Forum Activity for @Keith Ayoob

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

OK, so it would appear that Clay's $100 bar is perhaps closer than we think. My opinion on this is from that of the consumer, not as an industry insider and is thus: "Have you lost your minds? Expensive chocolate, I'm there with you. But 'non-believers' still can't fathom us paying $10 for a good bar. Up it by 10-fold and it starts to look like the consumer, even the elite consumer, is just getting screwed. The actual cost of a $100 bottle of wine may not be greater than that of a $10 bottle of wine, to be sure. And there may be people who will gladly pay $100 for a bar of chocolate. But there are also people who will pay $800 per couple to eat at Per Se in NYC. The question then is, what are you paying for? The same quality meal could be had elsewhere, but there's the view, the cache, etc. A bar may not be able to claim all of that. And wine does get people feeling no pain. Chocolate makesus feelgood and all, but not sure it's the same thing. (Personally, I prefer the effects of chocolate over those of wine, but I may be in the minority.) At the endof the day,a $100 may be good for the industry, but it also may not. If the public rejects it as being toooutrageous, thenit may end up being discounted at some level. That wouldn't help either side of the industry/consumer coin and it would make those few who paid full price look like idiots. People never like thinking they got taken to the cleaners.

Just thoughts fromsomeone who lots of people think spends too much on chocolate.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

The most expensive chocolate that I have bought was a Soma Hawaii 2011 bar-- $46/100g. ($11.50 for 25g.)

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

I agree with using 100g as a benchmark.

FWIW I paid $34/100g for Domori Chuao 2011. ($8.50 for 25g).

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Here is a $44 bar of chocolate. Forte Fortunato #4 .($20/45g = $44.44/100g.)Made from, and I quote from their website, "the rarest chocolate in the world". I bet the "colorful storybook depicting its amazing discovery" cost a quite a bit to put together too.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Clay

Re: your question, Still the questions remain, what are more of the characteristics that define this $100 bar?

My take on this is similar to Lanes. Among other things I own a marketing company, so from a purely marketing perspective it seems to me that a legitimate $100 chocolate bar requires the same three things as any other product that is priced in the top tier and substantially above the norm:

1) A level of quality that is significantly and unquestionably above the norm.
2) A level of rarity that makes the item prized beyond even the issue of quality.
3) A pool of possible customers who can be identified and reached, and who have both the desire and ability to spend money on this product.

And here in my opinion is where we run into the main problem. When we ask whether or not any chocolate exists that is worth $50/ounce, or what the traits of that chocolate would be, we are asking the wrong questions. The issue is not the product. The issue is the customer. And by that I mean that there is no pool of customers for a $100 chocolate bar. And if there is no customer for a $100 chocolate bar, then there is no $100 chocolate bar. And there are no meaningful traits for a product that cannot be sold.

Im not trying to be cynical for effect. I think that this is an important topic. But I also think that the discussions I see about this nearly always confuse what generates value and therefore pricing. I think its critical to remember that the makers control quality, but the buyers control value.

Lets recall the history of lobster. Until the mid-19^th century lobster was considered garbage food. It was only eaten by the very poor, and even then only if nothing else was available. Servants on the east coast even had it written into their contracts that they could not be forced to eat lobster more than twice a week. Suffice it to say that one of the most popular uses for lobster at that time was as fertilizer. It wasnt until well into the 20^th century that lobster became a gourmet item. Now imagine a discussion in 1850 about the traits for a $50 lobster roll. It would have been a short conversation, but not for lack of quality. The reason you could not have sold a $50 lobster roll in 1850 was not that the quality was not possible. The reason is that the customer was not possible.

And at the risk of sounding like a broken record, the same thing applies to coffee. What are the traits of a $100 pound of coffee? In 2012 we can now delineate those traits. In 1972 we could not have done so because there were no customers for that product then. It took the specialty coffee industry 40 years to get to this point, and there is still much work to be done. Currently, at least in the U.S., it does not appear that craft chocolate is anywhere close to this.

The good news is that Americans love chocolate. The further good news is that the American appreciation of craft (dark, specialty, etc) chocolate is definitely rising. The bad news is that after 100+ years of buying cheap industrial chocolate, most Americans still dont value chocolate very much and simply dont believe it should ever be that expensive. Chocolate, as was the case with coffee until the second wave, is viewed as both inexpensive and common.

