SPECIAL INTEREST GROUPS and federal agencies are pushing harder against the rising rates of obesity with calls for more nutritious foods and restrictions on advertising to kids. At the same time, some candy makers are investing in the development and introduction of treats that first and foremost taste good while delivering a number of inherent health benefits and improved nutritional profiles.
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While suppliers say North American manufacturers are still well behind the pace being set in the European and Asian markets, recent developments indicate that situation might soon change.
'There is no question about it,' says Dr. Ram Chaudhari, senior executive vice-president for R & D and co-founder of Fortitech, Inc., a supplier of nutritional premixes to the food industry. 'It is a dynamic and very promising future for candy and confectionery products in general. The time is right and people are moving on these things in many places.'
Marlene Machut, director of health and nutrition communications for Masterfoods N.A., a division of Mars, Inc., tells CandyBUSINESS: 'The healthier segment is developing right now, and it is an important market for people to pay attention to because it is what consumers are telling us they want. They are much smarter now than they have ever been, in terms of reading and being interested in nutrition. That is what we had in mind when we established our new Health and Nutrition division.'
Given the early stages of the market's development, hard numbers are difficult to come by. But Ray Jones, managing director of the research firm Dechert-Hampe, Inc., recently told an audience at the All Candy Expo that functional items occupy just two percent of today's retail shelves. As to the future, Dr. Hans Vriens, chief innovation officer at Barry Callebaut AG, estimates that functional products could comprise as much as 20 percent of space within the next 10 to 20 years.
The notion that consumers are ready to embrace such items is also supported by the National Confectioners Assoc. In its November 2005 overview of the U.S. market, three of the top four consumer trends hinge on growing public interest in functional/fortified, better-for-you and organic items, particularly in chocolate. Interestingly, only the move toward convenience and portability outrank nutritional trends.
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Confirming that the outlook for growth is 'significant,' Timothy Donovan, managing director of ChocoMed, Inc., a subsidiary of House of Brussels Chocolates, Inc., says: 'The worldwide market for functional confectionery products is just about to break wide open. Research indicates that functional food products will grow at rates of 10 to 12 percent per annum for the next decade.'
FLAVANOLS GRAB THE LIMELIGHT
Chocolate makers in particular are enjoying the benefits of the spike in consumer interest in dark chocolate, driven in part by research indicating that the naturally occurring polyphenols in cocoa and some finished dark chocolate products have the potential to deliver a wide range of health benefits.
As a result of this and a number of other factors, the overall chocolate sector turned in category leading sales increases that reached nearly 30 percent last year.
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As The Hershey Co.'s Tom Hernquist, senior vice-president, global growth officer, pointed out during the Chocolate Manufacturer Assoc..'s Chocolate Symposium in April: 'The trends are coming together--an aging population, increased affluence and health concerns all favor dark chocolate.'
Three years ago, Hernquist says about 10 percent of all U.S. households purchased dark. 'Now that's 20 percent, and this quarter's take-away is up 50 percent,' he says of Hershey's first quarter evidence.
The company is capitalizing on that with the coming introduction of its new Cacao Reserve line consisting of a range of 3.5-ounce dark chocolate and single-origin bars, dark and milk chocolate truffles packing in tins, as well as a line of drinking chocolates. According to Andrea Thomas, vice-president, global chocolate, the line's labels will incorporate the company's antioxidant seal, which identifies items containing higher levels of flavanol antioxidants. The seal is also being applied to Special Dark and Extra Dark items.
She tells CandyBUSINESS the first items in the line will appear in September, including 'two dark bars that are 65 percent cacao, some milk chocolate bars that are 35 percent cacao, and two varieties of drinking chocolate.' In December the bar line will be extended to include 1.3-ounce versions.
Four single-origin bars will also debut with the seal in December. Although Thomas cautions the final formulations are still under development and subject to change, she explains: 'The highest cacao content is 72 percent, and there is a 65 percent, a 50 and a 32 percent milk. The 32 milk is from Java Indonesia, the 72 is Sao Thome, and we'll have a 50 percent Ariba and a Santo Domingo at 65 percent. All of those are pure chocolate bars, and the dark items will carry the seal.'
