With producers facing a number of challenges – including increased competition, the uncertainty of Brexit trade negotiations and environmental issues – Jane Wolfe takes a look at the future of the UK chocolate market
The UK is top of the leaderboard when it comes to chocolate spend per head, with Mintel estimating the average Brit consumed 8.61kg of chocolate in 2016. And with 37% of chocolate eaters saying they’re interested in all-natural ingredients, as well as the continuing focus on sugar, this is a great time for natural health retailers to offer high quality, ethical, organic and low- or no-sugar options.
Interest in ethical products remains relatively strong, says Mintel, with 17% of new products claiming some sort of ‘ethical-human’ positioning – which could include fair trade, Rainforest Alliance or other independent ‘bean-to-bar’ certification. Although still a small part of the sector, making up less than 6% of global new product introductions in 2016, launches of chocolate confectionery with an organic claim increased 6% between 2014 and 2016.
“Providing organic cocoa is proving to be a challenge for the industry,” says Marcia Mogelonsky, director of insight, Mintel Food and Drink. “In order to satisfy the growing demand, it will become necessary for more cocoa growers to switch to organic farming methods. As interest in healthy sweets continues to rise, the availability of chocolate that offers organic or all-natural positioning will be desirable, as consumers look for better-for-you options.”
One ethical organic chocolate brand that has recently appeared on shelves is Love Cocoa, founded by James Cadbury, who has taken a leaf out of his great-great-great grandfather John Cadbury’s book: “Cadbury was built on absolutely ethical grounds, and this really inspired me to be as ethical and sustainable as possible.”
Love Cocoa doesn’t carry the Fairtrade logo but is fairly-traded. “We source from a supplier who trades direct and goes above and beyond Fairtrade certification, guaranteeing a higher price. They visit the farmers every three months and work with them to improve the way they farm. Fairtrade is a great initiative but there’s a lot of admin and bureaucracy – the cost is high for the farms, which are usually small family-run businesses. Direct sourcing is best for everybody, it cuts out the middle men and everybody wins – the consumer, the farmer, the company – and it’s great to tell a story and to give back. In future we’d love to have that direct relationship.”
“As a society, we are becoming more aware of what we are eating and where it’s coming from, so it is very important to have the ethics and environmental standards in check,” says Jacques Cöp, founder of raw chocolate producer CocoCaravan. “For us it is one of the most important questions; if we couldn’t produce chocolate in an ethical or sustainable manner, we wouldn’t produce it.”
CocoCaravan doesn’t use the Fairtrade mark either, but its cacao is also from a fair trade source. “Our cacao beans come directly from small landhold farmers and we know what prices they are receiving, which is about double the normal cacao price. Yes, Fairtrade is a recognizable logo, but there are now many more ways of ensuring that the farmer gets a fair price.” The brand’s latest offer is raw bean-to-bar chocolate which is produced using heirloom beans sourced from indigenous farmers in South America.
Crowded house
With an increasing number of organic and ethical players – using high quality and functional ingredients – entering the chocolate sector, producers are increasingly having to fight for shelf space.
Colm Curran, finance director of organic chocolate company Seed & Bean, says a number of things contribute to a brand’s success in the current climate. “You need to have a strong ethos and brand values and stick with them. You need to stand out on shelf too, and of course the taste has to be spot on – that is critical. The brand needs to evolve and change to stay interesting and relevant. I think also part of the brand is how you stand out, so in this day and age you’re talking about social media, how you do your marketing and PR, advertising – it’s a whole plethora of things.”
“We try to do flavours that nobody else does,” he adds. “Like our Coconut & Raspberry and Lavender – we don’t follow the fashion. Together with the fact that the chocolate is organic, Fairtrade where possible, and some vegan and kosher, we are ethical and use compostable packaging, we are offering a unique and exciting experience. We are a small producer and the brand is artisan – in many cases that’s what customers want. All of these things resonate. The USP in some ways is the brand itself.”
Cadbury says Love Cocoa sources from England – working with small independent producers like Summerdown Farm and Malvern Sea Salt – as well as hand-producing all the chocolate in the UK, which many brands don’t. “We have unusual flavours as well, like our limited edition Avocado Bar and our Gin & Tonic Bar. We’re always looking at trends and trying to push the boundaries.” He sees limited editions of inventive flavours as being an effective way to create and retain consumer interest.
Raw chocolate, although growing in popularity, is still a niche market and remains the preserve of health food stores. “Raw chocolate certainly has become more known, but so has veganism, and I think the two go hand in hand at the moment,” says Cöp. “There are many raw chocolate makers in the UK, but percentage-wise, it’s still very small compared to the normal chocolate market,” he adds. “I still don’t see a lot of raw chocolate in mainstream supermarkets, so we’ve still got a long way to go. The raw chocolate market will change, it’s still young, but will continue to grow; new brands will come and we’ll see more amazing chocolate products.”
An occasional treat
With Easter just around the corner, it is time for retailers to start stacking their shelves with seasonal treats. And, according to Mintel, these are big business: seasonal launches accounted for 25% of global chocolate new product launches in 2016.
“Seasonal chocolate tops all chocolate new product development – a testament to the popularity of seasonal treats among consumers across the globe,” says Mogelonsky. “This reflects the fact that these products are typically bought to help celebrate holidays or special occasions. With this in mind, seasonal chocolate is somewhat immune to recessionary pressures as these products are bought on an occasional basis.”
