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Chocolate Consumers Deepen Their Understanding of the Product They Love

By Robin Mather

Once upon a time, the customer who had a taste for a little chocolate dropped into the nearest drug or grocery store and picked up a bar of milk chocolate.

Those days have vanished, however, as chocolate consumers have learned more and more about how their favorite treat is produced. Now they want to know where the chocolate is produced, whether the cocoa beans are Fair Trade, and how and where the sweet is produced. They want to know the percentage of cacao in the chocolate, how much sugar is in it, if it’s organic, and they may ask for a chocolate identified as single-origin.

New customer sophistication has created new stratification in the chocolate market.

Adam Smith for webJust ask Adam Smith, whose newsstand, Fog City News in San Francisco, California, carries more than 200 different brands of chocolate from around the world, and who runs a “frequent-buyer” program so customers can broaden their experience.
“I think it started with Scharffen Berger, back in 1996,” he says. “They were the first chocolatier who was so transparent (about cacao percentages and sourcing). Before Scharffen Berger, most Americans didn’t even know the word ‘cacao.’ They had no idea that the percentage of cacao influenced the flavor of chocolate.”

Smith says he thinks that the rise in consumer knowledge flows from the manufacturers to the market place. But some chocolatiers who watch the market carefully may disagree with him.

“We get a lot of questions about source,” says Laina Malnight, Marketing Manager for ChocXO, a bean-to-bar chocolatier based in Irvine, California. “Consumers want a story, and the more certifications, the better.”

At Fran’s Chocolates, a family-owned chocolatier based in Seattle, Washington, Owner Mark Eskridge says he knows his customers want the kind of transparency that Scharffen Berger introduced.

“People are reading the labels,” he says. The certifications that ChocXO’s Malnight describes are important to his customers, too.

“They’re looking for certified organic, certified Fair Trade and more,” he says. But those certifications can raise issues for manufacturers. “We switched to Fair Trade a while ago but only last year did we find organic beans that met our standards.”
Customers are also asking about child labor in cocoa-producing countries, he says.

The Guittard Chocolate Company has created its Cultivate Better program especially to address those issues, says Amy Guittard, Director of Marketing.

“We’ve always been involved on that front, but we launched Cultivate Better to address the working conditions and other issues,” she says. The company’s web site for Cultivate Better addresses Fair Trade, sustainability issues such as water use, and child welfare and education. The web site explains that its mission relies on “a heritage built on close relationships with farmers and suppliers” and promises “a commitment to protect the flavor of chocolate” as growers work with plant breeders and scientists to develop more pest-resistant cocoa trees.

Guittard and its customers benefit from that mission in very practical ways. “It ensures that our ingredients, and the way they are grown, are always improving,” she says. The company’s customers appreciate that transparency, she says.

A Resource Explosion

The Specialty Food Association listed chocolate as the sixth fastest growing segment of specialty food in its 2017 report. The chocolate segment showed 10 percent growth from 2014 to 2016. The segment posted sales of more than $22 billion in 2017, according to Statista, a data tracking company.

It’s a big market with big rewards for smart retailers.

Fog City bars for webFog City News’ Smith credits the Internet for more informed consumers and for inspiring start-up chocolatiers. “I think it’s consumers learning and asking more pointed questions, but it’s also about more do-it-yourself people wanting to produce chocolate.”

Smith notes that “what we have here is the craft beer movement going on in chocolate. Now you have online forums and online suppliers, so there’s more interest in chocolate, and there are more resources for those who want to start up.”

He wonders if industry giants will pay attention. “It’s going to be interesting if the chocolate companies like Nestle and Hershey will make the same mistake that the big breweries made — they thought the craft beer movement was a fad.”

Whether the recent stratification has been pushed up from consumers to makers, or the industry has educated its consumers is, in the end, immaterial.

Retailers need to focus on something else, Smith says.

Fog City storefront for web“What most stores selling chocolates don’t do,” he says, “is they don’t train their staff” to talk knowledgeably about the chocolates they carry. That means the retailers aren’t educating their customers.”

Given how much chocolate Fog City sells in a year — “upwards of $300 thousand, with no e-commerce sales,” he says — Smith makes training new employees a high priority. “When you’re hired by Fog City News, it’s like you’re going to Chocolate University,” he says.

