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

Interesting take on this. However, I see one issue and that is that the majority of rich people who could pay a lot for chocolate simply don't live where chocolate grows (obvious exception is Hawaii and perhaps some other places). Wine on the other hand grows where the rich live. I have paid $20 for chocolate bars I can buy here (which is a lot and sometimes not really worth it)but with a wife, kids, mortgage etc I haven't been OS in over 10 years. One other thing is proximity of other bean to bar makers, in a wine region you have 10s if not 100s of big and boutique wineries offering theirown little twist on the local conditions and then there are the varieties and blends in the mix, perhaps again Hawaii is an exception here. The point being that people who go to or holiday in wine regions want this variety and expect to visit 5-10 wineries in a weekend.

Love this topic...not sure if anyone is still following but we have a tree to bar single estate chocolate business in Costa Rica. It seems to me that if there is to be a true path to the wine model...the chocolate would need to be made at the location as well. I know the challenges because I have found several tricks to the problem of making chocolate in a warm rainy climate...but it would be nearly impossible to produce a massive amount for worldwide distribution.

The making of chocolate on the farm converts the chocolate from something on your grocery shelf to something you travel for...much like wine country is for winos.. The most expensive bottles of wine are not in the liquer store...they are in the cellars of the winery. You might even have to know the owner to taste some of these wines. The same is true for chocolate if the chocolate is made at the farm.

Much of the flavor developed in the chocolate is set before the chocolate maker even gets the beans...so it seems to me that chocolate made at origin may also find its way into "special" since in that case it is the same farmer who made the chocolate from tree to bar. Story, travel, excellent flavor and the cacao farmer gets the true fame for the excellence of the chocolate...

Since the single farm factory is very small the quantity of this chocolate would be very limited. The future of chocolate needs to include and experience for the consumer. Chocolate travel locations like Hawii and Costa Rica and recently I visited Guatamala have chocolate makers who are setting a new bar by creating these fabulous chocolates in which you must travel to there site in order to taste. Exclusivity and adventure.

Thanks for the forum topic. Very encouraging and informative for me.

Dear all,

During my chocolate classes, I always stress to the "students" about the amount of work involved in making chocolate. From the Plantation to the final couverture, bonbon, bar...

Gordon is making a lot of sense here!

$10 for a bar which should include "fair" prices to the farmers as a priority , the transport costs, packaging etc... not much really left...

There is certainly a lot of effort to "educate" the public and Journos that small producers are aiming for something else that a mass produced bar made from cheaply bought beans which is often not so interesting quality wise anyway.

I think journos are the one to lobby to make the public aware of the changes in the chocolate industry.

Thank you Gordon for your work

regards

Taking it from here to the topic of the OP - for anything like 100-dollar bar to get started it needs to start by being genuine article, the price of which connoisseurs would consider justified.

Appealing to Jennifer Aniston (or rather her character in Friends) segment would then follow, just by the virtue of authority of connoisseurs and the desire for exclusivity that is still - barely - affordable.

There are never enough of exclusive-ish treats for the ones who expect things for Valentine's, for Mothers' Day, birthday, wedding anniversary etc ad infinitum.

As a customer, while I cannot pronounce definitively on Amedei's Porcelana being a blend (I believe there are no strict rules for calling anything Porcelana), I do believe that all Amedei products are priced a little too high for their qualities. In other words, I consider it a ripoff brand and I would not be surprised.

On the other hand, I have not been disappointed in Valrhona.

And what about Emmaneul Andren Gastronomy's $98 for four pralines? Jeez

Note: The post has been edited by the moderator because:

Interesting theory, Brad. Thanks for sharing.

Have you seen Valhrona's El Pedregal Porcelana? It's also dark. They even say it's all "estate-grown". If they're saying it's Porcelana but it's actually a blend, isn't that illegal? Not sure, just asking. I always thought Valrhona was pretty upstanding.

