Intro: I wrote this essay during my freshman year for my “University Seminar” (small class focused on writing) on “Economics and Happiness.”
Ashley Knipp, Amitava Dutt, University Seminar Paper 3, 23 April 2014
Chocolate: A Sweet and Savory Communication Device
Chocolate is widely known as “one of civilization’s most significant indulgences” (Telly 165) and rightly so. Society’s demand for chocolate is obvious, given the supply and the options throughout. Within the first few steps into your local Walmart, you are likely to see chocolate brands like Hershey, Mars, Godiva, and Lindt covering the shelves. There are so many choices, but not all at the same price. A standard Hershey bar costs just $1.28, while a bar of Godiva about the same size costs $3.49. After examining the shelves upon shelves of chocolate candies, it is clear that two distinct types of chocolate are sold. The more expensive type has an obvious luxury component, while the other is more of a common household snack. Why are some brands of chocolate so much more expensive than others? Do the expensive chocolates really taste significantly better than cheaper chocolates? To find the answers, I researched the chocolate market and conducted a survey and taste test comparing luxury and snack food chocolates. Contrary to the common assumption, the substantial price difference between luxury and snack chocolate is based more on the image of the brand rather than the taste of the chocolate itself.
Chocolate is made form the cacao bean, which has been a cherished delicacy since the beginning of time. In all seriousness, this could be true. The Old World was first introduced to cacao in the 1500s during Columbus’s fourth voyage. The native Mayans valued the plant enough to use it as a form of currency. The Aztecs created the first “chocolate bar” by spreading cacao paste on a dried banana leaf until it hardened (Lebovitz 15). The Aztecs also produced a foamy drink from cacao which they considered the “delicacy of delicacies,” and when the Spanish Conquistadors first got a taste, cacao became an instant sensation in the Old World. Spaniards claimed that drinking a cup of chocolate in the morning was “all the food you needed a day” (Coe 147-153). The first full-scale, chocolate factory was established in Britain in 1728 and not long after, Rudolph Lindt from Switzerland created the first silky, smooth chocolate bar that we have come to know and love (Afoakwa). Since then, chocolate production boomed and grew throughout the world. It is said that Godiva is the company for responsible for first introducing the United States to premium chocolate in 1966. Since then, luxury chocolate has grown into a $100 million market (Albright 138).
Experiencing the Difference
According to chocolate specialist Charles S. Telly in the book Chocolate: Food of the Gods, it is difficult to discern what brand holds the title for “highest quality” chocolate because many chocolatiers, including Godiva, buy already-manufactured chocolate and alter it in a process called “coating” to create their “unique” chocolates (Telly 175). Some American chocolate manufacturers such as Nestle both manufacture and coat their chocolate, but use formulas strongly influenced by the Swiss chocolatiers, like Lindt. This stands to reason, considering that the earliest, successful chocolatiers were established in Switzerland, as mentioned earlier.
The chocolate-making process and formulas are very similar, so significant differences in a pure chocolate candy bar are difficult to create. If this is true, why is the chocolate industry separated so distinctly into two groups?
In her book, The Overspent American, Juliet B. Schor describes the importance of branding “Companies expend enormous effort to make products identifiable through branding, packaging, marketing and advertising. Twenty years ago, who would have thought that Americans would be drinking designer water[?]” (Schor 46). This is the same with the boom of the designer chocolate market. To separate themselves from other brands, firms focus on much more than just the product itself. They also consider the packaging and the type of a situation a buyer would want to use the product for.
Snack Food Chocolate
According to an Opinion Research Corporation study, 84% of all U.S. households eat chocolate and 86% of those people eat chocolate at least once a week (Albright 140). If this is true, then cheaper chocolates are more likely to be bought and eaten more often than luxury brands. They provide a self-satisfying experience without much influence outside the consumer. Mars (represented by Dove and M&M’s) and Hershey are the cheaper chocolates I will focus on.
Because snack chocolate targets buyers who need to satiate their own sweet tooth, they are packaged strategically to fulfill those buyers’ needs. The Dove chocolate I bought for my taste test came in a 9.5 ounce bag filled with individual chocolates wrapped with tinfoil, costing about $0.38 per ounce. Individually wrapped, bite-sized chocolates are easier to enjoy on the go. Since they are small portions able to be quickly unwrapped, they are easier to eat more often. Similarly, Hershey chocolate bars are packaged with one thin layer of plastic, easily ripped open for fast access and quick consumption. A standard Hershey chocolate bar is just barely more than a dollar. Hershey even makes a whopping, 5-pound bar at $0.57 per ounce that is still cheaper than Godiva ($1 per ounce). M&M’s are the quintessential snack food chocolate, very cheap, very plentiful, in very tiny bites. M&M’s are popped in a mouth one after the other, just like popcorn.
