Chocolatiers jump onto gourmet bandwagon

Allison Linn Senior writer • Profile • E-mail

This Easter, don’t be surprised if even the kids aren’t satisfied by those waxy milk chocolate eggs that have long been the mainstay of Easter egg hunts.

These days, more Americans are snubbing typical childhood favorites in favor of premium chocolates that carry pedigrees such as a high cacao content, a lack of preservatives and, in some cases, even a specific country of origin.

Simply wrapping that chocolate around a nut or caramel won't always cut it, either. Exotic bonbons and truffles now boast ingredients like olive oil, fig, chili pepper and even wasabe.

Such chocolates can in some cases fetch more than $50 per pound,  but the price tag doesn't seem to be slowing sales.

Research firm Mintel estimates that the market for premium chocolate — or chocolate that costs more than $8 per pound — is increasing by about 14 percent per year. In 2006, research analyst Marcia Mogelonsky said, Americans spent about $2.05 billion on such high-end chocolate, up from $1.79 billion in the previous year.

That’s still a small slice of the overall U.S. chocolate market, which Mogelonsky estimated to be about $15.7 billion in 2005, up just 3 percent from $15.2 billion in 2004. (She doesn’t yet have 2006 figures available.) Still, as the fastest-growing segment of the market, the gourmet trend is spawning a number of small start-ups and drawing the attention of big chocolate companies.

Hershey Co. has bought up three small gourmet chocolate makers since 2005: Scharffen Berger Chocolate Maker, Joseph Schmidt Confections and Dagoba Organic Chocolate. Hershey also launched its own premium line.

Cadbury Schweppes plc, the British confection and soda giant which recently announced plans to split up its businesses, also now owns chocolate maker Green & Black’s.

Chocolate artisans say they welcome the increased attention to chocolate, which has helped many get — and stay — in the business over the past few years.

Chuck Siegel, president of Charles Chocolates in Emeryville, Calif., first entered the high-end chocolate business in 1987, when gourmet items were primarily sold through fancy food catalogs such as Williams-Sonoma. Now, Charles Chocolates — which he started in 2004 — sells its products at Whole Foods and other more general retailers.

“One of the big differences is now (people are) actually looking for premium chocolates,” he said. “It’s not really an issue of having to convince them.”

Siegel says the 25-person company is profitable, but he won’t provide specifics.

Many compare the increasing popularity of gourmet chocolate to the way Americans' taste in coffee has evolved over the years.

“It’s sort of the difference between drinking what we all used to drink — good old American coffee — and then discovering French roast,” Mogelonsky said.

The push is being driven in part by a surge of information about the potential health benefits of cacao. Researchers say the core ingredient in chocolate includes flavanols, which have properties that could help mitigate risk factors related to cardiovascular disease, and perhaps provide other healthful properties. That's one reason more people are looking for chocolates with a higher percentage of cacao, and companies are marketing the cacao content.

Noah Houghton, president of Dallas-based Noka Chocolate, said the health research has been a boon to his business, which started in 2004 and sells pricey chocolate pieces made with very simple ingredients.

Houghton said his chocolates, which can sell for hundreds of dollars a pound, also are popular with corporate gift givers because they are upscale and gender-neutral. He said the company is profitable but wouldn’t provide specifics.

Still, some are wary of promoting the health benefits of eating chocolate.

Siegel notes that while pure cacao might provide some heart benefits, adding buttercream and other decadent, high-fat ingredients can quickly negate that.

Michael Antonorsi, chocolatier with the southern California boutique chocolate maker Chuao Chocolatier, prefers to tout other benefits.

“It’s healthy through the happy fact of having a great, enjoyable moment,” he said.

But, he added, “If you want to have flavanols and antioxidants, you should eat raw cacao beans.”

Industry watchers say gourmet chocolate also is getting more popular because of what chocolate industry analyst Joan Steuer calls “self-gifting” — the idea that it’s OK to give yourself a little treat every once in a while, or even every day.

She credits coffee drink giant Starbucks Corp. with popularizing the idea of regularly spending $3 or $5 to indulge yourself.

“Everybody wants the best that I can afford,” said Steuer, who runs Chocolate Marketing LLC. “We want our fine chocolate every day, and we want it for ourselves.”

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