Changing that viewpoint and building a pool of customers who understand, accept and value the difference between craft and industrial chocolate is the key, and is directly analogous to the change in consumer viewpoints and buying habits that happened (and is still happening) in the specialty coffee industry. Only when a large enough pool of potential customers understand craft chocolate and are invested in it, will a $100 bar begin to be possible. In other words, the path to a $100 chocolate bar does not begin with the product. It begins with the customer.

The specialty coffee movement had thousands of coffee houses spread across the country with which to evangelize the masses. What does the craft chocolate movement have? That is the question we should be asking. In my view, its only when we have a suitable answer to that question that we can really even begin to start talking about $100 bars.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

I was thinking the chocolate equivalent of the classic 750ml wine bottle.So 100gr was what I was using as a benchmark.

What weight do you propose? Smaller quantities get a premium as packaging and labor take up a relatively higher percentage of the COGS.

The Oialla box is what - 10, 5gr squares? Personally, I think the ratio of packaging to product is way too high. I cringe when I think about it.

Domori is selling in 25gr bars of four squares. Their 100% Criollo is well under 10 for that quantity.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Well, I should have looked closer. Caputo's also still has listed a 50g box of Oialla for $30. Thus, per gram, it would be even more expensive than the 100g box since it is $60 for 100 g, and proves my point of the need for a standardized weight for this discussion.

updated by @ChocoFiles: 09/07/15 21:08:40

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

A couple of points:

1) For this discussion there needs to be a standard weight for the bar. I suggest 100 grams. Obviously, a 50 g bar for $100 is much more expensive per gram than a 500 g bar at the same cost. Or perhaps more realistically, you get twice as much chocolate for a 100 g bar than you do for a 50 g bar. For sake of argument, and just to be consistent, can we just say we're talking about a 100 g bar?

2) The most expensive 100 g of chocolate that I've seen so far is $50 for 100 g of Oialla at Caputo's Market . It's still listed, but no longer for sale. Oialla might be a bar worth discussing because it is way overpriced and the chocolate is not very memorable. I'm guessing that in this case paying a PR firm for marketing andindividuallywrapping each 5g piece are at least 2 factors that drove up the price. Apparently Caputo's also agreed that there is better chocolate for a lower price. They said, " Be sure to check out the "Beni Bar" from Original Beans. It is made with the same beans from the same area and is a fraction of the price. While it is not in super fancy packaging like Oialla, we feel the chocolate is tastier. "

3) I guess that the question of this thread presupposes $100 bar that is actually worth the price.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

i have followed some of this discussion and you all make valid points on this discussion. I can talk only from an Australian point of view. My family has been in wine starting with vineyards in the Barossa Valley around 1830, though i grewup in wine and worked in the industry for many years my main work is speciality tea and chocolate .

Wine got to where it is by evolving over hundreds of years by making the public more knowledgeable about wine. Every major media has columns devoted to this topic every week. Craft beer is following the same path.

The type of discussion you are having is happening in speciality tea as well, many of Clay's opening comments and thoughts have appeared in speciality teas pages.

Cafes are my industry and i've watched the rise and rise of coffee, again in Australia its evolved naturally, not by some grand master plan. Sure COE coffees can fetch hundreds of dollars per kilo but could be awhile before your local cafe has $50 cups of coffee . Here most speciality cafes offer origin coffee as an option to the main blend, at an extra cost of $1-2/cup, this is for coffee beans which cost double the house blend = breakeven at best. real price should be $10 based on standard 18g double shot ristretto.

If your going to aim for a $100 bar (a rising tide lifts all boats) it'll be through media, public awareness, tastings. If you look at wine its tastings tastings tastings- from corner bottle shop, wine cellar, restaurant hosting dinners, lets not forget wine clubs,

Wine prices are also influenced by collectors, i was only reading tonight that the stocks of very old wines 1900-1940 have all but disappeared, so stocks of 50-80's are more valuable.

Anyone got a 1952 Cruizel or Pralus chocolate ???

origin chocolate is the start lets just get out there and let people taste it the rest will follow

The big thing chocolate has (tea hasn't) is that emotional connection just like wine & coffee

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

It might be useful in this pursuit to have a some well presented place(s) on the Internet where consumers can learn about the chocolate world in ways that they understand the wine world. I'm not sure what the best one is today. Perhaps it could be a joint effort of this group, but it needs to be a consistent format.

