Katrina Markoff doesn’t believe in perfect.
Markoff, founder and ceo of Chicago-based Vosges Haut-Chocolat, searches for ways to push boundaries, whether it’s through exotic ingredients, painstaking sourcing processes and creating unique experiences for consumers.
Staying still, however, is simply not allowed.
“That’s one of the most important things about innovation — that you don’t lock on to particular recipes and say you’ll never change it,” Markoff says. “Then you’re stagnant and you’ve inhibited your ability to evolve.”
Niche followings and small batches give premium chocolatiers the ability to refine ingredients and the flexibility to try new things without assuming much risk. As a result, they lead innovation in the overall chocolate market despite occupying its smallest segment.
Nonetheless, the new flavor combinations and business approaches premium chocolatiers embrace often spill into the everyday chocolate sector, advancing the uniqueness and “craft” quality of all chocolate.
“You’re seeing an upgrade in every kind of designed experience, from clothing to food,” Markoff says. “(Consumers) want to feel more part of something fresh, creative and innovative.”
Premium chocolate defined
At least two models exist for defining premium chocolate, according to the 11th edition of “Chocolate Candy Market in the U.S.,” a report by Packaged Facts, a division of MarketResearch.com.
Historically, chocolate products reach the “premium” realm when they sell for more than 50 cents an ounce, or $8 per lb. However, the National Confectioners Association (NCA) sets the bar for premium chocolate at $11 per lb., leaving out “everyday gourmet” brands such as Russell Stover and Whitman’s, as well as other products at the low end of the spectrum.
No matter where the baseline is set, premium chocolate can be further divided into three categories. The “everyday gourmet” and “affordable luxury” category includes products priced between $8 and $15.99 per lb., according to Packaged Facts. These items, which carry a price premium over traditional chocolate fare, serve as a springboard for consumers looking to upgrade from often overly-sweet, mass-marketed items.
Products that are “upscale premium” fall between $16 and $23.99 per lb. They’re often sold online, at company-owned stores and kiosks, and in department and specialty stores. The last tier — the “super premium” category — has sprung from continued sophistication of consumer preferences. These products are priced at or above $24 per lb.
Everyday chocolate made up more than 80 percent of the $21.6-billion U.S. chocolate market in 2015, accounting for 82 percent of dollar sales and nearly 86 percent of unit sales, Packaged Facts reported.
Because of its weighty share, expansion in the everyday chocolate sector is difficult — and limited. Sales revenue stayed virtually flat last year, with 0.3 percent growth. Unit and volume sales dropped by 5 percent.
Meanwhile, the premium segment continues to inch forward. Under the $8-per-lb. threshold, dollar sales grew by 4.6 percent last year, held down by sluggish movement at the bottom end of the premium scale. Under the NCA’s $11-per-.lb definition, premium chocolate grew at nearly double the rate: 8.2 percent.
Several factors drive continued interest and innovation in premium chocolate, Packaged Facts says. Greater attention to sourcing, unique and heath-related ingredients, supporting causes and experience-oriented presentations are among the common themes.
When it comes to ingredients, only the finest will do for premium chocolatiers, and many go directly to the source to ensure their standards are met.
Vosges, with its Superior Sourcing Initiative, is no exception. Under the program, Markoff and her sourcing team narrow down fields of potential suppliers through a multi-step evaluation.
To start, they seek organic, non-GMO and sustainably-grown ingredients. Once they have a few offerings of the same ingredient under consideration, Markoff and a tasting panel assess them side by side, measuring color, texture, flavor and quality.
After selecting one or two possible options, the ingredients are tested in recipes to see which one will best serve Vosges products. Not only does the multi-step process enhance the products’ caliber, but Vosges customers know the ingredients’ origins — information consumers continue to demand.
“People want to know where their food is coming from, and they want to understand the craft process that goes behind it,” Markoff says.
As a bean-to-bar producer, Shawn Askinosie, founder and owner of Askinosie Chocolate in Springfield, Mo., also takes sourcing seriously.