But as consumers take hold of the idea that flavanol antioxidants could help lower blood pressure, improve heart and vascular function and perhaps even lower blood cholesterol, spur mental functioning and improve their skin, experts are quick to point out that simple label declarations of high cocoa content do not always equate to higher levels of beneficial compounds in the finished product.
According to Masterfood's Machut: 'It's becoming a rule of thumb that when you have a higher level of cocoa you have a higher level of flavanols, but that is not an automatic thing.' Flavanol content, she says, depends on bean selection and ripeness, how long they are fermented, as well as their drying time and temperature and how they are processed.
Experts agree that in order to maintain flavanol content, care must be taken throughout the beans' post-harvest handling and processing. While natural flavanol levels vary somewhat depending on the beans' origins, heat is the enemy, and too much at any post-harvest stage can degrade, destroy or reduce the amount of flavanols contained in finished products.
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Dan Azzura, vice-president, quality and innovation at Hershey tells CandyBUSINESS: 'The fermenting of the beans reduces flavanols in the product, so the way to look at it is the more fermentation that occurs, the lower the flavanol content. Roasting can also have an impact, again reducing the flavanols. After that, the flavanols are stable, unless you Dutch the cocoa, which also reduces flavanols in the product. Fermentation, heat and Dutching are the three factors that impact the flavanol content the most.'
Machut says: 'The shorthand way to say it is 'gentle processing'--so a shorter time, lower temperature type of processing is better for retaining flavanols.'
To date, only Barry Callebaut AG is known to be marketing industrial chocolate containing guaranteed levels of flavanols. Made using the company's Acticoa process and currently available only in Europe, the line includes dark chocolates that range from 50 to 70 percent cocoa solids with a minimum of six percent cocoa polyphenols. A milk chocolate variety that contains 2.4 percent cocoa polyphenols is also available.
The company has been gauging reaction to the product in Germany where it incorporated Acticoa in its Sarotti brand items and, according to reports, is pleased with the results. CandyBUSINESS sources say several U.S. manufacturers are now evaluating the line, and the company says it could begin distributing it in North America later this year or in 2007.
According to the company, Acticoa chocolate contains five times more polyphenols than red wine and nine times more than green tea, while the milk variety contains four times the amount found in standard milk chocolate. In terms of Oxygen Radical Absorbance Capacity (ORAC), the measure of a food's antioxidant power, Callebaut says chocolate made with the process contains 438 ORAC values, versus standard dark chocolate's value of 190.
Similarly, Masterfoods has dubbed its own process Cocoapro, and warrants that each serving of CocoaVia, which range in cocoa content from 50 to 60 percent, contains at least 100 mg of cocoa flavanols.
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While flavanols are grabbing the headlines and sales of dark chocolate items are increasing almost across the board, some forward-looking candy makers, led by Masterfoods' with the roll-out of CocoaVia, are exploring the opportunities that result from mixing nutritional science with the art of the indulgent chocolate maker.
BLENDING FLAVOR WITH NUTRITION
When first launched online, the CocoaVia line-up was limited to three crispy, granola-style snack items. But with its retail introduction last Fall in the nutrition sections of selected Wal-Mart, Target and Wild Oats stores, the line was extended to include 90 to 100 calorie per serving chocolate bars in Crispy, Original, Blueberry Almond and chocolate covered almond varieties.
All varieties are said to be excellent sources of calcium, as well as good sources of folic acid, vitamins B6, B12, C and E.
Machut says: 'We don't have good off-take data to share yet, but the stores that had it early came to us and said 'Can you bring this out fast to the rest of our stores?' They are very excited about the product and that is very encouraging.'
She adds that when first launched, the company thought CocoaVia's primary consumers would be those with cardiovascular concerns, but the picture has broadened considerably since the company began distributing the items nationwide this Spring.
She explains: 'We now think there is a much broader audience of people who are concerned with their health in general. There is a real dimension of those who feel they can have an impact on their health with the food that they eat, and by having more control of their diet they can impact their health. It is a much broader group than we started out thinking.'
Demographically, Machut says CocoaVia consumers tend to be women, 25-years and older.
'The female in the household is very important in terms of bringing these products into the home,' she says.
