paper 2: innovation in the chocolaindustry sarah kehoe, elliott buscemi, tina oskooei & mariela ferrer
AN overview of the chocolate market the global market
worldwide consumption of cocoa
International consumer tastes remain diverse across the global market. In the US, the best selling chocolate is dark flavored chocolate. In India, chocolate is considered a luxury; therefore, matching price points to income remains key to success. In China and Russia, authentic, all-natural products are becoming a popular demand.
Europe 48% Africa 3% North America 25% Asia & Oceania 9% South america 15%
us chocolate consumption
33%
leading cocoa bean producers
31%
19%
70% Africa 14% Americas 16% Asia & Oceania
17%
Children
Adults (18-44)
Adults (45-65)
Adults (65+)
The Chocolate market in the uK The UK consumer is no longer concerned with brands as they have shifted to concerning themselves with the quality of the product over price and label. The evolving and demanding trends within the global chocolate market have forced the chocolate industry to become more empathetic, flexible and aware of its consumers as it develops new products. Fair-trade certified chocolate is also a factor taken into account by the current consumer, especially when it comes to value. With the communication revolution such as social media, consumers are willing to pay a premium price for chocolate products produced in an ethical manner.
91%
87%
Chocolate consumption
chocolate as a luxury LINDT’S DEMAND HAS LEAD TO AN
8-10% PRODUCTION INCREASE
Chocolate as luxury is a rapidly growing market. For example, in the United States, Lindt, is considered to be a luxury brand and because of the increase in demand for chocolate as a premium product. Nestle has succeeded in capturing the Asian markets such as Japan, where they were able to introduce Kit Kat as a premium product. Demand for premium chocolate products is also on the rise on a more global scale. Countries such as India and Brazil are starting to adopt and demand this trend to be accessible to them as well.
where is the chocolate industry heading? The increase in obesity levels has come to the attention of many consumers and producers. This has caused many companies to reconsider and reposition chocolate to change consumer’s perceptions by making chocolate healthier. Currently, there has been a large increase in sales of sugar free, reduced calorie and fat chocolate products. Studies have shown that dark chocolate lowers blood pressure and cholesterol. Hershey chocolate is creating its new products with a focus on healthier alternatives of dark chocolate. Along with the trend of dark chocolate, there is a wide spectrum of flavors, which have currently dominated the market. Brands such as Cargill have discovered that alongside dark, milk and white chocolate, caramel is an emerging flavor. Belgian chocolate makers have incorporated this new flavor of caramel into their products treating it as an added value. This value has proven to be so successful as chocolate makers have created a line of products containing caramel and branding them as a luxury. Furthermore, these new flavors of chocolate have increased the functionality and its use by introducing chocolates into new industries such as the wine industry. Chocolate has also found its way into the beer and wine industry. For example, Carre Chocolate has partnered with Belgian breweries to create an innovative ChocOBeer, which is chocolate filled with beer as well as beers that contain chocolate flavor in it. The ¨hand-made¨ approach to chocolate products is a profitable advantage for smaller chocolate makers and manufacturers who draw artisanal ingredients to give their products added value by creating a homemade feel. For example, Wild Ophelia’s Peanut Butter & Banana milk chocolate bar uses hand-picked, hand-cut dried bananas. Such products are well-perceived by the health aware consumer therefore adding value to the product.
interview results olivier Deboise International chef
“Savoring chocolate’s numerous health benefits is a nourishing treat for skin and hair; adding shine, vibrancy, and improving the general health of both.”
“The trends seen in the global chocolate confectionery industry, including innovations around flavor and form, ”
CHOCOLATE HAS BECOME AN INGREDIENT RATHER THAN A FINAL PRODUCT. CHOCOLATE IS BECOMING A TREND IN SPA TREATMENTS
Nathalie Belew Spa owner & specialist
“
$
ALONG WITH THE TREND OF DARK CHOCOLATE, THERE IS A WIDE SPECTRUM OF FLAVORS, WHICH HAVE CURRENTLY DOMINATED THE MARKET.
KEY INSIGHTS Cacao beans contain natural chemicals called flavonoids, a type of antioxidant compound that promotes general health and might lower your risk of several diseases. One type of flavonoid, called anthocyanidin, is especially high in cacao beans, along with other compounds called epicatechins.
CHOCOLATE IN THE BEAUTY INDUSTRY
Chocolate therapy is a luxurious treatment for clients in spas and is becoming increasingly sought after amongst salons keen to offer it.
ACCORDING TO THE INTERVIEWERS THE CHOCOLATE INDUSTRY IS AFFECTED BY:
CHANGING FACTORS Studies have shown that Dark chocolate has a positive effect on health.
VS Fair trade cacao farmers
Lactose acid in milk has been shown to help deter wrinkles as well as smooth and refine skin texture.
CHOCOLATE IN THE BEAUTY INDUSTRY
By using chocolate and cacao butter products on your hair and skin, you get to enjoy the delightful chocolate aroma and reap the benefits of antioxidants, vitamin, and mineral, while skipping the fear and guilt of overindulging. Using a combination of real chocolate and heated paraffin wax, chocolate therapy is designed to increase production of serotonin, the happy hormone.
Chocolate treatment benefits include the treatment of fluid retention and cellulite, and how it´s anti-oxidant properties are used to reduce 'free-radicals' in the body.
Manufacturers continue to innovate around a number of flavors, both sweet and savory, and consumers are increasingly curious to try even the most outrageous flavors.
