Inside The World Of Craft Chocolate

Taking cues from the coffee and craft beer movements, fine chocolate options are gaining momentum. Brad Kintzer, chief chocolate maker for TCHO Chocolate, helps us better understand this exciting sector.

TCHO Chocolate’s Brad Kintzer

Until recently, it was uncommon to find double IPA beers in corner dive bars, single-origin cold brew coffee on tap at national chains, and Japanese Kobe beef burgers featured on small town restaurant menus. No one could have predicted the meteoric rise of craft quality foods and the way they have captured consumer’s attention, as well as shelf space in the grocery aisles.

It seems nearly every category of food and drink has been touched by this craft food renaissance. As a response, companies of all ages and sizes are innovating to meet the consumer’s desire for new experiences. The world of specialty chocolate is no exception. Although it lags behind other craft pioneers like wine, coffee and beer, there is no doubt that interest in fine chocolate is gaining significant traction.

To best appreciate the dynamics surrounding the potential growth trajectory of fine chocolate, it helps to clearly define what is craft, specialty, gourmet, artisan or fine chocolate. While a singular term or broadly accepted definitions still elude the chocolate world, there are some common threads between the makers who place themselves in these more elevated chocolate categories. To simplify terminology for this article, I will use the term “fine chocolate” as a catch-all for these high quality, small to medium scale, non-industrial chocolatemakers.

One of the founding elements that unites fine chocolate makers is a desire to showcase the diverse flavors and aromas found in specialty cacao. Another commonly shared trait is the use of engaging storytelling to highlight chocolate’s journey from the bean to the finished bar. Finally, many fine chocolate makers see their work as an opportunity to enrich cocoa producer livelihoods around the world, principally by purchasing differentiated cacao at higher prices.

At the core of fine chocolate there is an aspiration that looks to change the world for the better — through better chocolate — presenting an ultimate win-win for the new wave of conscious craft consumers.

The Fine Chocolate Industry Association (FCIA) estimates that in 2017 there were more than 200 “craft” chocolate makers in the U.S., some of which are made up of less than three employees. In total, these account for less than 1 to 2 percent of the total chocolate production nationally. Looking at a much broader definition of specialty chocolate that includes larger scale manufacturers, that number rises to more than 5 percent. This is still a relatively small number when looking at specialty growth in other industries.

For example, the Specialty Coffee Association reports that in 2017 more than 59 percent of all coffee consumed by Americans was considered specialty. As recently as 2010 it was approximately 40 percent. Before 2000, that figure was estimated to be below 10 percent.

Another relevant comparison is craft beer. The Brewers Association reports that in 2017, independent craft beer accounted for more than 23 percent of all retail beer sales in the U.S. That number rises significantly if including the dozens of high quality breweries that have recently been acquired by larger entities.

The future will be very bright for fine chocolate if it follows these growth trajectories, even marginally. Here are a few of the major opportunities and pitfalls related to fine chocolate’s advancement.

The Upsides: Strong Growth Attributes Of Fine Chocolate

It Tastes and Looks Different

Fine chocolate hits the spot for many millennials, foodies and other curious consumers looking for something different from traditional candy offerings. Touting higher cacao content, lower sugar, cleaner ingredient lists, and unique flavor profiles, fine chocolate also offers consumers a sense of people and place through compelling single-origin storytelling. Stunning packaging from many producers is another big plus that can be seen as a luxury indulgence.

It Is Not That Expensive

Even most upper tier fine chocolate can still be purchased for less than $10 to $12 a bar. All things considered, this is a relatively approachable indulgence for a food category’s “best in class.” Chocolate has always been labeled as a sector that prospers in good economic times, and often does even better during downturns because of its relative affordability and comfort factor.

It Tells A Positive Story

Authentic, positive-impact stories continue to be a cornerstone of many customer purchases. Many want to know that what they purchase offers opportunity for people’s lives to improve or “do no harm” at a minimum. While many fine chocolate makers have less-than-detailed metrics capturing their impact on cocoa farmer livelihood, consumer perception is that they are making a positive difference.

The Downsides: Hurdles To Fine Chocolate Growth

It’s Expensive for Everyday

Purchase From a young age, many of us have tremendous loyalty to affordable, familiar brands. While consumer acceptance of higher priced chocolate is increasing, chocolate bars much above $4 on the shelf are still seen as “splurge purchases” for many. Reducing price to meet consumer needs is a huge challenge for fine chocolate makers. Relatively high cost raw materials, labor and packaging combined with small production volumes all can add up to painfully small profit margins — and a challenge to being competitively priced on shelf.

Where and How It Is Sold

Compelling storytelling is a key pillar of fine chocolate’s success. When fine chocolate bars are sold in boutique, well-curated retailers, brand storytelling is easy. Higher price points seem less daunting when coupled with positive impact stories and a clear promise of quality. In a conventional or even natural grocery setting, there is less of an opportunity to differentiate through story messaging. More regularly, consumers might find themselves blinded by comparatively higher prices and overwhelmed by multiple brand choices. Direct-to-consumer online sales offer a promising platform for more impactful storytelling, but shipping of chocolate and maintaining competitive profit margins continues to be challenging.

Consistency

Product consistency is key for repeat purchases. Exploring fine chocolate often requires a different level of engagement. Less sugar, lighter roasting profiles and single origins create inevitable flavor variation. Craft chocolate fans argue this should be celebrated as it offers a more sophisticated and interesting experience. Re-framing product variation to consumers as a positive attribute is possible, especially by using wine and coffee as educational blueprints, but it will take time.

Looking Ahead

Most Americans cannot recall the first time they consumed chocolate. It is a staple that has been with many of us our whole lives. Given that fact, it is surprising how little most of us know about the long and winding journey required to make every chocolate bar. As consumer excitement and curiosity builds around the transparency of our food systems, a view into chocolate offers one of the most captivating and colorful stories around.

Many would agree that chocolate is ripe for innovation in nearly all aspects. Excitingly, there are many promising industry initiatives abuzz. Efforts aimed at modernizing agricultural and labor practices, creation of universal cocoa sensory standards — a key development in specialty coffee’s growth — preservation of heirloom cacao varietals, and exploration of unique chocolate delivery systems are just a few.

As seen with pioneering craft industries like beer, wine, coffee and others, much of fine chocolate’s future success lies with the level of consumer interest in learning, tasting and exploring more.

Any way you look at it, it is a good time to be a chocolate lover. C&ST

Contributor Info

Brad Kintzer is the chief chocolate maker for TCHO Chocolate, vice-president of the Fine Chocolate Industry Association and sits on the board of the Heirloom Cacao Preservation Fund. Prior to joining TCHO, Kintzer was chocolate maker and product developer at bean-to-bar chocolate pioneer, Scharffen Berger, acquired by The Hershey Co. in 2005. He studied botany and environmental studies at the University of Vermont and spent months working on cacao plantations throughout Latin America to better understand the origins of chocolate flavor.