At the risk of being flippant, one could easily answer the question, “What lies ahead for chocolate and cocoa products?” Surely, anyone in the industry could easily respond by saying, “Higher prices!”
As Kip Walk, director of cocoa development for Blommer Chocolate, points out, “The 30-year average price of $1,500 per ton is behind us. Today, $2,800 per ton is a fair target.”
And although there are some early signs - increased fertilizer shipments into the Ivory Coast and early forecasts of favorable weather patterns - that the 2010/2011 crop could deliver a better harvest, it’s a bit early to predict, Walk says.
There are other factors, of course, that influence cocoa prices: global consumption, speculative trading, overall crop health and quality, and political stability in cocoa-growing areas - specifically, the Ivory Coast.
But in the end, it’s the consumer that drives the industry. As a recent study conducted by Puratos, “consumers referenced taste as their main purchasding driver … Whether milk or dark, our study shows 86% of consumers are eating chocolate almost everyday because it makes them feel good.”
And although the 2008/2009 global recession certainly took the bloom off - no pun intended - premium chocolate’s incredible growth, there’s still an appreciation for quality. However, faced with an assortment of belt-tightening decisions, consumers opted for value as opposed to vogue.
Thus, private-label chocolate offerings that delivered value and quality quickly posted increased sales. Chocolate lovers, however, still appreciate their brands, and a gradual economic recovery coincided with a return to regular consumption patterns.
“In October of last year, after studying trends and trajectories, we noticed that single bar sales had increased,” Walk says. “And the most recent data from Easter indicates there were strong increases in bag and bulk sales. These signs suggest that consumption is returning.”
Indeed, first-quarter grind figures for North America showed a 16.2% jump from a year ago. Even the Europeans posted an 8.1% jump in grind from a year ago.
What’s driving the rebound? Certainly, economics play a role. There’s little doubt that consumers are weary of frugality and a bunker mentality. That doesn’t mean that purchasing patterns have remained the same.
Today’s value propositions embrace more than just price; they include quality, social consciousness, excitement, convenience and benefits.
As Rose Potts, quality assurance and sensory analysis supervisor for Blommer, observes, three themes stand out amongst consumers today: simplicity, comfort and health. For chocolate, such themes inherently have been part of its appeal. Today, however, manufacturers are recognizing how to better address and merchandise those benefits.
“We’ve seen the toning down of many label designs for chocolate products; they’re no longer as ‘over the top’ as they were several years ago,” Potts says. “Ingredients also play a big role in simplicity. Consumers want to simplify what they’re putting into their bodies. Thus, all-natural ingredient statements, which also tie into organic, are more prevalent.”
And despite some negative press chocolate received as a result of a recent study published in the Archives of Internal Medicine, which found an association between chocolate consumption and depression (questions linger about the correlation), overwhelming scientific evidence shows that chocolate contains healthy attributes, ranging from improved circulatory health and reduced stress, to improved cognitive function and even anti-aging and beauty benefits.
Thus, it’s not surprising that cocoa and chocolate processors as well as manufacturers continuously are working to expose theobrama’s wonders through research.
Earlier this year, Mars, Inc. and Barry Callebaut AG signed a cross-licensing and cooperation agreement that is expected to increase the availability and uniformity of cocoa flavanol-rich chocolate products worldwide. The agreement marks the beginning of a joint effort to establish consistent standards for beneficial cocoa flavanol products.
“While flavanols are naturally abundant in cocoa, unless you are specifically measuring and carefully handling a product throughout the manufacturing process, there is just no guarantee the product contains meaningful levels of the flavanols,” says Mary Wagner, general manager at Mars Botanical, a scientific unit of Mars, Inc. that’s dedicated to flavanol research and product development.
“For nearly two decades, we’ve been studying the process of measuring and maximizing the retention of cocoa flavanols and uncovering their related health benefits, resulting in over 100 scientific publications and a broad patent portfolio,” she continues. “Over the last five years, we have also sold products like CocoaVia, and continue to sell Dove Rich Dark Chocolate, both high in flavanol content. This agreement with Barry Callebaut will now guarantee reliable flavanol levels in more chocolate products around the globe.”
Barry Callebaut has begun licensing Mars patents, displaying the Mars Cocoapro “bean in hand” logo on its Acticoa products in the United States and other markets with an assured consistently high level of cocoa flavanol content.