- Detailed history and style of chocolate makers, bios, videos and interviews

- Detailed information about chocolate appellations (a world map would be good). I think single origin is the only way to get the prices up.

Again, the idea being to allow customers to begin to go deeper in a way that enables them to build preferences, for which they may pay more.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Michael -

Many times over the past few years I've floated the idea that any market that is large enough to support a craft brewery is large enough to support a craft chocolate maker. So, I agree with you about many of your points.

Was Starbucks necessary? Maybe. I do think they accelerated the development of the specialty coffee market. In the town where I live Starbucks moved right across the street from the local coffee shop, which also roasts. People predicted the decline of the local shop but I am happy to say that it has thrived and consistently produces a better cup - at a lower price.

Nonetheless, Starbucks helped fuel the differentiation of coffee and drive the prices up. You're right, 20 years ago most people would not pay $3 for a cup of coffee outside of an upscale restaurant or hotel. Now it's accepted. Starbucks was able to effect this change, relatively quickly (and this is after Howard Schultz stepped in), by recognizing they weren't selling coffee, customers were buying being associated with a lifestyle choice that went far beyond "regular, light, dark, and black." Half-caf, skinny ... the endless personalization of the drink helped fuel what had, up to then, been undifferentiated.

In part, the specialty coffee market has grown as a reaction to corporate coffee. There are big companies (and smaller ones) who have tried to do something similar in chocolate, but those efforts have failed ... so far. Not that it can't be done, just that no-one has hit upon the winning formula, yet.

I do think that the immediacy and personalization available in coffee (and that accounts for Coldstone Creamery's longevity) doesn't really have an equivalent in the chocolate market. That's not strictly true I realize as I write it. There are some on-line retailers that do customized chocolate bars and I know you can go into the Ritter Museum in Germany and order customized bars and wait for them.

I look forward to learning more about your project and following its progress. I don't think it's the nature of the beast, just that it's going to take someone to challenge the existing models in ways that have long-term appeal to consumers.And I don't think it will be one thing, it will be a confluence of things. The $100 bar is just one.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Gap -

A good observation and one that is being hinted at in other responses. For example, Starbucks costs as much as it does not because it's such good coffee (objectively, it's not), people are paying for the experience, buying into the brand's lifestyle. Most people don't know this, but the two ingredients that comprise most of what Starbucks consumes are water and milk. Actual coffee is #3.

That said, is the presentation of the chocolate curated and moderated? Is there someone with expertise who's making the selection, providing the information, and more? Or, are the tastings unguided?

:: Clay

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Clay:

I have been thinking about these types of questions for some time now. Here are my thoughts.

In regard to who is going to be the Starbucks of chocolate my answer is that I dont know, nor do I know if there even will be a Starbucks of chocolate. Personally I hope not. And also I dont think its necessary. Yes, Starbucks helped accelerate the rise of specialty coffee in this country. But all Starbucks did was speed up the process; it would have happened anyway. It was happening anyway. Remember, Starbucks was around for nearly 20 years before they really even started expanding.

Also, over time Starbucks did a lot of damage to the national perception of specialty coffee. Indeed, a large part of the motivation for the third wave of coffee was a reaction to Starbucks and its ilk. In this regard large corporations tend to be a double-edged sword. On the one hand they typically have the financial resources to market aggressively on a national level. That can be helpful for not only them for others in their industry. On the other hand large corporations nearly always concentrate far more on revenue streams, cost control and process than they do on craft and product quality.

When I suggest emulating the coffee industry model Im not talking about Starbucks, Im talking about the thousands of independent cafs that formed in cities across the country. Many if not most of these coffee houses started small and just figured out how to do it. And they served a regional customer base, not a national one.

After a while people in nearly any decent-sized city could suddenly go to a local caf and get coffee products that were far superior to anything they had experienced. And because this was happening all over the country, it became part of the national conversation. Consumer expectations rose, along with their perception of the product and their willingness to pay substantially more for that product. It was a ground-up, grass roots kind of thing. Not a top-down, big corporate Starbucks thing. Starbucks deserves some credit, to be sure. But having been there, I think they get more credit than they actually deserve for building the industry, and less blame than they deserve for damaging it.

