Chocolate: No Signs of a Slowdown

Hershey’s steps up its presence with new good-for-you chocolates and a promising new partnership.

By
Joanna Cosgrove
Online Editor

It didn’t take long for the good news about the health benefits of chocolate to spread. According to an article published May 4th by the Associated Press, dark chocolate sales increased 49% to $1.88 billion between 2003 and 2006 and there are no signs of a slowdown in sight (figures were derived from a March 2007 study by Mintel International of Chicago, IL).

Mars Inc. virtually created the market for healthy chocolate with the debut of CocoaVia, while companies like Lindt and Ghirardelli are taking a softer approach, focusing less on the health benefit attributes of chocolate and more on the premium aspect of their respective dark chocolates, offering a broader range of percent dark chocolate varieties to suit an evolving consumer palate that’s becoming almost as sophisticated as that of a wine connoisseur’s.

Hershey, one of America’s most venerable chocolate companies, has also stepped up its chocolate activities by diversifying its dark chocolate offerings with Extra Dark and Cacao Reserve lines. In March, the company announced an expansion of its “Goodness Chocolate” portfolio with the debut of Hershey’s Antioxidant Milk Chocolate and Hershey’s Whole Bean Chocolate.

“Consumers are very interested in the goodness benefits of chocolate, including the antioxidants found naturally in dark chocolate,” said Michele Buck, senior vice president, chief marketing officer, The Hershey Company. “This interest is driving explosive growth in dark chocolate. Now, Hershey’s Antioxidant Milk Chocolate and Hershey’s Whole Bean Chocolate bring the goodness benefits of dark chocolate to the broader milk chocolate category.”

Hershey’s Antioxidant Milk Chocolate features more flavanol antioxidants than the leading dark chocolate (260 mg of flavanol antioxidants per 40 gram serving, versus 110 mg in the leading dark chocolate). According to the company, the bar’s creamy, smooth texture “contains all the goodness of dark chocolate in a delicious milk chocolate bar.”

Hershey’s Whole Bean Chocolate is made using the whole cocoa bean to yield a mildly sweet and smooth chocolate that is lower in sugar (40 percent less than the leading milk chocolate bar) and high in fiber and antioxidants. One serving of Hershey's Whole Bean Chocolate has seven grams of fiber and 180 mg of flavanol antioxidants per 40 gram serving.

Chocolate Giants Unite

The company’s most current chocolate development pertains to its recently inked “strategic supply and innovation” deal with Swiss giant Barry Callebaut, the world’s largest manufacturer of high-quality cocoa, industrial chocolate and confectionery products.

The companies plan to partner on a range of research and development activities with a focus on driving innovation in new chocolate taste experiences, premium chocolate, health and wellness, ingredient research and optimization. A Hershey spokesperson declined to elaborate on the direction and scope of the company’s future health and wellness endeavors.

Under the agreement, Barry Callebaut will construct and operate a facility to provide chocolate for Hershey’s new plant in Monterrey, Mexico. The partnership includes a long-term global agreement under which Barry Callebaut will supply Hershey with a minimum of 80,000 tons per year of chocolate and chocolate products.

Over the next three years, production capacities are projected to increase by 130,000 tons per year, with a significant portion of this production dedicated to supplying Hershey. The total investment by Barry Callebaut will amount to $50 million.

In the company’s “Health and Wellbeing” segment, Barry Callebaut has been “very active in researching the health-enhancing components of the cocoa bean,” said Gaby Tschofen, the company’s vice president, corporate communications. “We have launched a polyphenol-rich chocolate under the Acticoa brand. This chocolate is good for the cardiovascular system, the brain, the immune system and it also has an anti-aging effect as it contains a very high level of antioxidants.”

Patrick De Maeseneire, chief executive officer of Barry Callebaut, commented that the long-term agreement with Hershey will transform his company’s business in the Americas by doubling its production capacities of chocolate in the region. “On a group level, it will increase our volumes by ten% over three years,” he said.