Sales in the global chocolate market have risen 3% since 2008 and the current market worth is an estimated $17 billion, on target to exceed $19 billion by 2014, according to "The Chocolate Market in the U.S.: Trends and Opportunities in Premium, Gourmet and Mass Chocolate Products," a new report from Packaged Facts. A “mature, differentiated and exacting market,” the ability to distinguish one chocolate brand from another on-shelf is an increasingly difficult challenge. In an effort to differentiate, chocolate marketers have looked beyond their own market segment to other food and beverage segments, incorporating functional ingredients, superfruits, savory and ethnic ingredients into their formulations to help drive sales in a market that has hardened to products touting once marquis features such as high cocoa content and single-source origins.
“Over the last decade chocolate makers have been responding to consumers’ drive to live healthier lifestyles,” commented Packaged Facts’ Curtis Vreeland, a seasoned chocolate industry analyst and author of the report. “Their efforts have brought us portion-controlled packaging, sugar-free sweets, heart-healthy dark chocolate and fortified confections of unbelievable variety and veracity. This trend should continue, as healthier confectionery offers consumers an irresistible package: health and wellness, plus indulgence and a convenient serving modality.”
According to Packaged Facts, several major chocolate manufacturers have made considerable investments in the segment, most notably at the forefront was Barry Callebaut, which launched its innovative, flavonol-rich Acticoa brand cocoa and chocolate in Europe in 2006 and here in the U.S. this past April. “Barry Callebaut has been jointly working with Mars Incorporated to promote enhanced cocoa flavanol products,” said Mr. Vreeland. “Barry Callebaut’s product Acticoa contains three times the flavanol content as typical dark chocolate, 460 ORAC values per one gram, as compared with 160 ORAC values with standard dark chocolate.”
Each year seems marked by new studies heralding the health benefits of chocolate consumption. “In addition to its reported beneficial cardiovascular properties, a medical report published in 2009 suggested that chocolate can help fight wrinkles,” Mr. Vreeland stated. “Apparently, consuming a 20-gram chocolate bar containing 600 mg of cocoa flavanols significantly increases the elasticity of the skin, according to the SIT Research Centre in Germany.”
Hans Vriens, chief innovation officer at Barry Callebaut said in a company press release that the study lent anti-aging credibility to his company’s Acticoa brand. “We are now closer to understanding how these flavanols nourish the skin from the inside and protect it against damaging environmental influences such as exposure to the sun,” he said.
What’s more, Mr. Vreeland reported that Barry Callebaut has also been supplying the first industrial-scale probiotic chocolate product containing gastro-intestinal benefits since 2008. According to Joseph Maroon, MD, author of The Longevity Factor, chocolate is an excellent delivery vehicle for probiotic bacteria because it contributes to better absorption than many other probiotic foods. Mr. Vreeland added that survival rate of Lactobacillus Helveticus and Bifidobacterium is three times greater in chocolate than with dairy products, such as yogurt, and he pointed to Maramor Chocolates, a Columbus, OH-based company, who in addition to introducing its Omega-3 Chocolate Squares in 2008, uses Barry Callebaut chocolate for its new line of probiotic chocolates.
“Thanks to the efficiency of chocolate as a delivery vehicle for probiotics, fewer calories are needed to balance the bacteria in the gut and optimize the health benefits,” Maramor’s company vice president Barry Galloway explained to Packaged Facts.
Functionally speaking, Mr. Vreeland said that the better-for-you chocolate segment is “getting crowded” with creative and tasty products. While some chocolatiers have set their sights on upping the sweets’ functional appeal with the addition of calcium and vitamin D, others formulators seem keen on tapping into nutrient-rich fruits and other additives to up their products’ shelf appeal. Among them are Beauty Bark from Azure Chocolat, which contains dark chocolate, walnuts, wild blueberries, cocoa nibs, golden flax and sea salt; Healthy Bar from Burdick Chocolate, a three product dark chocolate line comprised of goji berry, blueberry and cocoa nib flavors that feature hazelnuts, flaxseed, raisins, apricots, pumpkin seeds and pink peppercorns; and Superfruit Chocolate Kits from Navitas Naturals that are made from organic and raw superfruits, including cocoa, maca, lucuma, mesquite and berries.
Omega-3 has also become more prevalent. NewTree launched its Omega-3 Alpha Bar with Belgium Biscuit, which contained dark chocolate, biscuit and flax seeds; and Protos Foods went to market with Gimme Chocolate, a line of chocolate candy available in five formulations: vitamin D3, omega 3s, probiotics, calcium and omega 3 with the Peruvian whole grain salba.
Mr. Vreeland said that in addition to chocolate being positioned as a functional food, research is lending credibility to its ability as a nutricosmetic. “Medical studies appearing in mid-2010 on the beneficial effect of chocolate on wrinkles might spur development of chocolate marketed for the beauty-from-within niche,” he said. “The nutricosmetic market is valued at $1.5 billion globally, but very underdeveloped in the U.S., according to The Kline Group. Inventive chocolate makers might try to tap into this market, and if they are successful, it adds another accolade to how versatile the 'Food of the Gods' really is.”
During tough economic times chocolate sales are not only stable, they actually tend to rise. Analysts liken the effect to the “lipstick factor.”
“Economists have noted that lipstick sales tend to rise during economic recessions, as the relatively inexpensive purchase goes a long way to cheer women up. Eating chocolate might have the same affect,” Mr. Vreeland wrote in his report. “When times get tough and household budgets turn frugal, spending a few dollars on a good bar of chocolate becomes a terrific way to leverage a piece of indulgence.”
The Packaged Facts report asserted that the global demand for chocolate is expected to rise over the next several years, “as the market capitalizes on chocolate’s incredible ability to shapeshift into an array of products suitable for the confectionery, beverage, restaurant, hospitality and personal care industries.”
Chocolate is sold in dozens of traditional and non-traditional venues. Packaged Facts cited IRI-tracked data which listed the FDM channel as accounting for just 30% of retail sales. In an interview with Packaged Facts, James Corcoran, the former vice president of Trade Relations with the National Chocolate Association stated that nearly 43% of chocolate sales occur in the non-traditional channel, the largest component of which is specialty chocolatiers (e.g., Godiva, Sees, etc.). The next largest component is cash-and-carry vendors (e.g., bodegas, wholesalers, fund raisers, etc.). Chocolate is also merchandised at military PXs and on the Internet.
“For many chocolate-loving Americans it’s more about the experience than it is about mere consumption. To meet this demand, premium chocolatiers are setting off on culinary adventures, discovering new layers of flavor and textures by experimenting with umami flavors or developing products to match consumers’ moods,” concluded Don Montuori, publisher of Packaged Facts. “This may be a mature market, but it’s also a market that isn’t afraid to innovate, whether that means using savory influences such as bacon and cheese or ethnic flavors such as curry and chipotle. This bold creativity effectively provides chocolate products that satisfy diverse consumer palates at reasonable prices.”