Dallas Gourmet Gold Specialty Food Awards Call for Entries

Dallas Market Center is calling for entries for the nineth annual Dallas Gourmet Gold Specialty Food Awards to be held at Dallas Market Center during the Total Housewares and Gourmet Market, June 20-26. This year also marks the 30th anniversary of Dallas Market Center’s Gourmet Market, in addition to milestone anniversaries of many of its exhibitors.

The Gourmet Gold Specialty Food Awards celebrates exceptional manufacturers in the gourmet products industry exhibiting at Dallas Market Center. With more than 1,000 product lines of gourmet food and accessories featured in the Gourmet Market in the World Trade Center, gourmet maintains a strong presence at Dallas Market Center as resources in the category continue to expand.

June 2018 Gourmet Gold Specialty Foods Awards categories are:

• Best Baked – cookies, cake, breads, mixes
• Best Beverage – hot or cold
• Best Condiment I – sauces, rubs, seasonings
• Best Condiment II – oils, vinegars, dressings
• Fruit Confit – jams, jellies, preserves, marmalades
• Best Soup/Chili
• Best Chocolate Candy/Dessert
• Best Non-Chocolate Candy/Dessert
• Best Snack – dips, salsas, nuts
• Best Healthy Lifestyle – organic, gluten free, sugar free

Food entries are judged based on taste, originality, and packaging. Participation is limited to current Gourmet Market exhibitors or temporary exhibitors for the June market. Participants may enter in up to two categories; entry fee is $50 per entry or two for $75. Click here to enter before the deadline of Friday, May 21, 2018.

Judging will take place Thursday, June 21 and winners will be revealed during an awards ceremony and cocktail reception on Friday, June 22, in the World Trade Center Atrium at 6 p.m.

For three decades, Gourmet Market at Dallas Market Center has been the buyers’ resource for “everything gourmet.” Featuring more than 1,000 product lines from specialty food and beverages, kitchen and wine accessories, housewares, casual tabletop, and gifts for all occasions. It is the only permanent showroom in the gourmet industry open daily between markets with full time staff on site.

The 30th Anniversary of Gourmet Market brings with it many milestone anniversaries for its exhibitors as well. The following exhibitors will be honored during the Gourmet Gold Specialty Food Awards during June Total Housewares and Gourmet Market:

  • Carmie’s Kitchen, 1988
  • Lammes Candies, 1988
  • Redstone Foods, 1988
  • Sweet Shop USA, 1988
  • Claudia B Chocolates, 1996
  • Indianola Pecan House, 1997
  • Lois Roush, 1997
  • Pelican Bay, 1997
  • New Canaan Farms, 1998
  • Great San Saba River Pecans, 1999
  • Neighbors Coffee, 1999
  • Quintessential Chocolates, 2000
  • Holiday Tins & Containers, 2001
  • Prairie Thyme, 2001
  • Coffee City, 2002

For more information visit Gourmet Gold Awards. For a complete list of events, visit the Dallas Market Center website.

Organic Trade Association Wheels in Artillery for Court Battle on Animal Welfare Standards

The Organic Trade Association this week ratcheted up its court battle against the U.S. Department of Agriculture over the agency’s failure to put into effect new organic livestock standards, with two of America’s most influential animal welfare groups joining the association in its ongoing legal fight to uphold the integrity of organic standards.

In a new filing that revised the original complaint against USDA to reflect the department’s move to withdraw the rule, the Organic Trade Association was joined by the American Society for the Prevention of Cruelty to Animals (ASPCA) and the Animal Welfare Institute (AWI) as co-plaintiffs in the suit.

USDA on March 13 announced its intention to withdraw the final regulation on May 13, contending that the Organic Foods Production Act (OFPA) gives the National Organic Program the authority to regulate only veterinary medications, not animal care, welfare or production standards. The Organic Trade Association’s amended complaint — filed on Wednesday in the U.S. District Court for the District of Columbia — argues that this new claim by USDA is a “novel and erroneous” view of OFPA that “conflicts with every prior administration’s approach to rulemaking under the OFPA and the National Organic Standards Board.”