“Acticoa chocolate has been on the European market for nearly five years, and this new cooperation will allow us to even better serve our customers worldwide, in particular also in the U.S.,” says Hans P. Vriens, Barry Callebaut’s chief innovation officer.
Both companies have agreed to cooperate in promoting flavanol rich chocolate products with a guaranteed level of flavanols inside. After all, cocoa flavanol containing products can be a part of a healthy diet.
But simply having a higher percent cacao, being a “darker” chocolate or claiming antioxidants as the main benefit of cocoa misses the point and demonstrates the need for a means to measure and indicate adequate levels of flavanols consistent with recent scientific studies, the two companies emphasize.
Barry Callebaut also recently revealed the results of new scientific studies demonstrating the anti-aging effects of its Acticoa cocoa and chocolate products. According to the studies, regular consumption of cocoa flavanols, the powerful antioxidants found in raw cocoa, can significantly improve skin elasticity and hydration. This suggests that beautiful skin can be achieved through the natural goodness of the cocoa bean.
Studies involving Acticoa chocolate concluded that enjoying 14 g. of dark chocolate, 28 g. of milk chocolate or 3 g. of cocoa powder on a daily basis can result in improved skin elasticity and improved skin hydration.
According to Barry Callebaut, the flavanols in the Acticoa chocolate begin to restore the balance between antioxidants and free radicals in the body within two hours of consumption. Visible skin improvements can be seen within six months.
The myriad health benefits associated with chocolate dovetail perfectly with its more psychological role of providing consumers comfort.
Consumers look to chocolate for its ability to comfort them, Potts says. She cites milk chocolate as the ultimate comfort product.
“Today’s consumers want to feel comfortable about their choices as well,” Potts says. “Thus, they’re examining how products are sourced, whether it’s done sustainably. They’re also looking at the company supplying the product, the type of people producing the product, whether they doing so in an environmentally and socially conscious manner. They’re looking for permission to enjoy.”
Thus, it’s not surprising to hear that all the major cocoa and chocolate processing companies are expanding their efforts to improve the lives of cocoa farmers, while simultaneously aiding them in improving quality and yields of their cocoa crops.
Last February, Cargill announced it will double the number of Farmer Field Schools it operates in Côte d’Ivoire to 300 by mid-2010. The company launched 82 new schools in January, building on the 150 already established. In total, the 300 schools will train 10,000 farmers spread over 35 farmer co-operatives by the end of 2010.
As Harold Poelma, managing director of Cargill Cocoa & Chocolate points out, “Providing training and support enables farmers to increase yields, improve quality and through these - most importantly - to increase their incomes. By raising awareness of environmental, health and social issues, our program is also helping local farming families and communities. In short, the training is directly benefiting farmers today and supports them in becoming successful entrepreneurs for the longer term.”
As a result of the training, farmers are benefitting from a 30% increase in their incomes from higher yields, as well as an improvement in the quality of their crop. This quality improvement also leads to an increase in farmers’ earnings as they receive a quality-related bonus payment from Cargill.
Such efforts aren’t going unrecognized. A recent report from London-based Euromonitor International says that chocolate manufacturers are introducing more Fair Trade and “ethically sourced” chocolates in response to consumers searching for socially conscious practices.
Blommer’s Walk agrees that there’s greater focus on third-party certification within the industry. Although the recent economic downturn had an impact on organic chocolate growth, interest in organic certification remains strong. Blommer itself recently partnered with the Rainforest Alliance to certify its organic line of chocolates.
“We see this as the next wave for the chocolate industry,” Walk says. “It’s actually occurring across many commodities, with major retailers such as Wal-Mart and Whole Foods expecting it. The industry sees real value in this and there are external drivers that will make this a long-term strategy.”
Within the industry, there’s yet another trend developing, one of customized innovation, says Shane Benedict, corporate director of research and development for Blommer.
“Instead of the typical ‘What’s new?’ question customers often ask us, we go to customers and ask them where they’re going,” Benedict explains.
“It allows us to dig deeply to better serve their needs and makes the new development process more relevant and more efficient by building on their knowledge and expertise,” he says.
Benedicts believes that such collaboration will continue to grow and represents the future for both Blommer and the industry.