Boxed Chocolate

March 1, 2007
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Boxed Chocolate

This is not your grandmother’s big box of chocolates; refinement has hit the category, namely in the form of dark chocolate and portion control.

Overview
Ding-dong! It’s 7 p.m. on a Saturday night and you’re arriving at a dinner party with a chic new box of chocolates for your hostess in hand. A duplicate box that you purchased for yourself awaits you at home.
According to industry calculations, it’s not a growth category of late, but boxed chocolates/gift chocolates are undergoing a good deal of positive change to attract more of today’s chocolate consumers and gift-givers. These squared-off/creatively housed confections are more accurately reflecting confectionery trends with dark chocolate assortments, sugar-free selections, premium pieces and packaging, and smaller versions of their former selves, some even purposely appropriate for a self-gifting daily treat.
Target Audience
There’s no need to completely forsake targeting consumers buying for Grandma and Auntie on their birthdays and holidays; chances are they’ll still love the traditional (often larger) boxed treat of chocolates. And these traditional chocolate-box recipients often buy the same type of chocolate gift for those on their gift lists. But they should now be a secondary audience to retailers looking to expand their business in the category. Today’s primary boxed-chocolate targets are much younger, hipper and more willing to treat themselves if the assortment, price and packaging are more upscale and merchandised almost right in-their-face. (Target’s upscale chocolate brand, Choxie, is a good example of a chocolate product with a bit of attitude, apparently targeted to this sort of consumer.)
Self-indulgence is still very much “in” with the younger-something working professionals. Females in this group are especially inclined to treat themselves to chocolate on a weekly, even daily basis, particularly if the (more upscale) packaging and (smaller or portion-sized) box screams, “You earned this!” And it’s really okay with them if it costs four times as much as a standard candy bar. In fact, higher-priced boxed chocolates are typically more attractive to this target crowd; they translate that to higher quality, affordable “luxuries.”
Seasonal Opportunities
The boxed chocolates arriving on the market of late go way beyond heart shapes and Christmas belly-bands. While Valentine’s Day and the fourth-quarter season are still vital to the category’s sales, the industry is picking up on other seasonal opportunities such as Easter, Mother’s Day, Halloween, and even less-popular candy occasions such as St. Patrick’s Day and Thanksgiving. Mail-order operations such as Harry & David are notorious for mailing out catalogs for every holiday and getting customers to think about buying boxed treats long before the holiday hits. Retailers who dabble a bit in targeting consumers for ‘odd’ holidays by getting in and getting out with boxed items, will perhaps start a trend that is more convenient than mail-order, but just as special.
In addition, savvy vendors are making it easier than ever for potential gift giving consumers with the inclusion of gift tags as part of the package.
Outlook
Forget opening Pandora’s Box: Chocolate boxes will hold more intrigue for today’s consumers. Expect expanded offerings from boxed chocolate manufacturers in keeping with much-touted chocolate trends: natural and organic, Artisan lines (even from more mainstream players), exotic fruit/chocolate combinations, and international boxed offerings that will familiarize consumers with specific regions of cocoa bean production. The idea is to allow consumers to “taste travel.”
$222 million
Gift Box Chocolates Estimated U.S. Retail Market Size

Source: IRI figures for Food, Drug, Mass channels, excluding Wal-Mart

Merchandising Musts
• Think outside the big, old box. Boxed chocolates have moved on to the next generation and so, too, should a retailer’s display tactics. A younger, hipper audience should be targeted separately, away from the staid category in-aisle. Outposts of the more contemporary, smaller boxed treats can add incremental sales. Taking up less room than the traditional large boxes, they lend themselves perfectly to cross-merchandising displays, mentioned below.
• Look up to Starbucks. Take a cue from the retailer who has wisely merchandised small gift boxes of chocolate alongside its famous java. Younger audiences are used to this pairing of coffee for me today/boxed chocolate for me today as well. Outposts of boxed chocolates belong near coffee, tea stations, the bakery, the deli — anywhere your customers stop on a daily basis for a hot drink or meal on-the-go. Boxed chocolate is now considered an on-the-go item for self-consumption.
• Give them a good gift display. Perhaps the most logical chocolate-box outpost is anywhere other gifts/gift items might be purchased — such as near greeting cards and gift wrap, books and calendars, in the floral department, and the favorite choice of gourmet food retailers — positioned near red wine.
Retailers that really want to see profit in the category are making gift baskets available at customer service or in the floral department, custom-designed with the gift givers’ choice of wine, boxed chocolate and other selected treats.

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