Dark chocolate captures a marketing sweet spot
Kei Okumura is an unrepentant chocoholic with a preference for the dark side.
The Silver Lake mother of an infant son reduced her chocolate munching during her recent pregnancy, but now she’s back at Trader Joe’s several times a week purchasing bars of dark chocolate.
“I always have two to four bars of different chocolate to nibble on daily,” said Okumura, who figures she spends about $12 a week on the candy and has spent as much as $8 on a single bar.
At a time when overall chocolate sales are as flat as a Hershey bar, customers such as Okumura are fueling a surge in consumption of dark chocolate, typically characterized by its bitterness and hints of coffee and berries. And it’s part of a big increase in sales of premium chocolates as well.
Hurt by obesity and sugar concerns, U.S chocolate sales fell 1% last year to just under $16 billion, according to Packaged Facts, a market research firm.
Yet the dark chocolate segment of the market grew almost 15% to $4 billion last year. It now accounts for 25.1% of all chocolate sold and is expected to gain an even larger share in coming years as consumer tastes shift. Milk chocolate sales slid 5.5% last year to $11.7 billion.
Okumura, 35, said she was intrigued by the claims that dark chocolate is more healthful than other forms of the confection, but she really likes the taste.
Dark chocolate has gained cachet as a food -- like almonds, blueberries and red wine -- that studies say is good for the heart.
That’s because it has a high concentration of plant compounds called antioxidants, or flavonoids, which recent small studies have shown to improve cardiovascular function, said Dr. Leslie Cho, a cardiologist and researcher at the Cleveland Clinic, a large research hospital in Ohio.
“These are intriguing studies, but they all need more research,” Cho said.
Physicians once thought that large doses of vitamins E and C, also both antioxidants, would improve cardiovascular health, but new research has found that large doses of the vitamins had no benefits and in some cases were actually harmful, Cho said.
Regardless, consumers are jumping at the chance to redefine chocolate as a health food, said Curtis Vreeland, a Packaged Facts senior analyst.
As a result, the number of new dark chocolate products tripled to 926 last year from 2002 and accounted for 63% of all new chocolate products introduced in 2006, Vreeland said.
A year ago, Burlingame, Calif.-based Guittard Chocolate Co. introduced Nocturne, a bar that has a 91% cacao content. That means 91% of the confection is either ground-up cacao bean or pure cocoa butter, and it is pretty bitter, said Gary Guittard, president of his family-owned business
“We thought the percentage would be too high for most people,” Guittard said. “This was basically a product for chefs, but we were surprised how it took off with consumers. People will buy it and eat a square a day.”
Mainlining cacao, however, isn’t for everyone.
“I like the sweetness and creaminess of milk chocolate,” said Natalie Mach, a Thousand Oaks nurse who also has solid chocoholic credentials.
Mach trolls Bristol Farms after Valentine’s Day and Easter, snapping up the fine chocolate brands in holiday-themed packaging at half price. Mach, 46, also likes to frequent See’s Candy and Godiva chocolate shops.
Mach is a typical consumer of the booming premium chocolate business.
Sales of premium chocolate -- anything that sells for $8 or more a pound -- jumped 10.9% to $2.7 billion in the U.S. last year, Vreeland said. See’s Candy starts at about $14.50 a pound and Godiva sells for $38 to $40 depending on what’s ordered.
People are searching for chocolate, both milk and dark, with better ingredients, Vreeland said. They are buying chocolate in which the cocoa comes from a single county or farm, is infused with exotic flavors such as lavender or cranberry, or is organic.
Okumura has even sampled a Vosges Haut-Chocolat bar that’s flavored with ginger, wasabi and black sesame seeds. Vosges sells it and other exotica, such as a bar made from Indian green cardamom, organic California walnuts, dried plums and Venezuelan dark chocolate, for $7 for 3 ounces.
“It is very funky, but I always try out the new chocolates,” Okumura said.
Companies can sell such exotic confection concoctions because “Americans are traveling more and have become too exposed to different styles of cooking, some of it just trying to cook healthy and fresh, and people like to do something different. There is a certain wonderment to it,” Vreeland said
“It follows on the trend of sophistication of people’s palates,” he said. “This hit the coffee industry about 10 years ago.”
Guittard said sales of premium chocolate were up over last year and represented an increasingly important portion of his company’s business.
Hershey, Mars and Nestle, the biggest U.S. chocolate brands, are also moving into the high-end business.
Hershey -- best known for its Hershey bar -- launched an upscale Cacao Reserve brand last year. It also owns artisan chocolatier Scharffen Berger Chocolate Maker Inc., a Berkeley confectioner known for its dark chocolates and cocoa, and recently acquired Ashland, Ore.-based Dagoba Organic Chocolate. Nestle of the Crunch bar fame owns the Perugina brand. Mars, which sells the ubiquitous M&M;’s, owns Ethel’s chocolate.
But even as the sales of premium chocolate are growing, the Grocery Manufacturers of America, a trade group, has asked the Food and Drug Administration to let confectioners substitute cheaper ingredients -- vegetable oils and milk protein concentrates -- for cocoa butter.
The FDA is considering the proposal and no decision has been issued, but Guittard, See’s Candy and other chocolatiers have filed objections with the agency.
“In face of the growth of really good products, they want to water down the category,” Guittard said.
It will be an important ruling for the chocolate industry. America is the world’s largest chocolate market, accounting for 21% of the global consumption, Packaged Facts said.
“People are really interested in foods. They want to know who made them, how they were made and where they came from,” Guittard said.
And they love it when something they like turns out to be healthful, he added.
Yet Cho, the cardiologist, doubts people will ever gobble their way to good health, no matter what future studies discover.
“If you are a couch potato,” Cho said, “eating a lot of dark chocolate is not going to make you healthier.”
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