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Guilt-free chocolates:
Have your chocolate and eat it, too!
When you think of chocolates – you probably think of Hershey, Mars
or Cadbury - but that may not be for long. Barry Callebaut, the
world’s biggest chocolatier may begin to occupy some mind
space in consumers’ heads very soon with the introduction of the
first antioxidant, guilt-free candy which is actually good for you!
Barry Callebaut has a lot of things going for it - as the
only
vertically
integrated player in the $58 billion chocolate industry, it processes
15% of the globe’s entire cocoa production and also competes
with the likes of Hershey and Mars in the business of making and selling the final product -
chocolates
.
At Barry Callebaut’s chocolate factory in Belgium – the largest in the world - sophisticated
machinery extracts kernels from the cocoa beans to produce cocoa liquor which, after it is
refined, is separated into cocoa powder and cocoa butter. These ingredients then go through
a complicated process to create chocolate products for food giants like Unilever, Kellogg and
Nestle. Barry Callebaut has also moved into supplying retailers like Wal-Mart that want their own
private label brand of chocolates.
Chocolate making at this level shares a lot with the fashion, eyeglass and watchmaking
industries. You need the volume
and
good marketing to be profitable. So Barry Callebaut has
been trying to create a “super premium” brand to compete with the classy brands like Lindt
Chocolates. Barry Callebaut also wants to be known as a well respected global brand, not just
as a European brand.
To achieve this, the company needs to boost its presence in Asia, as well as in the US – not an
easy feat! Chocolate is considered an exotic Western foodstuff for most of Asia. The Chinese
consume just 1.8 pounds of chocolate per capita annually while the Japanese consume just 4
pounds per capita. Compare this with 11.7 pounds in the U.S. and 22.7 pounds in most of
Western Europe.
To address the global challenge, Barry Callebaut has opened a
large plant in Singapore, complete with a “chocolate academy”
to teach aspiring Asian chocolatiers everything they need to
know about fine chocolate. This strategy is working; Asia is now
their fastest-growing market.
In the U.S., Hershey Foods is America’s brand leader in the candy
industry, with annual revenues of $ 4.4 billion. Hershey is far more profitable than Barry
Callebaut. But Hershey has a major weakness; it is not vertically integrated like Barry Callebaut.
To increase its presence in the U.S., Barry Callebaut is using its army of sales people to pitch
supermarket chains on carrying high-quality private label brand chocolates and seasonal
chocolates for Valentine’s Day, Easter and Halloween.
The biggest advantage Barry Callebaut may come to have over its better known U.S.
competitor is its newly developed “healthy” line of chocolates: boxed chocolates made with
added fibre or with rice powder (for lactose/milk intolerant people) that are actually good for
you – and this makes them “guilt-free”. They can also boast that they have invented the
world’s first sugar-free chocolate that actually tastes like the real thing. All these are, of course,
patent protected.
How have they done it? In the normal chocolate production process, the polyphenols are
destroyed during the cocoa fermentation and heating stages. But Barry Callebaut has
patented a production technique which extracts the polyphenols early on in cocoa processing
and then restores them during the final stages of chocolate production. Cocoa is rich in
polyphenols; antioxidants that provide beneficial effects on cholesterol, cancer, blood pressure
and long-term memory. Until now, the down side of consuming too much chocolate was an
increased risk of weight gain and diabetes. Thanks to Barry Callebaut’s developments, that is
no longer the case.
One major weakness Barry Callebaut has is a lack of brand
awareness and poor branding strategy. At present their Sarotti
brand’s logo is a gnome-like character in a turban with pointy
shoes – suggesting that they need to learn the art of global brand
building. They obviously need a lot of help in marketing their
products, which is why they have come to you.
On the following pages you will find five specific questions related
to the marketing of this guilt-free chocolate. Answer 4 of the 5 questions in the space provided.
Source: edited from http://www.forbes.com/forbes
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