Anyway, would this be difficult to do with chocolate? Perhaps. But if you had told any random person in the 1960s that someday there would be thousands of cafs across the country that concentrated only on coffee and espresso drinks, and where the average cost for one of those coffee drinks was $3-$4, they would have told you that you were crazy. And then 20 years later it was true.

Now you point out, and rightly so, that the immediacy and variety available in the modern coffee house has no current equivalent in the chocolate industry. But your observation appears to carry with it the suggestion that this is simply the nature of the beast. I dont think this is the case, and quite frankly Im soon going to be putting that to the test with an upcoming project! Not only do I think this it is entirely possible, I absolutely think that this is the best way forward.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

I think a few people have touched on this in various ways, but an important part of the whole wine/chocolate thing is: a bottle of wine is (usually) to be shared whereas a bar of chocolate is (usually) for an individual.

Maybe a bar is not the best vehicle for delivering 75-100g of $100 chocolate? Maybe tasting squares that can be eaten like a cheese platter would be a better format to share the chocolate? Extending the cheese platter analogy, you could have various origins for different tastes. Just throwing it out there . . .

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Cool. My first experience with high end beans was getting some nibs from Amano. I went straight from the Cuisinart to the Santha, added some vanilla and it was incredibly fruity and great all around. thanks for the link, I'll check them out.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Lane:

There's a new boutique bean broker in Portland, Meridian Cacao. They don't have any Porcelana (now), but if I recall correctly they are waiting to receive a container of Gran Couva from Trinidad ... and they are going to be selling in small quantities, e.g., 10-20lb minimums.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

If we look at this from the demand side, let's think about who is going to pay for a $100 bar and why? Although people for whom the difference between $10 and $100 doesn't matter may be a major part of this market and enough to sustain smaller makers, let's think about how to create that value for people for whom it represents a real buying decision (perhaps defined as needing to work more than 2 hours to afford this $100/100gram pinnacle of chocolate).

Starting with some differences between wine and chocolate. Wine has vintages which are influenced by weather and which receive ratings and reviews. I don't think many people really appreciate the difference, but they are told to by the experts so they do. Is cacao as sensitive to yearly weather variations (I don't know)?.

Wine is a social experience. While it's fun to have a chocolate tasting, I've never heard of a group of people ordering a chocolate bar at a restaurant or a bar; a chocolate menu would be cool! Wine is defined by the appellation, vineyard, and winemaker. I'm a chocolate nut and couldn't tell you the name of a single farmer, although I've seen blogs about lots of them. In wine, people pay for cachet, that's hard to do without extremely fine segmentation (think about number of wines vs. number of chocolates). I collect boxes so I could say with some confidence that I've tried about 300 different bars. I suspect there are another 300 out there if we really got into each bean for the top 20 producers. I suspect that number is at least 5000 for wines.A bottle of wine also provides a good serving for 6 people. I'm not sure 1/6 of a chocolate bar is going to cut it, although the 40g packaging might help here. I think the biggest thing is that people drink wine because it's an expected part of the dinner ritual. There's no social event that calls for chocolate (except perhaps coming over to my house)

I think you'd obviously need to expand the number of people who appreciate fine chocolate. If you don't appreciate the difference among Amano/Mast/Amedei/Cluizel/Valrhona/Pralus and the variations within their offerings then you aren't going to chase something "special". Developing a memory of what Chuao tastes like, describing that in words, and then talking about the difference between what Cecilia, Art, Pierre, and Francois do with it takes a lot of experience. Oh, we need to invent chocolate name dropping too! I recently tried the Marcolini and Amedei bars back to back and Chuao "clicked" for me. I always enjoyed it but now I can recognize it. I now have amassed 6 different Chuaos for an upcoming chocolate making party. Perhaps we should encourage that sort of tasting to enhance the focus on the origins, which can drive preferences, which can drive demand.

Another challenge is the taste bud issue. As the world converges towards an American diet, we're losing the ability to distinguish anything other than salt, sugar, fat, texture, and temperature. This may be less among the upper class we're aiming for, but it's still a problem.

Unlike wine and Scotch and caviar, chocolate is something you can make by yourself with pretty good results. I think having a friend who makes chocolate is a great way to get people into the game. I just started and for a $1000 investment and a bit of web surfing (thx Alchemy John) in equipment you can get some good results very quickly. Now if I could just find out how to get my hands on 20lb of Porcelana...

