SWEET SUCCESS
Chocolatier Godiva has an appetite for Asia
Does life really resemble a box of chocolates, as Forrest Gump observed, in which you never know what you’re going to get? In terms of surprise and unpredictability, life could be more like the chocolate industry.
Despite its sweet, rich and deeply satisfying taste, chocolate as a business is one of fierce competition with players from conglomerates such as Kraft and Nestle to renowned global brands such as Lindt and Cadbury. According to the latest figures by the business research company Euromonitor, chocolate is a big business worth US$100 billion annually.
Revenue in the chocolate industry is strongly influenced by the global economy and other complex factors such as health concerns, and by unpredictability in the supply chain caused by drought or civil war in Ivory Coast, which accounts for nearly 45% of the world’s cocoa supply.
Producers that want to tap rising opportunities to sell chocolate products to a growing middle class around the world are being compelled to develop in order to stay ahead of the game.
Cocoa drinks and chocolate bars are just the start. Producers today are tempting sweet-toothed consumers with more variety —chocolate with vegetables or even exotic fruit assortments for example. Health-conscious consumers, meanwhile, can choose healthy dark chocolate with varying cocoa content up to 90%. If nibbling a chocolate bar is not your style, there are fancy products — milkshakes, chocolate truffles and even soft-serve praline ice-cream.
The image of a chocolate box as a product is also being challenged, especially in terms of product development and the way to consume.
“There is more to chocolate than a chocolate box as a seasonal gift. You can indulge chocolate and experience taste, smell, details and texture. It does not have to be a chocolate bar in the box,” said Guy Riddell, general manager for Pacific Rim at Godiva Chocolatier (Asia).
“You can experience chocolate differently — drink it hot or cold, or in soft-serve ice cream. A chocolate shop can be part of your lifestyle, where you can go and chat with friends, eat chocolate fondue or have a cup of hot drink.”
Mr Riddell and other Godiva executives visited Bangkok early this month to celebrate the opening of the second Godiva Chocolate Shop at Siam Paragon shopping complex. The store challenges the stereotype of the traditional chocolate shop characterised by rows of fancy boxes for presentation as gifts. It looks more like a bright, modern cafe where visitors can indulge in chocolate drinks concocted in special flavours and chat.
The second shop in Bangkok is one of more than 100 stores that the Belgian premium chocolate brand has opened in Asia. The Asia-Pacific region, especially Mainland China, is the new battleground as confectionery makers try to woo millions of new consumers who can afford small luxuries for the first time. As the table shows, the Chinese have a lot of catching up to do to Europeans and others when it comes to eating chocolate.
Not long ago, the only chocolates Chinese people were familiar of were locally made sweets shaped like coins and wrapped in gold foil. Even then, they only consumed them on auspicious occasions.
Not anymore. In the past decade, chocolate has invaded the mainland and consumers are blessed with choices — from ordinary chocolate bars for children to pricier brands such as Lindt, or even premium brands such as Godiva from Belgium and Teuscher from Switzerland.
“When we came to open the first shop in Shanghai in 2009, the landlord even asked who are we? What is Godiva?” said Carmen Chiu, director of marketing and merchandising for China and Pacific Rim, under Godiva (Shanghai) Food Trading Company. Now, there are 107 stores in 44 cities — including 24 each in Beijing and Shanghai. “Suffice to say, we were opening shops at the rate of one shop per week.”
Godiva spent the first three years working to erase Chinese consumers’ “wrong” perception about the negative effects of chocolate and informing them about the health benefits of premium chocolate.
“People have a wrong perception that chocolate is bad for your health,” said Ms Chiu. “That is wrong. If you take a moderate amount of good-quality dark chocolate with high cocoa content, it is indeed good for your health, good for blood pressure.”
Godiva, which was founded in 1926, appears to be riding on the crest of a new chocolate wave, thanks to its brand image. Ms Chiu told Asia Focus that it was fair to say that the brand has no direct competitors in terms of business expansion. Its only obvious competitor appears to be Teuscher, the Swiss house famous for Champagne truffles, yet the latter retains its niche image and has few stores overseas.
Godiva is different. Istanbul-based Yildiz Holding AS, the world’s third largest snack maker that purchased Godiva from the US-based food conglomerate Campbell for $850 million in 2008, is focusing on making premium chocolate accessible to a large number of consumers. Currently, it has about 800 shops globally, 300 of which are in Japan, over 200 in the US, 107 in China and the rest in other parts of the world.
Godiva is now looking forward to having 280 stores in 84 Chinese cities by 2020. Health-conscious Chinese consumers have embraced dark chocolate, and premium chocolate boxes are becoming gifts that convey social status.
Ms Chiu is confident Godiva will be able to retain its exclusive brand identity even as it becomes more accessible. “We not only sell chocolate products. We sell experience and accumulated expertise, and that is the marketing image that will not be changed,” she said.
“We want to be an emotional brand. We want people to come to our shop and be wowed, and experience more details about chocolate, indulge our different flavours or even try our signature soft-serve and then take a selfie and post it on Instagram.”
Godiva has carefully cultivated its traditional epicurean image. While western luxury products sometimes use celebrity endorsers — George Clooney for Nespresso for example — Godiva sticks with using its “Chef Chocolate” brand ambassadors. There are only five of them, in Europe, the US, one in the Pacific Rim and one dedicated to Japan, the country with the most Godiva shops.
Among them is Philippe Daue, a Belgian pastry chef who once worked at the Shangri-La Hotel and Hilton Park Nai Lert in Bangkok. Chef Daue has been in Asia for over two decades — he now lives in Shanghai — and has acquired an Asianstyle palate. He tries to invest chocolate flavours, assortments and local ingredients with an Asian twist. The company also releases special local flavours as seasonal gift such as Chinese chocolate mooncakes.
As chocolate companies refine their strategy, the latest market research by the agribusiness giant Cargill suggests the way to get ahead in the game is to sell chocolate as a premium product and a healthy indulgence. The report, released last December, highlights four key themes for chocolate, which are “indulgent”, “premium”, “healthy” and “sustainable”.
“Today’s discerning consumer is looking beyond value for money. They are better informed than ever before and as our research demonstrates, they consider the contents of their food and its impacts on the future more than ever before. In short, they want food that tastes good, help them to be good and does good,” the report quotes Niklas Andersson, marketing director for cocoa and chocolate at Cargill, as saying.
Consumer research might offer a roadmap f or marketing. But selling products successfully in various markets demands real understanding and positive attitudes.
“You must not assume that what works in one market will work everywhere, and you should not assume that you have a great product, and consumers should buy it if they like it,” said Mr Riddell.
“You need to understand local people, local culture, and you need to understand consumers, what their tastes are and what they look for in order to come up with the right propositions.”
“There is more to chocolate than a chocolate box as a seasonal gift. You can indulge chocolate and experience taste, smell, details and texture” GUY RIDDELL Godiva Chocolatier (Asia)