Chocolate is serious business.
Only in the US, the confectionery industry is worth $34.5 billion and chocolate accounts for $21.1 billion, roughly 60% of the industry. Worldwide the chocolate industry is estimated to be worth more than an incredible $100 billion.
The major players in the global chocolate market are multimillionaire manufacturers that sell mass-produced chocolate.
On the other side of the spectrum, in recent years we witnessed a growing appreciation of what is so called Fine Chocolate.
Defined as a mix between high-quality ingredients, technical expertise and low scalability, fine chocolate attracts consumers that care for transparency and exclusivity. The number of fine chocolate aficionados seems to increase every year, and so the companies that decide to start making exceptional chocolate.
But between a $1 bar full of cheap cacao butter and a limited edition made with wild cacao from the Amazonas, there is a group of companies that are not clearly positioned on the market.
Their chocolate is not expensive, but not even of exceptional quality. Many consumers can afford it, but fine chocolate lovers will probably stay away. It saves money compared to fine chocolate, but doesn’t give great satisfaction in return. Basically, they sell what we could define as MEDIOCRE CHOCOLATE.
In a marketplace where consumers see chocolate as either a quick fix only worth $1 or a serious pleasure for which they are willing to spend the money of a dinner out, where does mediocre chocolate stand?
Unfortunately, not in a good place.
The problem with mediocre chocolate is that it doesn’t completely satisfy any need or desire for consumers.
Whenever consumers decide to make a purchase, they look forward to satisfying either one of these two needs: saving money or getting quality. Our biggest satisfaction when we go shopping comes from either purchasing an item at a very low price for its category (saving money), or purchasing an expensive product of proven credibility that will most likely not disappoint our expectations (getting quality).
How much satisfaction do we get instead when we don’t completely save money and we don’t completely get quality?
Mediocre chocolate is like that. Consumers don’t get the lowest price or the best chocolate. They get “some sort of decent chocolate” that didn’t cost that much.
Since they are not offering any strong reason for consumers to choose their products, it’s way more difficult for this kind of companies to market themselves and survive in such a saturated industry. In fact, what they are missing in comparison to the other companies is a COMPETITIVE ADVANTAGE.
Competitive advantage is what a company can rely on to generate greater sales or retain more customers than its competition. For instance, big manufacturers like Hershey and Mars can rely on an incredible scalability that keeps costs of production very low, therefore retaining those customers that care about price. Fine chocolate makers like Amano and Domori can rely on offering chocolate made with exceptional cacao, therefore retaining customers that care about quality.
In an era where consumers are increasingly attentive to either their wallet or their crave for exclusivity, mediocre chocolate doesn’t have the power to retain anybody.
These companies can’t win the price battle with multimillionaire manufacturers because they can’t reach the same low costs of production, and can’t win the quality battle with fine chocolate makers because they don’t make exceptional chocolate that appeals to consumers that want the best product on the market.
So what is their future in the long run?
The only things that will allow mediocre chocolate to still be on the market 10 years from now are great storytelling and smart marketing.
An appealing narrative of the story of the company could find the sympathy of a specific segment of the market. A consistent communication with customers via Social Media could create an exceptional online presence. A professionally designed packaging could give a boost to sales.
Truth is that consumers are becoming better every day at recognizing the real quality of the food they eat. Marketing strategies might not be able to make it up for missing quality in the long run. At the same time, consumers’ palates are becoming finer, and it won’t be long before even the biggest Hershey fan will start longing for craft chocolate made with fine cacao from Venezuela.
So the best bet for companies that make mediocre chocolate is to STEP UP THEIR GAME, learn the necessary skills to make great chocolate and enjoy the benefits of a stronger position on the market.
Do YOU believe that mediocre chocolate will disappear in 10 years?
I did NOT get paid and did NOT receive any kind of favor for writing this article. These are my honest opinions at your service.