW WHAT
Age:
Address the taste preferences of the 18-44 year old segment. Pair dark chocolate with
categories strong among this group Wine, Cheese, Entertaining, etc.
Stem declines among 18-44 year olds and capture the growth of the 45 plus segment by
promoting the health benefits of dark chocolate and cross promoting with other healthy
foods yogurt, granola, nuts
Evolve Teen taste profiles by promoting more dark chocolate and addressing developing
health concerns to insure that they carry over their consumption habits into adulthood
Address moms concern of over-indulgence of chocolate by kids by focusing on
moderation as well as chocolates role as a treat or reward
Relaxing Moments:
Connect with consumers via the relaxation and enjoyment associated with chocolate -
movies/TV at home, entertaining, dinner, etc.
Promote shared family consumption at home with sharable family packs and family
directed messaging
Chocolate Consumers
What Do You Do Now?
51
NOW WHAT
Path to Purchase:
Influence shopper pre-trip through ads, social media and apps to get on the list and
in-store through reminders to capture the future consumption nature of chocolate
Promoting taste, freshness, family, and value - key opportunities for higher baskets
Pieces:
Promote pieces for sharing while relaxing at home
Consider introducing packaging that promotes both sharing and temptation - in
home and out of home
Snacks:
Drive at home snacking occasions (dinner and late night) by promoting with
categories associate with those times of day dinner items, wine, coffee, dessert
items. Consider media vehicles like TV and internet high at home consumer use
Drive away from home snacking occasions by cross promoting with categories
associated with those times of day - coffee, milk, lunch items