Dark Chocolate Moves into the Spotlight

Written by Kelly Hayes Madden
Published by Distribution Channels Magazine, Winter 2008

Proven health benefits plus evolving tastes and textures have placed dark chocolate at center stage in retailers' candy section

 After long existing as a minor player in the U.S. confectionary market, dark chocolate has emerged as a rising star of the chocolate category over the past five years. It was around that time that American consumers began to view dark chocolate in a new light, thanks to reports of the health benefits of the antioxidant-rich cocoa bean discovered by research studies here and abroad.

As more evidence of the positive effects of eating dark chocolate continues to surface, manufacturers are rolling out new dark chocolate offerings to satisfy the increased demand. Exotic flavors, bolder taste profiles and more readily available premium options are giving consumers additional reasons to make dark chocolate their impulse indulgence of choice.

"Five years ago, three out of our four top-selling bars were milk chocolate," says Jean Thompson, owner and CEO of Seattle Chocolate Company, which sells its premium chocolate products through wholesale distributors throughout the United States. "Today, three out of our top four bars are dark chocolate. The premium chocolate category is growing faster and faster, and it can be attributed to dark chocolate."

Dark chocolate sales in the U.S. reached almost $1.9 billion in 2006, an increase of 49 percent from 2003 to 2006, reports Mintel International, a market research firm in Chicago. The premium chocolate category, in which dark chocolate plays a prominent role, is growing at an equally impressive pace; sales through all channels soared 129 percent from 2001 to 2006.

"The discerning consumer palate, coupled with a heightened desire for heart-healthy products, is helping to drive dark chocolate as the fastest growing segment of the chocolate industry," states Emily Korns, manager, health and science communications, Mars, Inc.

Seattle Chocolate's Extreme Dark Chocolate is already the company's third best seller.

Chocolate for good health

Dark chocolate typically contains a higher percentage of cocoa (or cacao) than milk chocolate, and therefore, has more of the antioxidant cocoa flavanols proven to help lower blood pressure and cholesterol. Mars devoted more than 15 years of research to the creation of its proprietary CocoaPro process, through which its chocolate retains a higher level of the heart-healthy antioxidant flavanols naturally found in cocoa beans.

Mars' CocoaVia line of chocolate products, made using the patented CocoaPro process, provides at least 100 milligrams of cocoa flavanols per serving. The original CocoaVia selection included a variety of dark chocolate bars, dark chocolate snack bars and dark chocolate covered almonds. The manufacturer recently added milk chocolate bars to appeal to a wider audience of chocolate lovers. In addition, the products are fortified with calcium, folic acid, vitamins B-6 and B-12, and antioxidant vitamins C and E, according to Mars.

A new term, "functional chocolate," has been coined to describe chocolate products like CocoaVia that are designed to provide health benefits. A 2007 Information Resources, Inc. Report states. "With increased availability and greater consumer demand, functional foods and beverages, which offer health and disease prevention benefits beyond basic nutrition, are at the cusp of a major growth wave in the United States," adding products delivering antioxidants and heart protection are among those particularly poised for growth.

Are consumers ready to adopt chocolate as a health food? The potential is there. A 2007 survey conducted by Zurich-based chocolate manufacturer Barry Callebaut revealed that while on 12 percent of Americans currently eat functional chocolate, 43 percent say they would buy such products. Additionally, the Mintel International survey found that almost 75 percent of respondents who purchased premium chocolate in the past three months believe dark chocolate is good for their hearts.

A few chocolate makers are further strengthening the ties between chocolate and a healthy lifestyle by expanding the benefits of chocolate beyond its naturally occurring antioxidants. Barry Callebaut recently announced it has developed a process to produce chocolate with probiotics, friendly bacteria that help the body maintain a healthy intestinal balance. For 2008, Mars is building on its established Dove chocolate brand with the nationwide debut of Dove Vitalize, a dark chocolate enhanced with energy-releasing B vitamins and plant sterols, which studies have shown reduces cholesterol. The manufacturer is also releasing Dove Beautiful, a milk chocolate added vitamins C & E, biotin and zinc, substances that promote healthy skin. Both products will be available in bars and stand-up pouches for portion control.

"The whole idea behind these products is that chocolate has a place in a healthy diet and can be a benefit," says Korns.