On the note of porcelana, I doubt that Amedei's porcelana is even pure porcelana! I think it's a blended rip off. I've had it, and here's why I think so:

1 Amedei's porcelana bar is very dark.

2. Porcelana cocoa beans are porcelain white when harvested (hence the name porcelana)

3. Once fermented, they turn to a reddish color on the outside and a tan color on the inside.

4. Once roasted, the beans/nibs turn to a red brick color and have VERY strong fruity notes.

5. I have found NO physical way to make Porcelanachocolate as dark as Amedei's without blending them with another dark bean. Alkalizing doesn't work on that bean to darken it, and who in their right mind would alkalize the holy grail of chocolate just so that it looks like all other chocolate???

In my opinion, Amedei's porcelana is a BLEND, and not a true porcelana. I think you're getting ripped off. Until they prove otherwise I will continue to think that, and express my opinion which is also based on working with porcelana beans daily for 4 yearsfrom a couple of different regions of the world.

Brad

That's paying for presentation packaging, though--fancy outer box, inner boxes, individually-wrapped pieces. Amedei's most expensive bar remains Porcelana, at $16.50 (or $33/100g or $151/lb). It's among the priciest bars in the world (apart from obvious hustles), but still a far cry from a $100 bar.

Another expensive bar... Amedei Le Selezioni Collection. $180 for 6 bars in a fancy wood box. So 1 bar/box of 12 pieces is $30. BUT each box/bar is only 55g ! $30 for 55g = $54.55/100g!

I disagree that it would HAVE to be exceptional. Once you get into such rarified areas, very few people can or will have tried it. But the back story has to be good.

As regards Bittersweet, I can only judge from their website, but I see more coffees on offer than chocolate drinks. No range of single origin chocolate drinks.

I have no idea of their method for making hot chocolate, but it will often be cooler than expected, just as good coffee is. But chocolate can be given an extra kick temperature-wise with a few seconds in the microwave.

Interesting point. As I see it, to get to the $100 bar, the quality would have to be exceptional. It would for wine, and people are already used to paying big for wine. They're not used to paying that much for chocolate though, so it would need to be something exceptional and consumers would have to really be able to taste the difference. It would also have to be something not easily replicated, to minimize the chance of having a "cheap knockoff."

As for chocolate bars, good idea, long overdue. There are the beginnings of such, and the Bittersweet cafe in San Francisco is an example (although they never seem to make hot chocolate hot enough, it's usually tepid for some reason). But if people see a chocolate bar in the same way they see a coffee bar, then the $100 chocolate bar may have some trouble. People won't pay $100 for even a whole pound of coffee, let alone a fantastic cup.

My point regarding the $100 bar is just that -- what's the point? If it's to make totally exceptional quality that is truly noticeable, then great. If it's to get the industry all ginned up, then it's harder to support, but it might still work with certain consumers who get caught up in status. We all know a huge company thathas done a lot of that -- pretty gold boxes, high prices, etc. and personally, I don't think they have a truly superior product. They've even been known to include some vegetable fat for cocoa butter. Ick. And it does nothing to help the industry, even if their bottom line may be good. Again, I'm not in the industry, just a consumer, but it may be good to hear from some of us, too.

I think that with such specialty chocolate it ought to be 50g. 100g always seems more like munching chocolate to me.

We have that chocolate bar too. But only 5,50... though without the fancy booklet, so I guess the storybook is half the final price.

There is much discussion here over whether chocolate should emulate wine or coffee to raise the profile towards thar $100 bar.

I think that we need to take a little from both. The $100 bar, should I believe be based on a vintage, after all that is how wine has reached such dizzy heights. There are even wines that will probably never be opened because they are the last one or two of a particular year, of a particular grape from a particular vineyard.

On the other hand the coffee model has opened up a wider market for better quality coffees. As has been said coffee is a daily neccessity for many people. Why cant chocolate do the same.

The focus of this discussion has been on chocolate bars. Why not on cacao drinks? Cacao was originally served in cafes as a drink, let us go back to those roots with our current technology. Pure cacao drinks, pure chocolate drinks, and chocolate milk drinks. Such cafes would also be perfectly placed to sell high end chocolate bars.

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.

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

I agree with using 100g as a benchmark.

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

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.

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-19th 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 20th 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.

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.

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.

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.

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

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.

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.

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

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.

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 . . .

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.

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.

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...

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.

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.

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

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.

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.

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.

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

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

Cheers

Brad.