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Thomas:

The commodities market price for (robusta) coffee right now is about $1.05/lb, or about $2350/MT. The price for commodity cocoa is about $2470, for comparison purposes.

These markets are called the "formal markets," which means the transactions are recorded and the prices are known. Thus it's possible for a buyer to pick up a phone to a seller and purchase cocoa according to standard terms and conditions, and according to established grading standards using standardized contract terms.

Coffee and cocoa are also traded on what is called the "informal market," where transactions are not recorded and each sale is negotiated on a personal basis. One kind of informal market is Direct Trade, where the buyer buys directly from the grower. Prices are negotiated in private and may vary from contract to contract which may embody non-standard (with respect to industry norms) terms and conditions.

There are informal markets in coffee that are very public, and the best known of these are the ones associated with the Cup of Excellence Awards. While commodity coffee hovers between US$1 - $2/lb, prices paid for select lots at CoE auctions routinely fetch US$20+/lb. One lot of Guatemalan coffee fetched $80.20 - per pound - in 2008. You do have to calculate in the auctioneer's fees (typically 15%), but the prices paid at the CoE auctions are the gross amount paid to the farmer. A normal 60kg bag of robusta would fetch $138 on the commodity market. The farmer is probably only getting 70% of that. On the other hand, in the CoE, that 60kg bag would fetch over $5000 at $50/lb even after auction fees are deducted. If a farmer has seven bags of coffee that fetches even $20/lb, they are doing very well indeed.

But even those prices are nowhere near the upper limit on coffee prices: there are exotic coffees that retail for as much as $1300/lb, according to the article on Kopi Luwak coffee on Wikipedia.

I spoke with Stephane Bonnat in 2010 when I was last at the Salon du Chocolat, and he said he was paying farmers 6000/mt for some of his beans. That's about US$3.50/lb at today's exchange rate. If I recall correctly, there are cocoa beans that command higher prices, still. Earlier, I reported that the Mast Bros had indicated that they'd paid as much as US$20,000/ton ($10/lb) for beans. (It was not clear what this price referred to - the farm gate price or the delivered price, though the likelihood is that it was the delivered price and the farmers received considerably less.)

At $20,000/ton delivered, the cost of the cocoa in a 100gr, 80% bar is about $2.20. Assume manufacturing doubles that cost in one-ton quantities. Throw in $1/unit for packaging and you have a cost of goods (very naively) of about $5.40. A retail price of $30 for such a bar is not an unreasonable lower bound, assuming the bar is made to be eaten right away, and accounting for a three-tier (broker (15%), distributor (20%), retailer (100%)) distribution system where the chocolate maker enjoys a 50% gross margin.

Doubling the delivered price of cocoa (to $40,000/ton with the farmer getting at least 75% of that), doubling the cost of packaging to $2/unit, allowing $40k/ton for manufacturing, aging, and other processing , and setting the gross margin to the chocolate maker at 70% gets the retail price of the bar around the $100 price point - and there is now over $35 per bar available for marketing and other activities on a 100gr bar that costs over $10 each to manufacture. In other words, there's a lot of money in the system to pay for experts whose job it is to educate people about the merits of this $100 bar.

It would require a substantial change in mindset for this to happen, but if it did happen, the entire chocolate industry would benefit tremendously.

Still the questions remain, what are more of the characteristics that define this $100 bar? There have been some good suggestions already but I am sure we can come up with more.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

How might some of this high price chocolate relate to price growers would get for dry cacao beans. From what I learned last summer in the Dominican Republic, the basic earnings for fermented quality cacao is around US $.90 - $1.00/lb. The summer before it was more than .50lb. Certified organic and/or fair trade will take it up another .15-20lb. I was able to find two cases where up to US$2.00 was being paid for cacao which is harvested, fermented and dried exceptionally. I met a number of people who have nurseries and are growing a number of genetic varieties for different characteristics. The larger producers have been improving genetic quality on some farms for some time and some of the smaller producers have started to convert small parts of their farms to these new varieties.

Is it unreasonable to think a farmer could get US$3-5/lb for dry cacao from select genetics and everything else done to precision? What do people pay for the best Criollo coming out of Venezuela or Nacional out of Equador or Peru? I know what it costs me to buy beans or liquor from the DR in the US. How much would a $100 bar of chocolate relate to an increase in price for the cacao?

