Nestlé to Enter Luxury Chocolate Market

21 April 2008

ZURICH, Switzerland: Nestlé, the world's biggest food manufacturer, is aiming to boost confectionery sales by entering the premium chocolate market.

Luxury chocolate has posted growth rates of some 8% in recent times, double that of the general chocolate market; but dark and luxury chocolate currently contribute only 4% of Nestlé's global sales.

Petraea Heynike, head of chocolate operations, said: "Dark chocolate is a still-accelerating trend. Even countries which have no dark-chocolate tradition are successfully introducing such products."

Nestlé has the second biggest global chocolate market share at 13% – two percent behind Mars.

Analysts are predicting that the company could now follow one (or more) of a number of strategies, including launching a global brand of its own, pursuing organic growth, or seeking to acquire smaller brands.

The luxury market is already highly competitive, and includes established players such as Green & Black, owned by Cadbury Schweppes, and the Swiss brand Lindt. Commentators say Nestlé will need to find a niche of its own if it is to succeed.

The research center, to be based in western Switzerland and headed by Belgian chocolatier Pierre Marcolini, will provide creative input to the company, which has so far remained tight-lipped over strategy or sales targets.

Data sourced from Wall Street Journal Online; additional content by WARC staff