Other companies have enhanced the good-for-you aspects of dark chocolate by combining it with other naturally healthy foods such as fruit. Wolfgang Candy Company, Inc., based in York, PA, re-introduced a line of dark chocolate-covered fruit candies in the fall of 2007. The candies feature real blueberries in their natural juices dipped in the company's dark chocolate. The company predicted the raspberries would lead in sales, but the blueberries, also a known source of antioxidants, have proved equally popular. Demand for dark chocolate products has increased 15 to 20 percent, including a rising interest in these items from Wolfgang's fundraising customers.

It's about taste

Talk of antioxidants may spur a shopper's initial foray into dark chocolate. However, many consumers are still more interested in flavor than flavanols, and are eating dark chocolate because they like dark chocolate. "It's more likely that the health reason is a justification for eating chocolate," says Marcia Mogelonsky, senior research analyst for Mintel. A recent Mintel survey of adult buyers of premium chocolate found preferences were evenly split, with 43 percent preferring dark chocolate and 42 percent favoring milk chocolate. (Remaining percentage preferred white chocolate or had no preference.)

As Seattle Chocolates' Thompson points out, "People are starting to feel permission to eat chocolate every day. But at the end of the day, it all comes down to taste. Our philosophy is that eating chocolate is not about taking your medicine. It's about enjoying your favorite treat. Once consumers find a dark chocolate that appeals to them, they won't go back."

The company's Extreme Dark Chocolate variety, now in its second year, has 65 percent cocoa content, a little higher than its regular 53 percent dark chocolate. "It's already our third best seller," says Thompson. She feels 65 percent is high enough-"it's smooth and creamy and not at all bitter."

As consumers explore chocolate offerings with cacao percentages ranging from 35 to 99, manufacturers are adding new dimensions to the chocolate experience through the exotic flavor combinations and textures. "Consumer tastes and palate preferences are expanding," says Jody Cook, director of product publicity for the The Hershey Company. "People are looking for a more robust flavor profile, and dark chocolate provides that," she says. "There is a phenomenon of consumers trading up-from milk chocolate to dark, from dark to a more premium chocolate. It's a matter of today's consumer wanting to explore the next level of chocolate."

Indeed, Hershey offers several "levels" of dark chocolate. Its Special Dark chocolate brand leads the dark chocolate category within Hershey, Cook says. "It's the dark chocolate for milk chocolate lovers." The stronger-flavored Hershey's Extra Dark line has 60 percent cacao content and combines dark chocolate with cranberries, blueberries, almonds and macadamia nuts.

The Cacao Reserve by Hershey's collection, rolled out in 2006, "provides customers with a premium chocolate option," Cook notes. The brand features more exotic flavors and textures, such as a 65 percent dark chocolate bar with cacao nibs (the heart of the cocoa bean), and single-origin chocolate, made solely from cocoa beans harvested from a particular locale.

Ferrero USA, headquarted in Somerset, NJ, combines different textures of dark chocolate in its new Ferrero Rondnoir dark chocolates. A "black pearl" of dark chocolate is enveloped by layers of dark chocolate cream, crispy wafer and cruncy dark chocolate morsels.

"Rondnoir dark chocolates are positioned as a multi-sensory dark chocolate consumer indulgence," says Don Strohrer, category manager-pralines. "Unlike a lot of offerings out there, it's not a bar or truffle or square." Ferrero USA spent seven years perfecting the recipe for the Rondnoir, which debuted in August 2007.

"Initial testing indicated an extremely high level of acceptance of Ferrero Rondnoir dark chocolates among women 25-54," Strohrer reports, adding that the Rondnoir 4.2-oz. Pack currently is the No. 7 ranked premium dark chocolate SKU in the drug channel, based in IRI data.

More heat, less sweet

"I equate the increased interest in dark chocolate to what happened in the wine industry," observes Denise Bruno of Asher's Chocolates, a candy manufacturer based in Souderton, PA. "Consumers want darker chocolate paired with deeper and more exotic flavors, not as sweet." Asher's recently added an all-dark chocolate assortment to its Majestic premium gift box line, featuring three new dark chocolates designed to peak consumer interest-a dark chocolate with a creamy mango puree center, a dark chocolate with a raspberry puree center and a dark chocolate cranberry cluster. "It used to be all lemon creams and buttercreams, but these new stronger flavors complement the dark chocolate."