Snack food chocolates cater to consumers who buy chocolate for themselves as a casual, common dessert or snack, making it affordable, convenient, and as guilt-less as possible. The packaging allows for a quick experience. The faster the snack food chocolate is eaten, the more the customer will want more chocolate and the less guilt they will feel for eating it. The exception to this is Hershey’s 5-pound bar. Just the fact that Hershey sells a 5-pound chocolate bar adds to the image of Hershey as a brand. Hershey chocolate’s image is about the individual eating as much as he or she wants, having no limit to what the customer can have. This is not something to “save” and “savor” but to eat and enjoy to a customer’s heart’s content without judgment.
Premium, or luxury, chocolate has become a booming industry as the American palette demanded more out of chocolatiers. Artisan chocolates with exotic fillings and textures fill local chocolate boutiques at high prices per ounce. For the purposes of this paper, I will focus on the global brands of luxury chocolate such as Godiva, Ghiradelli, Lindt, and Ferrero Rocher. When buying at Walmart for my taste test, I saw that one Lindt bar costs $2.50, Godiva and Ghirardelli costs about $3.50 per bar, and one package of Ferrero Rocher truffles costs over $7. These chocolate brands sell much more than the taste of their product. They sell the experience it provides.
Again, it is interesting to examine the packaging, the first impression these chocolatiers make for their products. Unlike the rip-open-and-pop-in strategy that snack food chocolates apply, luxury chocolatiers present their products as gems to be savored and treasured. Godiva, Lindt, and Ghirardelli chocolate bars are all covered in sturdy, commanding cardboard rather than flimsy plastic. This may seem strange, but compare this idea to a hardcover book and a flimsy paperback. The hardcover is also always more expensive than the paperback. Once the cardboard is removed from the chocolate bar, shining foil in metallic gold and silver adhere to the chocolate. The metallic colors follow the “golden ticket” idea in the classic family film, “Willy Wonka and the Chocolate Factory.” Luxury chocolate is presented as a treasure, something to appreciate and value. The aluminum wraps the chocolate more closely and carefully than plastic does, enabling a slow reveal of the chocolate bar and that encourages you to savor each bite. Godiva would not dare sell a 5-pound chocolate bar because it does not fit its image. Luxury chocolates are packaged to send a message and are priced to impress.
Sending a Savory Message through Luxury Chocolate
As discussed earlier, buying and eating snack chocolate is often an individualistic experience. Chocolate is not shown off or displayed, especially cheap chocolate. This is what Schor would call an invisible product (Schor 45). Invisible products are not subject to observer judgment, which is why Hershey and Mars have a reputation for comfort and excess indulgence.
Adversely, luxury chocolate is a visible status product, a social good. The market thrives on its ability to send a message between observer and consumer. I will explain this in terms of conspicuous consumption.
The Power of Conspicuous Consumption
Conspicuous consumption is defined as the buying and/or usage of a product in order to communicate a message to those who know you are buying or using that product. Examples of conspicuous consumption include buying clothes made by popular designers so that others will think you are fashionable or buying an expensive car so that people will assume you are wealthy. Conspicuous consumption is used to gain status, and this makes people happier.
Why does being “richer” than someone else make us happy? In his book, Happiness: Lessons From A New Science, Richard Layard argues that we use groups of people in our physical or mental environment called reference groups to compare and evaluate ourselves. The physical environment could be neighbors and friends who all have BMWs, so you then feel that you need to own a BMW or you are of lower status than your neighbors. A mental environment would be the internet, which preaches things like, “if you don’t buy her Godiva for Valentine’s Day, you don’t love her” in advertisements, memes, or twitter posts.
Today’s world is filled with logos and designer everything from water to underwear, which is proof of the increasing importance of conspicuous consumption in today’s society. In her aforementioned book, Schor also discusses women’s cosmetics as a visible product shown off through conspicuous consumption. In this multi-billion dollar industry, Schor asserts that women pay hundreds of dollars for makeup because they are looking for prestige, for glamour, and the exploitation of brand names such as “Chanel” to make them look well-off and fashionable. One Chanel ad actually read, “Perfect for preening in public” (Schor 50). For example, a woman might use her $25 Chanel lipstick in public so that those who see her apply it after dinner will think her to be high-quality in wealth and beauty. Because lipstick is applied in front of possible observers, this makes lipstick a visible product with the opportunity to send a message, while makeup like foundation is often applied at home before you go out, or in a powder room, so a woman may buy the cheaper foundation and more expensive lipstick. You are paying for the brand name, which has a reputation that sends a message about the perception of high quality.
We compare ourselves to our reference groups and use conspicuous consumption to gage who is wealthier than another within the group. Studies show that it doesn’t matter how rich or poor your reference group is; as long as you are “better off” than someone else in your reference group, you are happier (Layard 42). This is why Telly writes in Chocolate: Food of the Gods, “they might drive a BMW, but they might drive it to a discount warehouse” (Telly 168). We may pay extra to craft a reputation of being wealthy, but that does not mean we don’t take advantage of the low prices of invisible goods. The same idea persists in why we buy ourselves cheap chocolate, but the tables turn when we are buying chocolate for someone else.