“We welcome the critical support of our friends in the animal welfare community in standing up against the Administration’s attack on this important organic standard,” said Laura Batcha, CEO and Executive Director of the Organic Trade Association. “In USDA’s attempt to kill this fully vetted final regulation, they’ve taken a radical departure from conclusions reached over more than 20 years of rulemakings regarding organic livestock care, and have assumed an aberrant view that has no historical basis or legal justification.”

The American Society for the Prevention of Cruelty to Animals is North America’s oldest humane organization with roughly 2.7 million supporters nationwide. The Animal Welfare Institute is a non-profit charitable organization dedicated to reducing animal suffering caused by people, and has sought to improve the welfare of farm animals since the early 1950s.

The Organic Trade Association is also challenging USDA’s assertion that it does not have to consult with the National Organic Standards Board (NOSB) — the advisory board to the National Organic Program established by OFPA – before withdrawing the regulation.

“The organic standard-making process established by Congress requires consultation with the National Organic Standards Board to make or amend existing organic standards,” said Batcha. “The day the Organic Livestock and Poultry Practices final regulation was published, it became the regulation of the National Organic Program. Withdrawal of this regulation requires NOSB’s consultation and review.”

The Organic Trade Association said that USDA continues to flagrantly disregard and refuse to consider the overwhelming support from the public for the organic animal welfare rule.

“USDA knows the public overwhelmingly supports the implementation of the Organic Livestock and Poultry Practices (OLPP) regulation. Indeed, in its announcement to withdraw the rule, USDA noted that out of the 72,000 comments it received, over 63,000 opposed the withdrawal of the final rule, and that only 50 supported its withdrawal,” said Batcha. “But despite the clear evidence of the public sentiment, USDA is acting against the will of the public, and the will of the organic sector.”

The Organic Livestock and Poultry Practices final rule was published on Jan. 19, 2017, after more than a decade of extensive public input and a thorough vetting process. Before the final withdrawal, the government had attempted six times – either through the rulemaking process or through court filings — to delay the implementation of the rule.

The regulation addresses four broad areas of organic livestock and poultry practices: living conditions, animal healthcare, transport, and slaughter. Most importantly, it stops the use of “porches” from being allowed in organic poultry production and requires producers to give their poultry access to the outdoors.

The Organic Trade Association filed its lawsuit against USDA last September over the department’s delays in the implementation of the OLPP regulation. The lawsuit argues that USDA violated the Organic Foods Production Act by failing to consult with NOSB on the rollback of the final organic standard, and unlawfully delayed the effective date of the final livestock standards developed by industry and in accordance with the established rulemaking processes. The suit also argues that USDA issued its repeated delays without the required public process, and that USDA ignored the overwhelming public record established in support of these organic standards. Those arguments still stand.

Since the filing of the lawsuit, support for the legal action against USDA has grown. A host of organic stakeholders representing thousands of organic farming families, organic certifiers and organic policymakers – along with leading retail brands and groups speaking out for millions of consumers — have supported the suit as declarants harmed by the USDA action. The declarants include:

  • George Siemon, CEO of Organic Valley/CROPP Cooperative;
  • Gina Asoudegan, Vice President of Mission and Innovation Strategy for Applegate;
  • Jesse Laflamme, co-founder of Pete & Gerry’s Eggs;
  • Robynn Schrader, CEO of National Co+op Grocers;
  • Kyla Smith, Chair of Directors for the Accredited Certifiers Association (ACA);
  • Tom Chapman, Chairman of the National Organic Standards Board and Director of Ingredient Sourcing at Clif Bar & Company.

In addition to the lawsuit’s co-plaintiffs, the Humane Society of the United States (HSUS) filed a separate lawsuit on Jan. 12 against USDA for withdrawing the Organic Livestock and Poultry Practices regulation. HSUS is the largest animal protection group in the country with some 10 million members.

“Support for our lawsuit is rapidly growing,” said Batcha. “Being organic is a choice, and all of our organic stakeholders – from farmers to retailers – work hard every day to voluntarily abide by organic standards. They want clear consistent standards. Consumers want clear consistent organic standards. We call upon the government to act responsibly as the steward of our federal organic program. That is what the organic community wants, what consumers expect and what the law mandates.”

View the complete amended complaint from the Organic Trade Association.

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