Mintel's 2007 analysis of the U.S. premium chocolate market noted that "premium chocolate consumers seem up to about any challenge" when it comes to chocolate flavors. "What's hot is dark chocolate with chili pepper and exotic fruits-dark cherries, even goji berries from the Amazon," remarks Minte's Mogelonsky.

Swiss chocolate maker Lindt & Sprungli spiced up its chocolate line last year with the debut of its Creation 70 percent Cherry Chili mousse-filled dark chocolate bar, part of a new collection of premium filled chocolate bars featuring high cocoa content. The manufacturer's Lindt Excellence brand includes an Intense Pear dark chocolate bar, and in early 2008, will launch a Lindt Excellence Chili dark chocolate bar. "These flavor infusions are a nod to chocolate's rich history, but also signal a shift toward consumer connoisseurship," states Thomas Linemayr, president and CEO of Lindt USA, based in Stratham, NH.

Single-origin chocolates have further promoted the idea that dark chocolate is a taste adventure providing, literally a world of choices. Offerings include Lindt Origins Madagascar 65 percent Cocoa Bar and Ecuador 75 percent Cocoa Bar, Hershey's Cacao Reserve Santa Domingo (67 percent) and Sao Tome (70 percent) dark chocolate bars, and Mars' Dove Origins Ecuador, Ghana and Dominican Republic dark chocolates. In addition to 3.5-oz. Bars, Mars offers a stand up pouch with tasting squares of all three varieties. "Retailers can display them in their wine or coffee section," says Korns, noting that wine and coffee lovers already understand and appreciate the effect a product's origin has on taste.

The proliferation of dark chocolate offerings has not been limited to the premium chocolate market. The segment's impressive sales gains also can be attributed in part to new dark chocolate versions of established milk chocolate brands, such as Mars' M&M's Peanut Snickers and 3 Musketeers, which hit retail shelves in 2007. Taste of Nature, Inc. A Beverly Hills, CA, candy manufacturer, expanded its Cookie Dough Bites brand last summer to include a new dark chocolate variety. The 3.1-oz concession boxes of Dark Chocolate Covered Chocolate Chip Cookie Dough Bites are selling in movie theaters and video stores as well as food and convenience stores and mass merchandisers.

Jon Prince, president and owner of McKeesport Candy Company, a Pennsylvania candy distributor, and Candyfavorites.com, an Internet retail site, believes dark chocolate are incrementally expanding the chocolate category. "A person that wouldn't normally have purchased M&Ms now has a new option."

It's about taste

Talk of antioxidants may spur a shopper's initial foray into dark chocolate. However, many consumers are still more interested in flavor than flavanols, and are eating dark chocolate because they like dark chocolate. "It's more likely that the health reason is a justification for eating chocolate," says Marcia Mogelonsky, senior research analyst for Mintel. A recent Mintel survey of adult buyers of premium chocolate found preferences were evenly split, with 43 percent preferring dark chocolate and 42 percent favoring milk chocolate. (Remaining percentage preferred white chocolate or had no preference.)

As Seattle Chocolates' Thompson points out, "People are starting to feel permission to eat chocolate every day. But at the end of the day, it all comes down to taste. Our philosophy is that eating chocolate is not about taking your medicine. It's about enjoying your favorite treat. Once consumers find a dark chocolate that appeals to them, they won't go back."

The company's Extreme Dark Chocolate variety, now in its second year, has 65 percent cocoa content, a little higher than its regular 53 percent dark chocolate. "It's already our third best seller," says Thompson. She feels 65 percent is high enough-"it's smooth and creamy and not at all bitter."

As consumers explore chocolate offerings with cacao percentages ranging from 35 to 99, manufacturers are adding new dimensions to the chocolate experience through the exotic flavor combinations and textures. "Consumer tastes and palate preferences are expanding," says Jody Cook, director of product publicity for the The Hershey Company. "People are looking for a more robust flavor profile, and dark chocolate provides that," she says. "There is a phenomenon of consumers trading up-from milk chocolate to dark, from dark to a more premium chocolate. It's a matter of today's consumer wanting to explore the next level of chocolate."

Indeed, Hershey offers several "levels" of dark chocolate. Its Special Dark chocolate brand leads the dark chocolate category within Hershey, Cook says. "It's the dark chocolate for milk chocolate lovers." The stronger-flavored Hershey's Extra Dark line has 60 percent cacao content and combines dark chocolate with cranberries, blueberries, almonds and macadamia nuts.