“We’re focusing 100% on gifting this year,” says Cadbury, whose brand started as an online letterbox gifting service. “The usual sort of things, but also trying to think outside the box to see what we can come up with. In the gift market, chocolate is such a good thing to buy, especially if it looks and tastes good and has the right ethics, so hopefully this will be our big growth market for the coming year.” This strategy kicks off with a new range of truffles launching early this year.
Curran says Seed & Bean is also expanding along these lines: “I think gifting is important and we will be adding to our gifting range in the second half of the year.” Seed & Bean is currently concentrating on launching its range of new ‘little ones’ – 25g bars of the brand’s existing flavours in a grab-and-go format.
So what does the future hold for the sector, and specifically UK producers? Well, Mintel flags up Brexit as a potential hurdle. “The impact Brexit will have on the industry is still unknown as negotiations over trade agreements are in early stages,” it says. “However, current thinking suggests that unless some form of a free trade agreement can be agreed upon, chocolate confectionery prices are likely to rise in the long term if tariffs or non-tariff barriers come into place.”
Into the future
“Very clearly Brexit is a challenge going forward,” says Curran. “It brings a whole lot of uncertainty to British chocolate businesses. If you import and export into Europe then this is a major problem. The difficulty is that Europe has a free trade agreement with places like Africa, whereas the UK hasn’t. I think there will be growth in the organic and Fairtrade chocolate market in Europe, but the challenge may well surround how to survive the supply chain because of cost or logistical difficulties.”
Ending on a positive note, Cadbury says: “The premium end of the market is the place to be. This is where the biggest growth will be. People are becoming more interested in what they put in their bodies and they also care more about the ethics, the story and what the brand stands for, so sourcing in a sustainable manner is really important. This is what consumers will increasingly focus on. I also think people will eat chocolate less, but will upgrade to one or two good quality bars a week – which is hopefully where we come in.”
Chocolate Product litings
Organic Raw Peruvian Cacao Nibs from Of The Earth Superfoods
Alara Wholefoods Ltd.
Tel: 020 73879303
E-mail: [email protected]
www.otesuperfoods.com
Of the Earths Organic Cacao Nibs are delicately broken-down chunks of the cacao bean. Chocolate lovers can satisfy their cravings whilst getting a nutrient boost, as cacao is rich in a range of anti-oxidants and minerals, particularly iron, zinc and potassium. Whats more, cacao is well known for its positive affect on the brain, helping to boost ‘mood chemicals’ such as serotonin.Chocolate lovers rejoice – Try replacing chocolate chips for Of the Earths cocoa nibs in baking recipes, or in your next smoothie or porridge bowl. Available in 60g or 180g jars.
Organic Chocolate Bars
Love Cocoa
E-mail: [email protected]
www.lovecocoa.com
Inspired by founder’s great-great-great grandfather John Cadbury, Love Cocoa aim to make British chocolate great again, reinventing chocolate classics with a contemporary touch being free-from: refined sugars, gluten, palm oil and other nasties. Love Cocoa also give back donating 10% of profits to charity. They have a wide range of interesting flavours ranging from Gin & Tonic to a World First’s Vegan Avocado chocolate bar. Prices: 80g Organic bars Trade £2.15 / RRP £3.99 | 20g Organic bars £0.89 / RRP £1.49. Available from: CLF, Diverse Fine Foods, Wholegood and direct
Contact: [email protected]
Essential Fairtrade Organic Hazelnut & Chocolate Spread
Essential Trading
Tel: 0845 458 0201
E-mail: [email protected]
www.essential-trading.coop
Essential Trading’s chocolate spreads are made from cocoa cultivated using organic methods that protect the environment. The process is also approved by the Fairtrade Foundation, which ensures that farmers are protected and paid a fair wage. Chocoholics need no suggestions on how to use this versatile spread but for the uninitiated, it can be used to make cake toppings, to fill homemade chocolate croissants, added to pancakes or chocolate brownie mix, or simply enjoyed on crusty bread or toasted bagels. The range is packaged in bold, distinctive packaging which is full of character and reflects the passion behind the brand.
Organic Traditions Cacao Powder
Kinetic Natural Products Distributor
Tel: 08450 725 825
E-mail: [email protected]
www.kinetic4health.co.uk
Organic Traditions Cacao Powder is derived from raw, organic nibs with nothing added. The nibs are pressed into a paste and the fat content from the cacao is removed, yielding delicious cacao powder. While many other cacao powders have added sugar, Organic Traditions is pure, rich cacao powder in its natural state with no added flavorings or sweeteners. Cacao is high in fibre and contains essential minerals including magnesium, iron and zinc, and a host of antioxidants giving it an ORAC value of 11,000 per 1 heaping tablespoon 20 gram serving. Certified organic, gluten-free, kosher, vegan, non-GMO and raw. No added flavours, fillers, preservatives, additives, sweeteners, carriers, stabilisers or excipients.
Organic Wild Chaga & Raw Cacao
Viridian Nutrition
Tel: 01327 878050
E-mail: [email protected]
www.viridian-nutrition.com
A new potent Nordic Forest Blend beverage shaped by nature and unveiled by the leading brand of ethical supplements Viridian Nutrition. Potent Wild Nordic Chaga extract is combined with flavanol-rich cacao from the Peruvian rainforest to create a bi-cultural melting pot. Harvested in two hemispheres, from organically certified forests to ensure purity and sustainability, and carefully blended to create a pleasant-tasting, nutrient-dense beverage. Each 30g jar contains 30 servings. Part of the 200+ range Viridian Nutrition, founded on the principles of Purity, the Environment and Charity. Dedicated to the continued success of the specialist health food store.
