Ethical chocolate maker Divine saw a near 10% sales decline last year as consumers shunned premium chocolate amid HFSS regulations and cost of living challenges.

Fairtrade Divine, which is part-owned by cocoa farmers in Ghana, posted annual sales of £9.9m in the year to 30 June 2023, down from £10.9m in the previous year.

The group blamed “external market factors and a reduction in consumer demand across the chocolate category” for the drop.

It said the main suppressors of demand have been the introduction of HFSS regulation, increased competition in the market and third-party supply chain challenges.

Speaking to The Grocer in September last year, Sophie Loveday-Davies, marketing director at Divine Chocolate, said higher prices had impacted category demand.

“Aside from cocoa, we have seen rising costs across our whole supply chain, including other raw materials, packaging, and transport,” she said, adding that the increase in energy costs has been “a big contributing factor”.

An increasing number are looking to cut costs by going for smaller sizes. “We have seen growth in smaller, impulse-size bars – allowing consumers to treat themselves, not compromise on indulgence but at a lower per unit price point,” she said.

Divine continues to invest in NPD, with the launch of pudding-inspired Dessert Bars in January and ‘flat’ Easter Eggs for 2024.

Despite the drop in sales, margins improved to see a small increase in gross profit to £3.8m.

It moved to an overall pre-tax profit of £687k from a loss of £1.1m, aided by £1.75m of “income from group undertakings”.

Divine is ultimately controlled by German confectionery group Ludwig Weinrich.