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 Sales of mainstream milk chocolate bars have stagnated as consumers
worried about obesity and heart disease turn to snacks with less
sugar and fat, or hold out for the occasional indulgent splurge on
expensive, high-end chocolate.
The shift in attitudes is forcing global firms from Mars Inc. to
Mondelez International to Nestle to rebrand or reformulate their
mass-market chocolates to create a healthier image, or sell a more
expensive premium experience.
Smoother dark chocolate bars, protein bars with chocolate,
sugar-free chocolate and single-origin chocolate are an answer to
consumer demand for healthier and higher-quality bars, the companies
say.
Critics of the confectionery industry say the new products are
gimmicks to boost sales by giving a premium feel or a "healthy halo"
to snacks still high in sugar and fat.
The companies want to find growth somewhere. The volume of
confectionery products sold worldwide rose just 0.5 percent in
2016-17 after falling for two years, according to research company
Euromonitor International.
"It's going to be very difficult to persuade consumers to buy more
chocolate," said Wiebke Schoon, food analyst at Euromonitor. "But
they are open to being convinced to have better chocolate, to spend
more money on it."
While the volume of chocolate sales has been largely static, the
value of sales rose 3.6 percent in 2016-17, according to Euromonitor,
suggesting consumers may be prepared to pay more for chocolate they
believe is healthier or better quality.
"Natural, locally-sourced ingredients are and will continue to be at
the heart of what people are looking for," said Sandra Martinez,
Nestle's global head of chocolate and confectionery. "Combined with
that artisan flair."
The Swiss food giant, which sells $8.8 billion (£6.59 billion) of
confectionery a year, has turned to so-called chocolatories to try
to turn its mass-market KitKat bar into a luxury, personalized
product - with a premium price.
At boutiques in Japan, chefs conjure up creative recipes and
customers can buy KitKats in more than 10 flavors including matcha,
strawberry maple and Japanese citrus.
They can also buy KitKats made from premium dark, milk and raw -
less processed - chocolate, or print a message on white chocolate
bars and wrap them in custom packaging.
"It's cool to have your name on confectionery," said Shiho Sudo, 20,
in a KitKat boutique in Tokyo, holding a trio of white chocolate
wafers with her name and birthday printed in gold-colored letters.
"This is a special gift for myself."
To print a message on three KitKat wafers costs nearly 2,600 yen
($23) while a regular KitKat costs 100 yen ($0.89).
ARTISANAL FLAIR
Nestle says the boutiques have been successful in taking KitKat
upmarket. It is rolling out similar shops across Asia and has
trialed pop-up versions in Europe with a view to making them
permanent.
Rival Mondelez, which owns well-known brands such as Cadbury Dairy
Milk, Cote d'Or, Milka and Toblerone, is also looking to make
mainstream products appeal to more demanding consumers.
Mondelez is trying to widen the appeal of its premium dark chocolate
brand Green & Black's by expanding in the United States and
launching a Velvet edition in Britain that offers consumers a
smoother, less bitter taste.
"It brings dark chocolate a little bit more to the mainstream," said
Mary Barnard, president of Mondelez International's chocolate
business in Europe.
While there is doubt over whether dark chocolate has health
benefits, the perception it is healthier than milk chocolate has
prompted a 31 percent rise in dark chocolate product launches in the
past four years, according to market research firm Mintel.
In countries such as Australia and Russia, Mondelez has begun
marketing high-cocoa versions of its mainstream bars such as Cadbury
and Milka under the label Dark Milk.
Mars - the chocolate retail market leader according to Euromonitor -
launched Dove Peanut Butter & Dark Chocolate Promises as well as
Twix Dark in North America this year.
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HEALTHY TREATS?
Large confectionery companies are also venturing into snack and
cereal bars including chocolate, seeking to take advantage of
growing global demand for healthier snacks.
According to Euromonitor, the volume of snack bar sales has risen an
average 2.6 percent a year for the past five years and is expected
to grow 2.4 percent a year going forward.
While these snacks are often smaller than traditional chocolate
bars, they typically earn companies a bigger margin.
This year, Mars unveiled its goodnessKNOWS snack bars in Britain,
its biggest product launch in the country in two decades. The bar,
split into three bite-sized pieces, is made of nuts, dried fruit and
dark chocolate.
Mars, which makes M&Ms and Snickers bars, has also taken a stake in
KIND, the third-biggest maker of snack bars worldwide.
Other chocolate makers have turned to creating recipes with
ingredients geared toward health-conscious consumers.
Germany's Ritter Sport, for example, has launched vegan chocolate
with grains such as quinoa and amaranth and is working on a vegan
"milk" chocolate bar, using a dairy substitute.
Emma Calvert, food policy officer at the European Consumer
Organisation lobby group, is skeptical, however, about the health
drive by major chocolate makers.
"For us, this is a marketing tool rather than any strategy to
actually help improve the health of consumers," she said.
"They might be using coconut oil for fat or agave syrup instead of
sugar," said Calvert. "But it's still a type of sugar and would
contribute to your excess calories. It's a way to give a healthy
halo to products that really shouldn't have it."
RUBY CHOCOLATE
Some niche chocolate makers are focusing on a combination of luxury
and health.
At Rabot 1745 in London, a cafe, restaurant and shop owned by Hotel
Chocolat, bars with cocoa beans from a defined part of the company's
Saint Lucia plantation are sold alongside sugar-free 65 percent
chocolate made with buffalo milk.
Angus Thirlwell, co-founder and CEO of Hotel Chocolat, a British
company with more than 70 outlets across the country, hopes
different kinds of cocoa beans will attract the same premium value
attached to certain coffee beans or grapes.
"The wine world has achieved a much better balance between growing
grapes and the added value of the final product," he said.
"Chocolate has lost its way but is finding it again."
While companies such as Hotel Chocolat source specialty cocoa with a
more distinct flavor from Ecuador or Brazil, most mainstream
chocolate is made from mass-processed beans grown in Ivory Coast and
Ghana, the world's top two producers.
The beans are usually mixed together without regard for whether
cocoa from different trees or plantations can produce varied tastes,
textures or colors.
But this could be changing. Barry Callebaut, the world's leading
provider of chocolate products for businesses, unveiled a new type
of chocolate this year with a pink hue and fruity taste: ruby
chocolate.
Barry Callebaut determines if beans have the properties that make
ruby chocolate by testing cocoa pods on plantations for particular
genetic properties.
"The market is moving more toward understanding taste," said Bas
Smit, head of global marketing for Barry Callebaut. "It's about
hunting for the unique."
(Reporting by Ana Ionova; additional reporting by Osamu Tsukimori in
Tokyo, Marcy Nicholson in New York and Silke Koltrowitz in Geneva;
editing by David Clarke)
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