Last winter's unseasonably warm weather badly affected sales of food drinks, with both volume and value sales down.
In terms of volume, sales of hot chocolate and malted drinks were down 7.3% while value sales declined by 7.9% year-on-year to May 19 (Information Resources).
"In the short-term, weather definitely contributed to the market decline," says Paul Simpson, marketing manager for Norvatis-owned brands Options and Ovaltine.
Simpson also claims that the category, which is valued at £100.2m, has been affected by a lack of innovation and by retailers reducing fixture space to 7ft from 12ft.
Currently, the standard instant category is the only segment showing any real growth in the hot chocolate market, up 2.1% according to the latest figures from ACNielsen (52 weeks to July).
Cadbury is driving this with Instant Break, the brand leader with a 57.6% share, which it says grew by 4.5% over the same period.
Galaxy by Nichols Foods claims to be the second best selling brand in the instant hot chocolate category having gained about 11% brand share of this sector of the market (ACNielsen).
To turn around the overall downward trend in the category, Cadbury believes the most effective strategy is to target light and medium users and encourage them to step up consumption.
"Highlights and Instant Break will be our main focus to create more consumption occasions for existing users and to communicate the message that hot chocolate is not just for bedtime ­ it is for other times of the day too," says brand manager Anthea Harrison.
To this end Premier International Foods, manufacturer of Cadbury, is launching a £3.5m marketing campaign to encompass TV and radio advertising, door drops, sampling and PR set to position instant hot chocolate as an every day alternative to tea and coffee.
It has been a positive year for Novartis which grew its market share for Ovaltine original and light by 0.5% to 12.1% in a declining market. Value sales are down 8% but leading brand Horlicks is down 17% and Bournvita is down 23% (IRI).
To halt this GlaxoSmithKline, manufacturer of Horlicks, is investing £4.5m in marketing this year while Norvartis plans to spend about £1m.
"There is a lot of growth potential for Ovaltine," insists Simpson. "Horlicks is roughly 2.5 times bigger than Ovaltine so there is no reason why we cannot increase our market share, even if the market is in decline."

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