Chocolate? Its Hot
BY Becky Aikman, Newsday, November 5, 2007
Suddenly, it's everywhere.
At the cash register in the supermarket. Just beyond the panty hose at T.J. Maxx or the double-A batteries at Staples. Even next to the lint brushes and plastic hangers at Bed Bath & Beyond.
It's premium chocolate, once a rare indulgence, now a mainstream treat all across Long Island. High-end chocolate bars, available a few years ago only in specialty food stores, now tempt customers in the checkout lines of supermarkets, discount stores and shops that have nothing to do with food.
Mass-market chocolate makers are feeding the trend. Hershey Co., Cadbury Schweppes and other makers of traditional candy have started competing with French and Swiss manufacturers in the deluxe market, buying up small, artisanal chocolate brands or starting their own deluxe lines.
"Years ago when I traveled to Europe, chocolate is what I brought back," said Helga Singer, 67, of Smithtown, who often visited her native Germany. "I would bring one suitcase just for chocolate." Now she buys extra-dark premium Lindt bars at Uncle Giuseppe's Marketplace, her local supermarket. She could just as easily find them at Waldbaum's or Stop & Shop.
Not your father's chocolate
Connoisseurs of premium chocolate can choose from a broad array of bars with labels that trumpet the percentage of cacao, which is derived directly from cocoa beans, or the country of origin - even, in some cases, noting a specific estate of origin.
Consumers can approach chocolate the way they do wine, coffee, cheese or olive oil. It's possible to say, "I prefer single-origin, 70-percent-cacao Venezuelan with top notes of cherry and grass and a lingering flavor of pineapple."
In other words, we've come a long way from the humble Hershey bar (30 percent cacao, by the way, although it doesn't say so on the label).
"There is a real taste difference in them all, and it really is amazing how you can start to develop a nose for chocolate," said Marcia Mogelonsky, senior analyst for Mintel International Group, Ltd., a market researcher in Chicago.
Industry figures show sales of chocolate overall growing only 1 to 3 percentage points a year for the past 20 years. But Mintel's research shows sales of premium chocolate increasing 129 percent from 2001 to 2006, when it reached $2.05 billion, about 13 percent of the total chocolate market.
There's no industry standard for what makes chocolate premium, but generally it contains high-quality natural ingredients - cocoa and cocoa butter, which are both forms of cacao, along with sugar, vanilla and not much more. Mintel says that premium chocolate generally sells for $8 a pound or more, twice the cost of everyday chocolate, which may include a long list of artificial flavors.
Exclusivity is part of the appeal. "If there is one over-arching consumer trend today across every product category, it would be trading up," said Joan Steuer, president of Chocolate Marketing in Los Angeles. "Everyone wants the best that they can afford. Chocolate falls right into that. It's a small indulgence, and yet it holds a lot of power to make us feel good."
And it's good for you
Chocolate is wildly popular to begin with - Mintel says only 15 percent of consumers never eat a chocolate bar. Now its feel-good reputation is even stronger, thanks to medical studies suggesting that chocolate, especially dark chocolate, contains flavanols and antioxidants that may lower blood pressure and help reduce rates of heart attacks, cancer and diabetes. Assuming the extra calories don't get people first.
Now that 42 percent of those who eat chocolate buy some premium products, another fact in the Mintel survey, traditional U.S. candy companies are happy to oblige them. Hershey is hardly abandoning its popular milk chocolate Kisses, but in the last two years it has bought the top-of-the-line California chocolatiers Scharffen Berger and Joseph Schmidt Confections, as well as the Oregon brand Dagoba Organic Chocolate. Their labels don't mention the Hershey connection, but the company, which already commands plenty of shelf space in supermarkets, has introduced its premium brands there.
The company also launched a line of its own called Cacao Reserve. The attractive brown cardboard packaging specifies the cacao percentages and places of origin, including Java, Ecuador and several countries in Africa. In July, Hershey agreed to develop a premium line for Starbucks, too.
Meanwhile, Lindt & Sprüngli, a Swiss company with a strong U.S. presence, now owns California's Ghirardelli Chocolate, giving it prominent supermarket placement. Nestlé launched a high-end Chocolatier line of baking chocolate, in part to compete with Ghirardelli's popular premium chocolate chips. And Cadbury Schweppes now owns the organic label Green & Black.
Store brands go upscale, too
Retailers ranging from Trader Joe's to Target tout their own premium brands, and other stores keep giving more space to the rest. Waldbaum's supermarkets entered the premium chocolate category two years ago with such brands as Lindt and Ghirardelli, and shelf space in the stores is already too small. Last year sales grew more than 50 percent.
"The American consumer is enjoying a new experience," said spokeswoman Patti Councill. "The taste is totally different from what everyone is used to."
Whole Foods Market has expanded the shelf space devoted to chocolate four to five times in four years. The Jericho store is expanding and adding new products. Shimme, who goes by one name and is Whole Foods regional coordinator for chocolate, tries to provide customers with unusual experiences, like the 70 percent cacao Sumatran bar that's his favorite.
"People look at it like a specialty item, like coffee," he said.
At Dan's Key Food, a supermarket in Kings Park, sales increased 20 percent last year, estimated Robert Glaudino, the assistant manager.
"People are willing to spend money for high-end chocolate now," he said. He and his friends have started entertaining with chocolate tastings at home, pairing them with red wines.
Fred Paul, the general manager of Uncle Giuseppe's in Smithtown, said he sells a lot of premium chocolate to people who entertain. "They want to be cutting-edge," he said. "They want to show their friends that they're serving them fine foods and fine wines and fine chocolates. It's always about change and about being a little bit different."
His store has taken the trend one step further with the Choctal line of ice creams in a variety of chocolate flavors by country of origin. The Borneo pint promises a touch of caramel at the end of a long, lingering finish. One from Santo Domingo claims to have "undertones of mocha, licorice and wood and a light, lingering flavor note of nutmeg and cloves."
One of the clearest signs of premium chocolate's popularity is its appearance in such unexpected stores as the housewares chain Bed Bath & Beyond. "Why not?" said spokeswoman Catherine Gentile. "Everyone loves chocolate."
Even Pet-Smart stores looked into adding deluxe chocolate to their merchandise mix, said spokesman Jim Kriznauki, but they feared some customers might feed it to their dogs.
OF INTEREST
Forty-two percent of people who eat chocolate buy some premium products, according to researcher Mintel International Group.
CHOCOHOLICS DELIGHT
Year Sales in millions Percentage change
2001 $896
2002 1,222 36.4%
2003 1,400 14.6
2004 1,560 11.4
2005 1,790 14.7
2006 2,050 14.5
SELF-INDULGENCE
Of those who bought in the previous three months, more than 80 percent admitted they treated themselves.
82% Themselves
42% Spouse or partner
33% Another family member
20% Children
NOTE: Answers were not mutually exclusive.
SOURCE: MINTEL INTERNATIONAL SURVEY, MARCH 2007
Copyright © 2007, Newsday Inc.
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