What the Chocolate Industry Needs is A $100 Bar of Chocolate
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Opinion
Ive been saying this for some time, and I will continue to press my case: when it comes to efforts to raise the apparent value (and price) of chocolate, the model should not be wine. The model should be coffee.
For the first 100 years after it became fairly popular (ca. mid-1800s) coffee was an industrial product produced almost exclusively in factories, with little consideration for quality. The main goal was simply to sell as much as possible at the lowest price possible. Sound familiar?
The specialty coffee movement completely transformed this model. I was part of the second wave off coffee, and when we started selling gourmet coffee and espresso beverages in the 70s and 80s people were, to put it mildly, skeptical. The idea that there even was such a thing as gourmet coffee seemed ridiculous to many people. It was like claiming you had gourmet milk. Coffee was a commodity, and commodities were, by definition, the opposite of gourmet.
Nearly every day we had to explain to customers why they should pay so much more for our coffee drinks. After all, it was just coffee. Also, people thought our coffee was too strong, and would often ask is to water it down so that it tasted normal. Again, does this sound familiar?
But heres the thing: over the course of less than five years people stopped questioning our pricing, and they also quit asking us to water down our coffee. We stopped being a rare (and odd) treat and instead turned into a necessary part of the daily routine. And this, by the way, was all before Starbucks. Starbucks, despite all of their legitimate shortcomings, turned a racecar into a rocket ship.
Now, across the country, the specialty coffee business remains nearly entirely non price-sensitive. Paying $3-$5 for a coffee drink is the new normal, and even including inflation, the average price of retail coffee beans has probably gone up by 20%-30%.
More interestingly, the top tier of coffee beans has gone up considerably. These days there are numerous specialty coffees that cost $50-$80 a pound, and the high end can go much higher. For example in June of this year Stumptown Coffee paid over $12,000 for a mere 150 pounds of a varietal of green beans from Guatemala. Thats over $80 a pound, which means that once roasted this coffee will almost certainly sell for a minimum of $250 a pound. Probably more. And I doubt that they will have much trouble finding willing buyers.
This is what the coffee industry has done in only several decades. And in my opinion, if you want to see $100 chocolate bars some day this is the path to follow. In less than 25 years the American specialty coffee industry went from nothing to a multi-billion dollar juggernaut. And in the same period of time coffee went from a cheap commodity to a respected and profitable gourmet product. Everything that the new wave of chocolate makers want has been accomplished by the specialty coffee industry. Why arent we paying more attention to that?
When I was at the Northwest Chocolate Festival a few weeks ago there was a seminar in which exactly this question was put to a panel of industry insiders: how can we get chocolate priced along more of a spectrum, like wine? Of course like wine. Always like wine. And of course everyone proceeded to talk about how great it was that wine could sell for $10 or for $5,000 and how chocolate needed to be and deserved to be more like this. Which led to the inescapable (and in my opinion completely erroneous) view that the business model for chocolate had to be more like the one used for wine. Nobody of course had any idea how to make that happen, but it seemed as if everyone agreed that this was the goal.
But in my view this is not going to happen, because wine has a unique culture that cannot be and will not be replicated by chocolate. Thats the bad news. The good news is that there is already a business model that could serve as a nearly perfect blueprint for how to move the chocolate industry forward, and it CAN be replicated by the chocolate industry.
You want a way forward? You want a business model that will yield a profitable industry along with customers who will spend up to $50/ounce for chocolate? Quit thinking wine. Start thinking coffee.