Godiva continues riding increase in chocolate sales out of pandemic
Godiva CEO Nurtaç Afridi discussed what's next in the chocolate industry.
Video transcript
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SEANA SMITH: Let's talk about the business of chocolate, because Godiva's business is growing very quickly and doubling its, posting double digit increase so far in sales this year. We want to talk a little bit more about this. The CEO of Godiva. We have Nurtac Afridi's joining us. Natasha, it's great to have you here on Yahoo Finance. Your growth, you're growing very rapidly, much faster than many of your competitors out there. And also at a time when I think a lot of businesses, at least consumer-facing businesses, are still struggling a bit. What's driving the growth that you've seen in your business over the last several months?
NURTAC AFRIDI: Thank you, Seana. And I'm very glad to be on your program today. Our business has been for 95 years and we have been delivering high quality chocolates to our consumers globally. Godiva is celebrating 95th anniversary this year. As we have been in the business so long, we have been observing the consumers, the consumer behavior, and what we observed over the years, the consumers want to shop whenever and wherever they want, easier and in a more convenient way.
This led us to adopt the omnichannel strategy, expand and diversify our distribution channels, and expand our product portfolio for everyday consumption for all price points and for all consumption occasions. With that, we delivered our products to our consumers through convenience stores, grocery stores and online. That helped to grow our business, our sales during the last quarter almost 22%.
ADAM SHAPIRO: Nurtac, I think many of us are fans of Godiva chocolate. I'm old enough to remember having to go to a Godiva chocolate store to get the product. And now, as you just pointed out, we can purchase at a grocery store and it's still premium chocolate. But you pulled something off in that you increased sales at a time that the globe was shutting down because of the pandemic. So what is the future for chocolate prices? Because there's always the issue with the price of cocoa beans and other countries where these are produced have not yet fully opened.
NURTAC AFRIDI: Adam, thank you. The high quality ingredients, they will always have their value. And they have to deliver that value to the suppliers. We have seen some increases in the input cost, as well as raw material prices, but we always look into our processes into our efficiencies and how we can deliver the highest quality at the lowest costs for consumers. Of course, with the growth of the channels, with the growth of the technology as well as with the volume increase, the efficiency levels increase and we are trying to maintain our prices at the best level by maintaining our quality at the highest level as well.
SEANA SMITH: You mentioned consumer packaged goods and how that's a key strategy here for you going forward. I believe right now it accounts for just around 29% of the brand's global sales. When you look out, like Adam was just saying, over the next what, three, five, maybe even 10 years, what is that percentage look like? I guess, how much of the business do you hope will be attributed to the consumer packaged goods sales?
NURTAC AFRIDI: Chocolate is a big market. Chocolate is loved by everyone. And we are blessed to be in such a beautiful business. In global terms, the chocolate business about $130 billion, and in US only it's $18 billion. 25% of this channel is outside of the CPG channel, 75% is in CPG channel. So as the convenience need of consumers continue to grow, we believe that online and CPG channels will grow as well. And we believe that our sales now being in Target, Cosco, Macy's, as well as CVS, Duane Reade, Sam's Club, in these grocery stores, we will grow faster than we used to grow in our mono brand retail stores.
ADAM SHAPIRO: Nurtac, very quickly, I think many of us would claim to be responsible for almost all of that $18 billion in US sales, it's that good. Where's the fastest growth? Is it Asia? Is it Europe? Is it Africa, South America, where do you see that?
NURTAC AFRIDI: The fastest growth is in Asia. Chocolate growth is differing in different regions. Of course, in the developing countries, as the income levels grow, the chocolate growth also increases in parallel. The premium chocolate, on the other hand, outpaces the growth of mass chocolate. And that are seen globally everywhere. But as a summary to your question, Asia has the highest growth in premium chocolate and mass chocolate growth.