Each year, he travels to locations in Asia, Africa, Central America and South America to visit the farmers growing the cocoa beans that go into Askinosie’s single-origin dark chocolate bars. They include:
- 70% San Jose Del Tambo, Ecuador Dark Chocolate Bar
- 70% Cortés, Honduras Dark Chocolate Bar
- 72% Mababu, Tanzania Dark Chocolate Bar
- 77% Davao, Philippines Dark Chocolate Bar
Askinosie says face-to-face relationships enhance the cocoa’s quality and boosts prices, ultimately improving the farmers’ financial positions.
“We need to follow the money back to the farmer and make sure that they get their fair share for the work that their doing to make this possible,” he says. “It wouldn’t be possible without farmers. None of this would be possible without farmers.”
Healthy, unique ingredients
Pairing nuts and fruit with chocolate is not exactly a novel concept, but inclusions and infusions continue to take new turns, Packaged Facts reports.
Premium confectioners are experimenting with different fruit, nuts, herbs, spices, flowers and textures. Some use particular ingredients for their potential health benefits.
After being challenged to find an application for it, Seattle Chocolates began using CoffeeFlour in jcoco’s Dark Chocolate Arabica Cherry Espresso Bar and A Super Chocolate Truffle Bar, under the company’s namesake brand.
Created by grinding the “cherry” surrounding Arabica coffee beans into a powder, CoffeeFlour adds a unique flavor to the bars. It also packs a nutritional punch, says Jean Thompson, Seattle Chocolates owner and ceo. Arabica cherries, though typically thrown out during harvest, are loaded with protein, fiber and antioxidants.
Turmeric, the gold spice used to flavor many Asian and Indian cuisines, is also gaining popularity because of its anti-inflammatory properties. Inspired by “golden milk,” one of Markoff’s favorite drinks, the Vosges Turmeric Ginger Dark Milk Chocolate bar combines turmeric, ginger, coconut and black pepper with Vosges’ proprietary 45 percent cacao dark milk chocolate.
Markoff says the use of black pepper makes the turmeric “bioavailable,” or more readily absorbed by the body.
In addition to exotic spices, Markoff has also incorporated antioxidant-rich teas into her chocolate bars. The Mint Matcha Chocolate Bar and the Vanilla Rooibos Chocolate Bar balance classic flavors with the earthy, grassy notes of the teas.
On the other end of the spectrum, some premium chocolatiers continue to develop creations inspired or infused with alcohol. Askinosie Chocolate’s most recent limited-run 1098 bar — the 77% Whiskey Dark Chocolate Bar — featured Tanzanian cocoa nibs aged in oak whiskey barrels for two years.
The 1098 line is unique in itself. Inspired by Assumption Abbey, a Trappist Cistercian monastery in Springfield, Mo., Askinosie named it for the year of the Cistercian order’s founding in France — 1098. Impressed with an “A” found in the abbey’s hymnals, the bars are wrapped in pouches sewn by the Missouri-based monks.
“That is a really important product line for us,” Askinosie said. “It’s a lot of fun, and it’s a chance for us to make a limited number of bars.”
Creating an experience
By paying close attention to ingredients and production, premium chocolatiers hope to give consumers an amplified tasting experience.
Vosges, for example, puts five-step instructions on the back of each chocolate bar so customers can fully enjoy it. With its truffles, Vosges takes “ritualizing chocolate” a step further, Markoff says, by providing the full story behind the truffles’ origins.
“Chocolate is one of the most powerful words in the food dictionary, and the ability to tell stories through it is so ripe and able,” she says. “People are really open to eating chocolate, and when you’re getting them to open their minds to new ideas through it, it can be a really powerful change agent.”
Markoff pointed to the 2011 Groove Collection, which was inspired by the influence African-American culture has had on music. The truffles reflect ideas associated with places where certain types of music were born.
For example, the Jazz truffle blends 62 percent cacao dark chocolate with chicory coffee from the renowned Café du Monde in New Orleans. The Gospel truffle, meanwhile, combines 45 percent deep milk chocolate with caramelized pecan praline and pecan pieces.