I know of three people who are making a farm to bar chocolate from the DR. SpagnVola, the Rizeks, and Diana Munne. It will be interesting to watch the quality and diversity of each improve and develop over time.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Clay;

You have very clearly touched on several aspects of my exact business model, identifying holes I found in the indusry 7 years ago when I first started researching it. There are many stigmas attached to the chocolate industry which have in the past and will continue to stifle growth as it applies to product quality.

BIG ONE: Romance. There is an aire of romance that women have associated with chocolate -an aire that has been played upon by large companies and chocolatiers alikefor years. Chocolate is a unique product in that it can be molded and shaped and made to look beautiful. Coffee can't. it comes in a cup. That's it. As a result, artisans have and always will continue to forget that we may buy once with our eyes, we'll certainly only buy subsequent times with our pallates! (A discussion in an earlier thread). People will continue to forego quality for beauty, and as a result willnullify the concept of a $100 chocolate bar. Now.... Having said that, a $100 or $200, or even $1500 chocolate sculpture is not out of the question, as it can easily be tied to the skill of the artisan. Again, we're back to the aesthetic beauty and time required to create it,not the taste.

Because of the image of chocolate being a woman's "treat", the chocolate industry loses money 9 months of the year, and almost 30% of it's revenue is centered around Valentine's Day, and Christmas, whereas millions of people "need" their coffee fix every morning, and often mid afternoon to pick them up.

Coffee is a daily thing. Chocolate is a "treat". In fact many consumers think of chocolate bars and think of things like Coffee Crisp, or Kit Kats, or other "candy bars", rather than thinking of just straight eating chocolate.

Don't forget that coffee also contains a drug/stimulant (caffiene), whereas chocolate doesn't have the same effect on people.

I'm not even going to bother jumping on the "beautiful packaging" soap box.....

Large companies have tried to address thebig spikes in consumption trendsby capitalizing on the "health benefits" of dark chocolate, in an attempt to make chocolate a daily part of our diet, rahter than the occasional seasonal "treat", but come on! Really?? How many people are going to buy into a "healthy" product that is on average 65% fat and sugar?? Duh....

I believe that when artisans start focusing on flavour and consumer preferences and less on aesthetics, only THEN will trends change. My business "Choklat" is an exact prototype of what I've mentioned here, and is hammering our competition without my presence, because our focus IS 100% on taste, is based on recipes that are tried tested and true, and utilizes skills that require only basic staff training and not the skill of a master chocolatier. Our focus IS the customer, and it is doing very very well.

Cheers.

Brad

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Michael:

You are not wrong in your pointing to coffee, not wine, as a potential model for chocolate to follow.

But (naturally) I think there's a lot of nuance and difference in the markets. I can appreciate the SCAA's work in growing the coffee market - which included increased respect for roasters and baristas - but the differences in production between coffee and chocolate do not (I think) translate into chocolate being able to take the same path. One reason is the immediacy of coffee. I can walk into a coffee shop with a roaster and talk to the people who roast the beans and pull the shots (might even be the same person). I can then endlessly customize the form of the delivery and consumption: method of brewing, cortado, macchiato, espresso, Americano, cappuccino, doppio, lungo, ristretto, type of milk, flavoring, size, foam or no foam or in-between foam.

While there are some new chocolate factories opening up in retail-friendly places that invite interaction between the roaster/barista/consumer, the level of meaningful customization in chocolate is just not there.

One question I do have for you is where you think the chocolate equivalent of Starbucks will come from. Starbucks (irrespective of what we think of their beverages) is in large part responsible for the growth of interest in coffee, moving it from a simple beverage purchase with very limited options to a lifestyle choice. They can take beans that retail for $9/lb (and cost less than $2) and when they sell it as a beverage can reap gross margins of thousands of percents. SO, the economics do work in that respect. The question for chocolate is where the marketing $$ is going to come from. It's not coming from Hershey/Nestl/Mars/Kraft - in the gourmet sector, though it could, I suppose. Mars likes to try to innovate in this respect, witness Ethel M and Pure Dark. But they are fundamentally a mass market consumer organization and face the same issues Hershey had in trying to create a credible gourmet brand image.

Another thing to consider is that the chocolate industry does not have a magazine of its own. Coffee has many. Why?

So - I don't think the business models directly translate but there are parallels that can be used for guidance.