House of Brussel's ChocoMed division is also seizing the opportunity by introducing Choco+Med Pure Chocolate, a line of functional items described as a 'fusion of science and gourmet chocolate.' Released first to the European market, Donovan says the products target such concerns as prenatal health for expectant mothers, osteoporosis, sleep aid, multi-vitamin supplementation, stress relief and antiaging.
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Roll-outs in North America and other markets are expected soon, and Donovan says eight additional items are standing in the wings for a phase two launch. In addition, a second ChocoMed line targeting food, discount and drug store channels is expected to hit U.S. shelves in January.
He tells CandyBUSINESS: 'We have spent the last two years working closely with several of the largest nutraceutical companies worldwide developing formulas that taste great and offer legitimate functionality.' The initial release of 1.75-ounce bars targets antiaging, bone strength, sleep aid, vitamin intake and probiotic therapies. A line of panned items is also in the works, he says.
Donovan says the company has invested a significant amount of effort in the concept, and chose to rely on its scientific and academic partners to develop formulas that offer legitimate functionality.
He explains: 'We have spent a lot of time working with the functional ingredients to balance the taste with the efficacy of the supplements. We're a chocolate company first, and we stick to what we know best.' Research, he says, indicates that the Choco+Med line 'compares favorably to the leading gourmet chocolate products on the market. If it doesn't taste like high quality chocolate, it doesn't matter how good it is for you--it won't sell.'
For its European launch, Donovan says the company is shooting for SRPs equivalent to about $2.50 to $2.89. However, he points out: 'Going into the candy aisle and the health and wellness sections is not our approach. We are working with our retail partners to create hybrid sections that will allow our products to attract loyal confectionery customers and those individuals concerned about health and wellness.'
The challenge, he adds, is to find a balance that appeals to both types of consumers at the same time: 'We know one thing for sure. If an individual is vigilant in the caloric intake and eschews any form of fat in their diet, then they will not be a customer for functional confectionery products. If someone loves good chocolate--we're talking about real chocolate, not a nutritional bar with chocolate-flavored coating--then we have something for them to be excited about.'
Similarly, Alpine Confections, Inc. started its own nutritional product development efforts two years ago. The initial result was the Spring release in Canada of a line of fortified, naturally flavored and low-glycemic bars and moulded items sold under the Choco-Omeg label. Sold under the Boticelli brand and marketed by Dynamic Chocolates, Inc., the 1.27-ounce bar line makes its U.S. debut in August.
The launch includes Choco-Omeg Cardio Formula, trans-free Belgian dark chocolate with raspberries, Omega-3 fatty acids, flaxseed, fiber, coenzyme Q, lycopene and vitamins; Choco-Omeg Calcium Formula, a milk chocolate with chocolate cookie crunch plus protein, calcium, vitamin D, fiber, phosphorus, magnesium and a berry blend; and Choco-Omeg Memory Formula, a milk chocolate with real orange bits and natural orange flavor, choline from soy lecithin, vitamins and minerals at 25 percent or more of daily value and the Omega-3 fatty acids EPA and DILA.
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Dynamic's Sam MacDonald, vice-president, sales and marketing, says the company is aiming the bar versions for placement in pharmacy and drug store nutrition bar sections. So far, he says buyer reaction has been 'extremely positive. We are getting reception to list in at least 80 percent of them so far. We decided to go in as a bar because in the nutritional bar set there really wasn't anything indulgent. There are a lot of meal replacements and things like that, but we felt that there was a fit for a line of products in that category that is a little bit more indulgent.'
The moulded versions, 12-gram domes in 12-ounce hexagonal boxes, are shooting for a spot in the supplement set.
He explains: 'The supplement set was a natural progression for us. We saw the likes of Viactiv in the top five of sales, and it is a more indulgent type product. The Omcga-3s are also the fastest growing supplement ingredient, so it made sense to go after the indulgent factor in the supplement set.'
MAJORS RAMP UP INVESTMENTS
The move toward healthful snacking is an opportunity that hasn't been lost on major international players. For example, Nestle USA established its presence in the sports and nutrition bar market several years ago when it folded the PowerBar brand into its stable, and Masterfoods USA established its health and nutrition unit last year.