To add a multi-sensory component, the collection came with a CD and vintage EP. Customers were encouraged to listen to the songs while they tasted the truffles.
Ethel M, Mars, Inc.’s Nevada-based premium arm, hopes to deliver enhanced experiences in its newly-renovated factory store. Among the new, interactive amenities is a self-guided viewing aisle with digital displays illustrating Ethel M’s history and Mars’ sustainability efforts. Shadow boxes with original artifacts will also be installed along a timeline exhibit.
An upgraded chocolate tasting room will overlook Ethel M’s signature Botanical Cactus Garden, which has more than 300 species of cacti and desert plants. In the tasting room, guests will learn how chocolate is made and sample freshly-made treats.
“Today’s consumers are really passionate around stories and experiences about what makes anything special, specifically chocolate,” says General Manager Oren Young.
Creating quality confections is only part of what premium chocolatiers do. Many, including Askinosie Chocolate, find ways to enrich local and global communities.
The 10-year-old company is rooted in service, and as Askinosie says, is based on building “kinship” with the people linked to it.
“From the beginning it’s been our mission and goal to serve the people in our neighborhood, in our community, to serve our community at large, to serve the farmers we work with and serve each other,” he says. “We try to do that in every way we can.”
Through the self-sustaining “A Product of Change” program, Askinosie supports school children in Kyela, Tanzania, and Davao, Philippines — origin communities that struggle with malnourishment.
In its store and online, Askinosie sells Kyela rice, a white, medium-grain rice, and cocoa rounds for tableya, a Filipino hot chocolate drink, harvested and created by school administrators and parent teacher organizations. Proceeds go toward supplying a daily total of 2,200 school lunches, helping the often-malnourished students gain weight, improve attendance and perform better academically.
At home, Askinosie Chocolate hosts Chocolate University, a program that teaches elementary, middle and high school students to be global citizens through bean-to-bar chocolate production. During the summer, Askinosie takes a select group of high school students to Tanzania to meet cocoa farmers and their community. Students learn about direct trade and Tanzanian culture.
“Our mission is to have kinship with these people,” Askinosie says. “Hopefully we — and hopefully I — will be … transformed by that relationship and that opportunity of service.”
Vosges’ Markoff also connects young people — particularly young women — to business through chocolate. The Wild Ophelia accelerator program, named for Vosges’ free-spirited line of chocolate bars and peanut butter cups, caters to girls in high school and college with an interest in food entrepreneurship.
For eight to 12 weeks each year, three young women travel to Vosges’ Chocolate Temple in Chicago, where they learn about all aspects of food business: procurement, product development, manufacturing, graphic design, supply chains and innovation. They’re also given $5,000 to further the development of their own businesses.
“If someone can start something at a young age, they have a lot of grit that it would take to be an entrepreneur,” Markoff says. “I really want to model that and bring a lot of attention to that.”
Seattle Chocolates also harnesses the power of chocolate to bring about change in its surrounding community. With the purchase of each jcoco bar — Seattle Chocolates’ culinarily-minded line — the company donates a serving of food to local food banks.
“Let’s take the fact that people are in the habit of indulging and treating themselves to chocolate and make it have an impact on this other problem,” Thompson says.
Thompson notes the company encourages the food banks to purchase fresh produce, since their supply is often lacking or underwhelming. Having donated more than 1 million servings since the initiative’s start, Seattle Chocolates will expand the mission to include its 2016 holiday line.
Future of premium chocolate
Packaged Facts expects chocolate sales to climb to nearly $25 billion in 2020, thanks to continued product innovation and an influx of creative players in the sector.
The view that chocolate is an “accessible luxury” could continue to attract more consumers to premium items, spurring further growth and creativity.
Markoff believes that’s a boon for premium chocolatiers and other artisans.
“It forces everyone to evolve and do something a little bit differently and innovate,” she says. “I’m excited to see that.”
To purchase a copy of the report “Chocolate Candy Market in the U.S.” published by Packaged Facts, call 800.298.5294 or visit www.packagedfacts.com.