And, I say again that a cocoa version of the Cup of Excellence would be a good idea. The organizers of the Salon du Chocolat have a Cocoa Excellence awards but it is missing, entirely, any idea of how a winner of one of the awards can monetize it. The same is true, I fear, of the FCIA's Heirloom Cacao Project. I was at the meeting in DC in the summer when they announced it, acknowledging that it was still in the early stages, but the lack of attention to recognizing any increase in economic value of a cacao deemed worthy of being designated heirloom was a glaring omission, in my opinion.

All this said, I think your points are an excellent starting point for continued discussion, and I look forward to it. A lot.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

Melanie:

You also need to start thinking about a PDO system. Coffee has Kona all sewn up and probably won't like the application to cacao. Place names are going to be very important to elevating awareness.

Many people know Chuao, and there are many names associated with cacao but they are used confusingly. Ocumare is a place? And a varietal? What about Rio Caribe? Can you get true criollos from Rio Caribe? Maralumi? Place or made up name?

Knowing what you have (and don't) and communicating it properly will be important in getting better prices.

Hawaii can lead the way on this; the community is small, the industry is still really nascent, and there are knowledgeable people. Getting the legislature to recognize the potential economic advantage (making the connection to Kona) could get them to act.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

Posted in: Opinion

It was tongue in cheek. however i suppose i could do bars based off of extra-ordinarily rare trees (most people don't have access to germplasm databases), or crossed with things like theobroma grandiflorum.

However, uniqueness of raw materials and skill/knowledge of the preparer aren't going to be sufficient to justify/sustain an elevated price. There will need to be something less directly product related to accompany it.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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who says the world of chocolate's not a cut-throat, competitive business? 8-)

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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That gave me a good chuckle Clay. You know I was just having fun too!

Cheers

Brad.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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My reply was a weak attempt at a bit of levity. Without tone of voice I'm not sure it came across that way.

There is a lesson that marketing often trumps quality, though.

Plus another lesson: wealthy yet uninformed people will sometimes buy something based on the assumption "it's expensive so it must be good". (I can think of at least one other chocolate maker that uses this strategy to sell LOTS of chocolate for higher prices than the quality justifies. [Still only in the $9/bar range, though.])

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Oh and by the way the parrallels I draw from the wine industry concern mainly the manufacture and flavour development steps not the marketing and promotion, chocolate is its own beast in that respect.

updated by @Tom: 09/16/15 05:21:42

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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I think coffee is an equally reasonable business model to follow, I have observed both closely as a guide in planning a business model, in fact I see a hybrid of the two being successful as chocolate is more versatile with a bigger potential consumer base than both wine and coffee. However I do think that a culture of appreciating fine chocolate that resembles that of wine would be replicated, in fact it already exists, the website www.seventypercent.com is just one clear example. In fact it would be one to really build and capitalise on because it is not age restricted. Don't forget that the connoisseurship of chocolate can be linked with that of wine through chocolate and wine pairing as some of the wineries around here are discovering is quite lucrative. Essentially you have a market segment that you can directly tap in the fashion that you are claiming chocolate cannot achieve.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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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.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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I agree the beginings are there. A lot can be borrowed from the wine industry in achieving this, the parallels in wine and chocolate producting were very apparent when i was a post doc at the universities wine research campus. What was also very apparent is how much behind the choclate industry is and how much opportunity there is. I have a lifetimes worth of experiments id like to work on.Perhaps this is why two Australian chocolate company founders came through the same institution as wine makers. Both Bahen and Co Chocolate Makers and Kennedy and Wilson were founded by wine makers. All be it Kennedy and Wilson start with liquor, they do some very nice blends and flavour combos.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Hawaii has the rarity , a diverse genetic pool, rich, volcanic soil and benefit of being the only US location to have a chocolate industry with the ability to grow its own material. Now what we need is some skilled bean to bar chocolate maker to come in and elevate that.
I totally agree that when you raise the top end, the bottom comes up in price and the mid range experiences stronger sales. I' saw this over and over in the my former career as a large jeweler, and continually tested and tweaked it. Marketing is one aspect. I Think the Heirloom Cacao Initiative is one of the means in the future to facilitate the reality of higher priced and appreciated bars, provided skilled hands are working with the beans.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Brad:

You ship now? To New York?

