Popcorn to ruby bars
How chocolatiers are branching out
● With the market for traditional candy bars in developed countries flagging as consumers shun sugary items for healthier treats, food companies are trying to make chocolate more appealing.
Their tactics include gimmicks like Ritter Sport’s hemp-infused Chocolate and Grass bars (they don’t get you high), new flavours and colours as well as formulas that cut down on sugar.
Some chocolatiers are even diversifying away from candy. Hershey, which began selling its classic bar 120 years ago, is moving into popcorn and potato chips, while Mars said in November it would buy a stake in health snack firm Kind. Just two months later, Nestlé agreed to sell its US confectionery unit amid falling revenue and a focus on products like coffee and water.
“Sugar is portrayed as the new tobacco,” said Eric Bergman, a commodities broker at Jenkins Sugar Group.
“Consumers are now shifting away from the iconic, sugar-filled chocolate brands that we know and into healthier foods. The largest chocolate companies have followed suit and are transitioning from chocolate companies into snack companies.”
While lower cocoa prices helped improve demand more recently, there’s a growing push to discourage consumption of sugar, which makes up almost half of an average chocolate bar. Advocacy groups are urging people to cut back and governments are taxing sugary drinks.
To counter health concerns, Nestlé is selling slimmed-down Milkybars in the UK and Ireland as part of a programme to use 30% less sugar. The bars include a type of sugar that dissolves quicker in the mouth, but produces a similar taste to before.
Hershey’s almost $1-billion (about R13.3billion) purchase of Amplify Snack Brands, which also sells protein bars, shows how the industry is branching out as it contends with falling demand for sugary products. The moves come as Euromonitor International sees 2018 chocolate sales growth in Western Europe and North America below levels of several years ago.
There are some bright spots for chocolate consumption. Sales of premium brands such as Lindt & Sprüngli were on the rise, demand in developing countries was growing and consumers were increasingly willing to pay more for dark chocolate, which contains more cocoa and less sugar, Bergman said.
Millennials are keen to try new varieties, prompting more flavours and artisan brands.
Ruby chocolate is one example. Nestlé has been quick to adopt the first new colour in eight decades, which was introduced by No 1 cocoa processor Barry Callebaut last year and is shaded pink using only natural ingredients.
Germany’s Ritter Sport, which sold out of its limited cannabis bars in just two days, has
Sugar is portrayed as the new tobacco
Eric Bergman Commodities broker at Jenkins Sugar Group
also offered quinoa bars in the country. Cargill markets caramel-flavoured white chocolate and makes lactose-free dark chocolate.
“People are beginning to look at different tastes, different flavours,” said Gerry Manley, head of cocoa at Olam International. “They are beginning to want ingredients to mix together themselves. You are getting a lot more artisan type of chocolate.”
Consumers also wanted to understand how the cocoa in their products was produced and if it met ethical standards, said John George, an analyst at Euromonitor.
This month, Mars said it would spend $1-billion on sustainability, including making operations more energy- and water-efficient as well as making an effort to buy directly from farmers.
Some customers even want more say over what they buy, according to Andreas Ronken, CEO of Ritter Sport, which lets consumers vote on future limited editions.
“Consumers are increasingly asking themselves: ‘Where does my food come from?’ ” said Wyatt Elder, director of research and development at Cargill Cocoa & Chocolate, and Ilco Kwast, marketing director at the company.
“There is a change going on in the marketplace, not just among millennials but across age groups and geographies, which will impact on us and other manufacturers. Standing still is not an option.”