Similarly, the recently formed Hershey Center for Health and Nutrition is charged with developing products and technologies for heart health, weight management and mental and physical energy. Tellingly, the company says it expects the venture to become a 'significant source' of new product introductions.
Hershey's Dan Azzura tells CandyBUSINESS the effort is staffed by cross-functional teams from across the company, including personnel from product development, research, nutrition, human resources, marketing, public relations and legal.
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'One of the keys we are looking at is providing evidence that products or ingredients are healthy,' he says. 'We are doing clinical trials on ingredients and products, such as chocolate, cocoa and nuts, and I think it is critical to provide consumers evidence that there are clinical trials behind the claims that we are making.'
Two of the company's priorities revolve around the nutritional value of chocolate and nuts. He explains: 'We really want to focus on positive nutrition, those ingredients or components in a food that are healthful, rather than negative nutrition where you are taking something out of a food, such as reducing fat or taking out sugar or calories. Although that is important, the focus is on inherent positives.'
For example, Hershey recently launched PayDay Pro High Energy Protein bars with 16 grams of protein and 14 vitamins and minerals. The nutrient dense snack is merchandised in the nutrition set.
'That really plays to the sustained energy area--with great tasting, honest protein coming from the peanuts,' Thomas says. 'But I actually think that consumers know that in the nutrition segment, they get things that tend to be a little more functional and medicinal. I believe there is a huge opportunity for us to bring healthier items into the confection aisle.'
To that end, she adds, there appears to be no reason to expect the category leader to ignore healthful opportunities in traditional sections. 'We are definitely not shy about bringing nutrition into the confection aisle,' she says.
Given all that candy makers have to offer in the way of delivering great taste, it is becoming clear that many are beginning to pay more than just nodding attention to the nutritional revolution in the food industry. That same commitment to flavor now appears to be transitioning into a new indulgent class of candy that delivers real nutrition to consumers and growth opportunities for manufacturers.
RELATED ARTICLE: HEALTHFUL GLOSSARY
* ANTIOXIDANTS: Compounds that protect cells against the damaging effects of reactive oxygen species by 'quenching' the oxygen appetite of free radicals in the body. Research suggests that consumption of cocoa and dark chocolate reduces cell damage caused by free radicals.
* CATECHIN: An easily oxidized water-soluble polyphenol and antioxidant believed to fight tumors and enhance immune system function. Cocoa nibs are said to be an excellence source of catechins.
* EPICATECHIN: A smaller, simpler flavanol found in abundant quantities in cocoa beans, red wine and tea. It might have potential heart benefits and has been found to have effects similar to insulin.
* FLAVANOLS: Flavanols are a distinct group of compounds in the flavanoid family. The predominant flavanoids in cocoa are flavanols.
* FLAVONOIDS: A class of plant secondary metabolites based around a phenylbenzopyrone structure. Flavonoids are known for their antioxidant properties, protecting against oxidative and free radical damage. They are part of the broader class of compounds called polyphenols.
* FREE RADICALS: Unstable oxygen molecules that damage cells, DNA and other biological structures. An imbalance between antioxidants and free radicals causes 'oxidative stress.' They are linked to cancer, aging, atherosclerosis, Parkinson's and Alzheimer's.
* OXYGEN RADICAL ABSORBANCE CAPACITY (ORAC): The measure of a food's antioxidant power.
* POLYPHENOL: A broad class of naturally occurring compounds found in plants and characterized by the presence of more than one phenol group per molecule. More than 8,000 have been identified in plants.
* PROANTHOCYANIDIN (PROCYANIDINS): Procyanidins belong to the flavonoid family and have antioxidant activity and play a role in the stabilization of collagen and maintenance of elastin--critical proteins in the connective tissue that support organs, joints, blood vessels and muscle. Research indicates procyanidins might strengthen capillaries, improve night vision and prevent and reduce blood clotting in smokers.
SOURCE: CHOCOLATE MANUFACTURERS ASSOC.
RELATED ARTICLE: EXECUTIVE BRIEF
Manufacturers large and small reveal the markets, strategies and new products that are pioneering a new generation of healthful treats.
