Chocolate sales defy recession

CHICAGO — After stalling in early 2009, the dark-chocolate market finished the year with a 9 percent increase in sales.

Not bad for an industry that many analysts thought would see demand from recession-weary consumers melt away, particularly amid higher prices for cocoa beans and predictions of a shortage in the world cocoa harvest. In the first two months of 2009, dark chocolate sales were off by 2.2 percent.

But while consumers started to pull back on unnecessary spending, they found ways to treat themselves. Economists call it the "lipstick factor," referring to the historical rise in lipstick sales during tough economic times as women look for an affordable way to cheer themselves up.

In the candy industry's case, during the recession people sought chocolate as an affordable indulgence to feel better.

"There is no (vacation), but people stay at home and find small moments of joy," said Tim Quinn, vice president for trade development at Mars Inc.

Candy sales as a whole increased last year by 3.6 percent, with 2,843 new products introduced to the market. About two-thirds were chocolate products, according to the National Confectioners Association.

Dark chocolate saw the greatest demand in 2007, when sales peaked at $829 million, a 35 percent jump from the previous year. Then the recession hit, and the pace of sales growth slowed in 2008 to 12 percent, according to the National Confectioners Association.

Eric Bochner, owner of Bochner Chocolates, said the recession put a big dent in his sales. So he decided to adapt his products to the pocketbook-conscious market.

During the premium-chocolate boom, his sales increased by 50 percent. Then sales decreased by 30 percent from 2008 to 2009. He decided to develop new products and redesign the packaging. He infused his chocolate with flavors that were more familiar to consumers, such as cherry and hazelnut, and sold the new product at reasonable prices, about $3.50 a bar.

It worked. Bochner said sales are increasing, and he's expecting to reach pre-recession levels later this year.

Bigger companies also are experimenting with new flavors.