<big grin - sorry, couldn't resist, hope you don't mind the humor>

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Sebastian:

Fritz's truffle is expensive as it is - it's made to order, only - because of the ingredients, including gold leaf.

For the $100 bars you're offering to make, what characteristics of the bars make them worthy of the price tag, other than made to order in extremely limited availability?

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Tom:

This is along the lines of what I was hoping to elicit. What is interesting is that I see examples in places where this is starting to emerge. Take what Frank Homann is doing on the farm side at Xoco, for example, or what Gianluca Franzoni has been doing in a vertically integrated way from farm to factory ... his 100% Criollo bar is about as close as it comes today, IMO, and the price is extremely reasonable at about 5/25gr.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Lowe:

The Cocoa Gourmet instance is an example of where the ingredients (and presentation) being the major cost of the final product, not the chocolate itself, which is re-melted Felchlin. Gold and silver leaf, custom wood boxes ...

The point is to create a chocolate that doesn't need gilding to be seen as deserving the price paid.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Lowe:

A case of deceptive marketing practices that was ultimately unmasked. However, there is a kernel of truth in the fact that part of any consumer market can be swayed by marketing. The people perceived that the chocolate was worth the price they were paying based on the story (now known to be false being told about it.

Okay, we know that the market, or at least a part of it, will pay that amount of money for chocolate. Now we just have to create one that deserves that price point on its merits.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Perhaps rarity is the key, you could grow two or three trees in a green house in an odd place like New York or Vatican City and take it tree-to-bar making only a dozen to two dozen per harvest. Or shoot for twenty six bars.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Wine sommeliers are often hired by restaurants to curate their wine offerings and in many cases they are part of the wine service - their salaries are built in to the prices paid for the wines in those settings. There are some occasions where I have been approached to curate a chocolate selection for a restaurant but not one of them has ever resulted in actually getting hired to curate a selection, let alone create a program where a person was involved in service.

Turning the chocolate into confections is one way to raise the price charged for the chocolate, but that price increase is incidental to the other aspects of the confection's creation.

There are professional tasters in the chocolate industry but I don't see the small artisan makers employing them. Like wine makers, the chocolate makers make what they make and independent experts pass judgment that the market values and pays for.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Andy:

The wine makers who thrive in the $10-$100 price range benefit directly and indirectly from the $1000 bottles - even though they don't make bottles in the upper price range.

It's not necessary for a chocolate maker to make only super-premium priced products, just as it's not necessary for a wine maker to make only super-premium wines. However, in an evening where you're trying some $20-30 reds, a $100 Bordeaux is an interesting addition. Why not see chocolate that way?

The coffee analogy is interesting, and prices for brewed coffee vary widely and are not necessarily dependent on bean quality. Some of the worst coffee I have ever had has been some of the most expensive ... in hotel dining rooms. That said, I do see a cocoa equivalent of coffee's cup of excellence as a very good thing in its own right.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Sebastian;

I'll one-up you and offer a baker's dozen for the price of 12.

...and free shipping.

Haha!

Brad.

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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Fritz used to have a $250 truffle - it's been some time since we chatted, so i'm not sure if he still does or not.

I'll happily make a $100 bar, sold by the dozen. You choose the beans, blend, and concentration. Pls let me know when you'd like me to start shipping them 8-)

What the Chocolate Industry Needs is A $100 Bar of Chocolate

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I think that is a very interesting idea. As someone who may potentially buy one i would say history and reputation of a company would be important. A new market entry would find it difficult to produce and sell a $100 bar of chocolate. As for what characteristics a chocolate bar would have to have to be worth it, well approaching it from a makers (hobbyist) perspective who has delt with fermentation studies over several years from the same plantation i would say i would need the same control a wine maker does over each vintage. Ideally i would have a plantation with 3 to 4 varieties, i would have control over the growing ie pruning, watering, fertilising, harvest time etc. ideally monitoring parameters deemed important such as pH and sugar levels of the fruits. I would then want control of the fermentation, ie aging the fruit before ferment, time of ferment, possibly starter culture etc. then i would want control over the drying, shipping, roasting, blending, formulation......you get the picture. I would then require 10 years of experinece applying and tinkering with different ideas in all these areas and then i would feel comfortable in offering up a chocolate bar worthy of a $100 price tag. Oh and in that 10 years establish a good reputation and build brand equity to support the $100 price tag.