The global chocolate confectionery market is expected to continue to grow in 2015 to top US$91.3 billion, a 4% increase on 2014.
Big corporations
nathalie belew
CHOCOLATE IN THE CULINARY INDUSTRY
For hair, lactose acts as a good humectant that helps curly tops retain moisture. The protein in chocolate is boosted by milk, making it good for “natural” hair, excluding harmful ingredients such as chemical relaxers or permanent colorants.
The first wrinkle-removing chocolate; the ‘anti-aging chocolate’ is not only capable of improving skin conditions, but is low calorie and safe for diabetics. These substances improve the blood supply to the skin, thereby reducing wrinkles and making the skin look younger.
CHOCOLATE IN THE CULINARY INDUSTRY
olivier deboise
THE TRENDS IN THE GLOBAL CHOCOLATE CULINARY INDUSTRY ARE:
FRUITS: WE HAVE ALREADY SEEN A WIDE RANGE OF FRUIT LIKE STRAWBERRY, RASPBERRY AND CHERRY COVERED WITH CHOCOLATE, BUT THERE ARE NOW MORE TYPES OF FRUIT BEING INTEGRATED. PEACH IS ONE OF THE FRUITS THAT HAVE BECOME MORE COMMON.
NUTS: HAZELNUT IS THE TOP NUT INGREDIENT IN CHOCOLATE, FOLLOWED BY ALMOND AND PEANUT. BUT THERE IS ALSO A GROWTH IN PISTACHIO, WHICH HAS BEEN FEATURED IN MORE PRODUCTS THIS YEAR.
CITRUS & CHOCOLATE: THE NUMBER OF CHOCOLATE PRODUCTS FLAVORED WITH LEMON HAS DOUBLED OVER THE PAST YEAR GLOBALLY AND BEYOND SIMPLY LEMON, WE ARE SEEING MORE VARIATIONS IN PRODUCTS WITH LEMON AND CHOCOLATE.
Vegetables: Although still niche, we have seen new chocolate launches in Asia (especially in China) containing vegetables. One of the vegetable-chocolate combos we have seen is a chocolate covered potato chip, which could be considered more of a salty snack plus chocolate.
CEREALS: CERTAIN CEREALS HAVE BEEN INCLUDED WITHIN CHOCOLATE FOR A WHILE, BUT NOW OTHER TYPES OF CEREALS ARE MOVING IN, SUCH AS GRANOLA AND MUESLI GIVING THE CHOCOLATE MORE TEXTURE. OTHER GRAINS MOVING INTO CHOCOLATE INCLUDE QUINOA.
our area of focus potential problems in the future Chocolate is that it could once again return to a delicacy that is enjoyed only by the social elite as cocoa prices continue to rise mainly due to the decrease in cocoa farming. In 20 years chocolate "will become so rare and so expensive that the average Joe just won't be able to afford it." With this to consider there will have to be some real disruptive innovations to help save the chocolate industry for the masses.
Cocoa farmers are stopping farming cocoa due to low payments from companies
consumer levels continue to rise especially in markets which consume most
55+ population will be 1/3 of the population by 2025 so must meet their needs
who
The cocoa farmers are farming more profitable crops such as palm oil and rubber
Chocolate companies profits are being squeezed to keep prices low
BRAZIL
where
WEST AFRICA
2020 gap between chocolate consumed & produced reachs 1 million tons
COSTA RICA
when
2050 temperature rise caused water shortages in key chocolate growing areas
Mix chocolate with other products as an ingredient rather than the product itself to reduce the cost How can we use the waste from the chocolate process to create a new profitable product
CHOCOLATE CORPORATIONS
Loss of crops due to drought, disease & water shortages from global warming
Creating new crop breeds more resistant to disease have less flavour & taste
2020 chocolate is too expensive for the average person to afford
How can we increase profit by tapping into other industries / markets
what
A lot of cocoa plant is wasted that has properties used in beauty & health industries
How can we share the skills and education from and to these poorer areas as to how to get the best crops, beat diseases and increase crop growth using open innovation platforms?
Farmers choose other markets & crops ahead of cocoa due to poor earnings
Cacoa plant can only be grown in places which tend to be developing nations
How can we create new breeds of crops without affecting the flavour
How How can we increase the wages for farmers without reducing the profit margins
Areas of focus One of the main problems for the future of chocolate production lies in the farming of the crop. For companies to be willing to pay more we believe that we need to offer higher profits and other revenue streams to offset this higher cost. It would be great if companies would just pay more but we realise this isn't realistic so we propose that we focus on the 4 areas above in the how and plan to do this by tapping into the health market. This could be through partnerships or creating an area within their current company to concentrate on this new sector.
references http://www.pewsocialtrends.org/2008/02/11/us-population-projections-2005-2050/ http://www.statista.com/statistics/238723/percentage-of-us-chocolate-consumption-by-age-gro up/ http://www.bloomberg.com/news/articles/2014-11-14/to-save-chocolate-scientists-develop-new -breeds-of-cacao http://www.popsci.com/science/article/2010-11/future-chocolate-will-be-rare-delicacy-analystssay http://www.confectionerynews.com/Commodities/Future-of-chocolate-Next-generation-of-coc oa-farmers http://singularityhub.com/2015/02/04/whats-the-future-of-chocolate-tech-innovation-and-conn ection/ http://www.bbc.com/news/science-environment-30641613 http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/taste-of-the -future.pdf