BALTIMORE — Large signs lined the rows of exhibitor booths at Natural Products Expo East conference last week. "World's healthiest" and "all organic" isn't surprising for an event focused on the state of the natural and organic industry, but these phrases described a typically indulgent treat: chocolate.
These businesses look to change a long-standing association between chocolate and guilt, and the timing to do so may be hitting a sweet spot. The founders and managers at health-focused and organic chocolate companies at Expo East said a shift in consumer taste and marketplace has allowed their products to start sliding into the mainstream and challenging the traditional chocolate industry.
Research on the heavily targeted millennial demographic found that they vastly prefer healthy and natural foods. A report from Research and Markets last year predicted, that the international chocolate market would grow 2.4% annually through 2021, and healthier versions of the treat in particular would see a bump. These changes are something small chocolate companies want to capitalize on.
"I have seen a huge change in the last year with the presence of chocolates that have lowered their sugar counts and are organic," said Bonnie Boroian, the founder and CEO of Blissfully Better, a chocolate made with low glycemic coconut nectar. "All of that absolutely helps any of us in the sector trying to give the customer that healthier alternative ... People can have a sweet and enjoy it and not compromise on taste and still go back for more."
"The healthy chocolate rage is now really kicking in. They are not yet competing in the space, but they are now challenging the space for traditional chocolate."
Founder, Innocent Chocolate
Anna Bond, general manager of Fine & Raw, an artisanal organic chocolate maker, said there are now more people who want a "healthy angle" to their chocolate. As consumers demand to know more about what is in their food and want better-for-you options, these chocolate makers, both big and small, say they are making changes to keep up. Fine & Raw, for example, redesigned some of its packaging to more prominently display its "value columns" — clearly stating that the product is handmade in Brooklyn with 100% organic ingredients and no refined sugar, among other health focuses.
"We put that on the back of our bar because consumers find a lot of value in that," she said. "They want to know what they are getting and it is helpful to have all of that information in one place. It is easier for someone to assess if it is right for them."
Patrick Peeters, head of innovation and master chocolatier at Chocolove, said, that he and his peers need to be ready for all these shifts in consumer behavior. His company, which offers all-natural and organic chocolate bars, has reacted by making more dark chocolate and organic products. Chocolate sales have increased for healthier chocolates when health benefits have been proven, and a recent study found that dark chocolate could boost cognitive function and creativity.
However, Peeters noted that one of the industry's largest challenges is that organic chocolates can often price out the regular customer. "[Chocolove] is priced in a good range, and we are geared much more toward quality and taste than profit margin,” he said.
Ty Cherry, the founder of Innocent Chocolate, self-branded as "the world’s healthiest chocolate," said he is targeting "key consumer concerns" since his product is all natural and non-GMO with zero carbs. Innocent Chocolate is a health supplement disguised in organic dark chocolate.
"The grocers are still slotting grocery items as chocolate whereas the healthy chocolate rage is now really kicking in," Cherry said. "They are not yet competing in the space, but they are now challenging the space for traditional chocolate."
A help to the better-for-you chocolate makers is the recent move by grocers and retailers like CVS and Raley's to replace their Reese's, Hershey’s and other indulgences with healthier snacks in the checkout lanes. Big chocolate giants, who often depend on impulse chocolate buys, are struggling to keep up. Morgan Stanley analyst Eileen Khoo recently said that there will be fewer impulse-driven purchases in the chocolate market as consumers emphasize quality over satisfaction, but that leaves room for artisanal chocolates to seize a portion of the market.
CPG manufacturers who have worked to perfect their in-store sales have also struggled to navigate the e-commerce market. Hershey, one of the largest chocolate manufacturers in the world, has been shifting its business strategy by buying more snack brands and working on a digital strategy to combat the changes in the industry.
Boroian of Blissfully Better said the regular chocolate brands have "so much money that they can muscle through anything," but she believes there is now more room for organic chocolate to rise.
A "perception change coming," said Cherry, because people want a way to get additional benefits in the foods they eat and enjoy. "That’s our goal to take something that is recognized as a delicacy or a treat, a candy and say I can still have my cake and eat it too. I can still eat my chocolate and give it to my kids. The consumer is catching on to that message."