The Cacao Reserve by Hershey's collection, rolled out in 2006, "provides customers with a premium chocolate option," Cook notes. The brand features more exotic flavors and textures, such as a 65 percent dark chocolate bar with cacao nibs (the heart of the cocoa bean), and single-origin chocolate, made solely from cocoa beans harvested from a particular locale.

Ferrero USA, headquarted in Somerset, NJ, combines different textures of dark chocolate in its new Ferrero Rondnoir dark chocolates. A "black pearl" of dark chocolate is enveloped by layers of dark chocolate cream, crispy wafer and cruncy dark chocolate morsels.

"Rondnoir dark chocolates are positioned as a multi-sensory dark chocolate consumer indulgence," says Don Strohrer, category manager-pralines. "Unlike a lot of offerings out there, it's not a bar or truffle or square." Ferrero USA spent seven years perfecting the recipe for the Rondnoir, which debuted in August 2007.

"Initial testing indicated an extremely high level of acceptance of Ferrero Rondnoir dark chocolates among women 25-54," Strohrer reports, adding that the Rondnoir 4.2-oz. Pack currently is the No. 7 ranked premium dark chocolate SKU in the drug channel, based in IRI data.

More heat, less sweet

"I equate the increased interest in dark chocolate to what happened in the wine industry," observes Denise Bruno of Asher's Chocolates, a candy manufacturer based in Souderton, PA. "Consumers want darker chocolate paired with deeper and more exotic flavors, not as sweet." Asher's recently added an all-dark chocolate assortment to its Majestic premium gift box line, featuring three new dark chocolates designed to peak consumer interest-a dark chocolate with a creamy mango puree center, a dark chocolate with a raspberry puree center and a dark chocolate cranberry cluster. "It used to be all lemon creams and buttercreams, but these new stronger flavors complement the dark chocolate."

Mintel's 2007 analysis of the U.S. premium chocolate market noted that "premium chocolate consumers seem up to about any challenge" when it comes to chocolate flavors. "What's hot is dark chocolate with chili pepper and exotic fruits-dark cherries, even goji berries from the Amazon," remarks Minte's Mogelonsky.

Swiss chocolate maker Lindt & Sprungli spiced up its chocolate line last year with the debut of its Creation 70 percent Cherry Chili mousse-filled dark chocolate bar, part of a new collection of premium filled chocolate bars featuring high cocoa content. The manufacturer's Lindt Excellence brand includes an Intense Pear dark chocolate bar, and in early 2008, will launch a Lindt Excellence Chili dark chocolate bar. "These flavor infusions are a nod to chocolate's rich history, but also signal a shift toward consumer connoisseurship," states Thomas Linemayr, president and CEO of Lindt USA, based in Stratham, NH.

Single-origin chocolates have further promoted the idea that dark chocolate is a taste adventure providing, literally a world of choices. Offerings include Lindt Origins Madagascar 65 percent Cocoa Bar and Ecuador 75 percent Cocoa Bar, Hershey's Cacao Reserve Santa Domingo (67 percent) and Sao Tome (70 percent) dark chocolate bars, and Mars' Dove Origins Ecuador, Ghana and Dominican Republic dark chocolates. In addition to 3.5-oz. Bars, Mars offers a stand up pouch with tasting squares of all three varieties. "Retailers can display them in their wine or coffee section," says Korns, noting that wine and coffee lovers already understand and appreciate the effect a product's origin has on taste.

The proliferation of dark chocolate offerings has not been limited to the premium chocolate market. The segment's impressive sales gains also can be attributed in part to new dark chocolate versions of established milk chocolate brands, such as Mars' M&M's Peanut Snickers and 3 Musketeers, which hit retail shelves in 2007. Taste of Nature, Inc. A Beverly Hills, CA, candy manufacturer, expanded its Cookie Dough Bites brand last summer to include a new dark chocolate variety. The 3.1-oz concession boxes of Dark Chocolate Covered Chocolate Chip Cookie Dough Bites are selling in movie theaters and video stores as well as food and convenience stores and mass merchandisers.

Jon Prince, president and owner of McKeesport Candy Company, a Pennsylvania candy distributor, and Candyfavorites.com, an Internet retail site, believes dark chocolate are incrementally expanding the chocolate category. "A person that wouldn't normally have purchased M&Ms now has a new option."