Perspectives in the Chocolate Industry

BelgianChocolateStore

Current chocolate trends

Foodchannel recently posted new chocolate trends for 2012 which will be focused on more in 2013. To sum it up tastes move from traditional ones like milk chocolate with nuts to very individual tastes like “strawberry cheesecake” or “brownies”. Chocolate more and more tastes like a daily meal or a desert, or has the shape of the high heel that I wore yesterday. Also chocolate companies nowadays try to satisfy people who take care of health and would only eat something that fits into their diet. Chocolate with around 500 calories per bar seen as part of a healthy lifestyle? But the common excuse is that dark chocolate has less calories. It is known to lower both blood pressure and cholesterol, and has nearly 8 times the number of antioxidants as found in strawberries. Uff, in this way I propably don’t gain too much weight. Or is this maybe only a strategy to sell more of dark chocolate?

Companies more and more feel the pressure of meeting all modern needs also depending on seasons. During Christmas e.g. firms like Lindt offered special Christmas chocolate. But the rest which could not be sold can be find for half the price now in many supermarkets. Maybe there are just too many companies who offer nearly the same type of chocolate?

However, it’s not too late:

Chocolate industry analysis for 2013

Matt Sena, an expert of the industry, analyzed the chocolate industry for 2013.

The chocolate industry offers a wide variety of opportunities for the small business owner, weathers economic recession well and is growing despite increased health-consciousness and calorie counting. (Sena)

Fortunately people still buy chocolate, probably because even the deepest crisis does not stop people from loving chocolate. A recent study in Great Britain showed that 91% of females and 87% of males consume chocolate products. According to Sena the industry will even expand more. Being creative and innovative seems to be the challenge especially during the economic crisis.

Growth will be driven by population growth as well as expansion into new markets, product innovation and rising disposable income levels leading to greater purchasing of premium offerings. (Sena)

The focus goes more towards smaller businesses since they often offer better quality and a more unique chocolate than big companies which produce in huge factories. A small shop also offers special services like gift-wrapping for an individual requirement like a birthday or a business party.  Since in a time of globalization we now try to emphasize more on individuality. “I am the first person who tries this new fabulous taste” seems to be better than “I bought a chocolate bar that is sold 1000 times a day.” People spend less on very expensive issues like a costly journey but don’t want to give up the little ” affordable luxury” of the daily life. As already mentioned in my last post, the fair trade sector in chocolate business also increases since more people demand good labor conditions combined with premium chocolate and are willing to pay more but in this way supporting local farmers.

Also overseas countries increasingly take part of the chocolate hype which leads to greater export of special chocolates from Europe e.g. to China or India. This creates new E-Business possibilities to efficiently export abroad.

Future problems

Nevertheless, with 2013 also more problems will come along causing problems for the expanding chocolate industry:

Cocoa prices can be exceedingly variable as it is largely grown in developing nations with often unstable political situations. (Sena)

Cocoa farmers will not be able to meet coming chocolate demands. Scarcity of cocoa will rise chocolate prices for consumption in the next years. The question is: How much is still ok for my “affordably luxury”? How much is too much which lets my dream of buying premium chocolate recede into the distance? A recent post on investors.com states that there are already researchers developing genetically engineered cocoa trees to produce higher yields. Will this satisfy people who especially take care of good quality and fair production of chocolate?

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A bitter sweet chance – chocolate industry uses ethical business models (Introduction)

“Anything is good if it’s made of chocolate.” Jo Brand

Chocolate

After focusing and taking a critical view on social problems in Latin America I want to come back to the “other America” and talk about its economic potential and business possibilities that come along with this. Passing by the store “Rausch-Plantagenschokolade” I decided to write about the great world of chocolate. I also worked in a cafe which sells expensive chocolate from all over the world. First I did not understand why I should pay five euros for a chocolate bar when I can also have it for 50ct. But after my boss explained me that cheap chocolate has so much chemicals in it – e.g. Milka would use chemicals which make the chocolate melt in your mouth – and that it is produced without caring about quality standards and actually exploiting farmers I finally realized that it is worth it paying a bit more.

Talking about Rausch

Rausch-Plantagen-Schokolade-Puerto-Cabello-43---Kakao_z1Rausch imports chocolate with 43% cocoa from the plantation Puerto Cabello in Venezuela. On their webpage it is said that they cooperate with the ministry of agriculture and local farmers in order to support them and help them to sell their products for a fair price. Other chocolate products from Latin America are Amacado, dark chocolate from Peru with 60% cocoa content and El Cuador, dark chocolate from Ecuador with 70% cocoa content.

“Rausch has not only propelled his company on one of the fastest growth tracks in Europe, he’s re-introduced the concept of truly premium chocolate bars to consumers in Europe and abroad.” Bernie Pacyniak from Nationaldriller

Pacyniak continues that Rausch could more than double its revenues over the last years from 45 million Euros to 100 million Euros and currently has around 550 employees and producing chocolate in other developing countries in Latin America, Asia and Africa.

Why does that happen? Why are people willing to buy chocolate from Rausch?

Since international competition and the effort to lower prices has led to a low-quality production of chocolate, Rausch actually noticed that this was a great opportunity to produce premium chocolate bar with good quality and a “distinct experience to consumers”.

“We would use only fine-flavored cacaos, but opt for regular sugar and lecithin as opposed to cane sugar and no lecithin for our Plantagenschokolade line,” Jürgen Rausch, founder and CEO of Rausch

How does the business model of Rausch support local farmers?

Rausch works together with local governments, brokers, cooperatives and individual farmers in order to find ways how to develop growing regions further and how to support local farmers as well. The philosophy of Rausch is that farmers should be rewarded with a good salary if they work hard. Therefore they try to eliminate the “middleman” which means that there aren’t too many people involved to trade chocolate. In this way the income of local farmers can be higher than it would be in other chocolate companies.

“We also want to help the farmer have a better life by earning enough money so that he can enjoy and provide a future for himself and his family.” Rausch

Rising problems

“High quality raw materials, such as fine-flavored cocoa, are becoming very scarce,” Rausch said. “That’s why we have to do something for the future.” Rausch

Rausch is currently developing more processes of how to produce high quality chocolate more efficiently in the world and they are building new logistic centres to answer to rising demand of good chocolate. The future will be interesting …