Conspicuous Consumption in the Chocolate Market
Since we don’t wear chocolate like clothes or chew with our mouths open to display our chocolate consumption, how is luxury chocolate “seen”? The conspicuous aspect of chocolate is in the act of buying for someone. This is best explained through social norms associated with chocolate and holidays. In his book Luxury Fever, Robert Frank discusses social norms and their effect on society. Social norms “alter individual incentives to engage in various activities” (Frank 201).
A substantial amount of chocolate is consumed during the holidays of Halloween and Valentine’s Day, both in the economic and physical sense, but each one has significantly different social conventions. As a result, two different types of chocolate are consumed. During Halloween, the intended consumers are children wandering neighborhoods asking for candy. This is a tradition where people give to kids they have never met before and may never formally meet. There is no message to communicate, but it’s a social norm; so cheap chocolate is not only acceptable, but expected. Children do not care about the message that candy sends, as long as it takes good. Not all of them have gone through puberty and begun the grueling process of comparing themselves to the world outside themselves.
On Valentine’s Day, it is a social convention for people in relationships to buy each other chocolate. Due to social norms, buying your significant other Godiva, Ghirardelli, or Ferrero Rocher is expected simply because it is most expensive. Buying him or her Hershey or Dove elicits a significantly less satisfied response because its reputation is not impressive enough. The social norm is, if he buys you Hershey, he is not putting enough effort into your gift. Thus, there is a common assumption that someone should buy expensive chocolate for the people they care about. Essentially, when it comes to luxury chocolate, you’re paying for the reputation.
It would make sense to assume that the most expensive chocolate would be the best tasting, but is this true? How effective are luxury brands’ attempts to craft an impressive image? To find the answers, I conducted a survey and a blind taste test around the University of Notre Dame campus (see Appendix). Thirty-four people completed the survey, which asked three important questions. I asked people what their favorite chocolate was out of the given options; Godiva, Ghirardelli, Lindt, Mars, Hershey, Cadbury and “other” in order to discover if people preferred the more expensive chocolate or cheaper chocolate. The most popular “favorite chocolate” brand was Lindt (cheapest luxury chocolate at $2.49 per bar), which 28% of the participant pool chose, while the rest fell between 10% and 20% of the pool except Godiva, which only 3.6% chose. Considering that Rudolph Lindt created the kind of chocolate we know today, and the many popular chocolate brands use formulas with large influences from the original successful Swiss chocolatiers, this makes sense. Godiva’s low percentage was unexpected.
Interestingly enough, when I asked what brand of chocolate a participant would buy for a significant other, Godiva was the choice of the majority. Thirty-two percent said they would buy Godiva despite the fact that it was chosen as “favorite” the least. I asked this to find out if people follow the social convention of buying expensive chocolate for their significant other, as discussed above in the context of Valentine’s Day. Apparently, the convention is valid. Also, the price and packaging does seem to have an effect on a brand’s image, since one participant simply said they would buy “expensive brands because it makes me look good” while another said they would buy a significant other chocolate “in a nice box.” Image is everything, and these results confirm my earlier statements.
Lastly, I asked people what kind of chocolate they would buy for themselves. Twelve people, an overwhelming majority, stated that they would buy themselves Hershey chocolate. Lindt and “any” tied for second with five people each. These results confirm my analysis about Hershey’s attempt to target buyers that buy for themselves.
The Blind Taste Tests
The second half of my study was a set of blind taste tests. I established three categories; milk chocolate, dark chocolate, and “eccentric” chocolate (chocolate with interesting flavors or abnormal adjustments) with 5 different samples in each. With the foreknowledge that some people only enjoy one type of chocolate, I allowed participants to choose which categories they wanted to sample. I told them to rate each sample against the others within its category 1 through 5, with 1 being the best tasting. If I were to have each participant try all 15 samples of chocolate, those who hated one type of chocolate might have skewed results. Also, more people were willing to participate if they were allowed to avoid a category.
To set up the test, I bought several brands of chocolate in those three categories, broke them apart in small pieces, placed them in individual containers, and labeled them with codes. Cadbury, Dove (as my Mars representative), and Hershey were my snack food chocolate representatives, costing between $1 and $2 per bar. Lindt ($2.49), Godiva ($3.49), and Ghirardelli ($3.49) were my main luxury chocolate representatives. Each milk chocolate sample was labeled M1 through M5, each dark chocolate sample was labeled D1 through D5, and each “eccentric” chocolate sample was labeled E1 through E5. Brands were scrambled so that one type of brand would not correspond with one number across the categories. In order to reduce error in my study, I asked participants to refrain from “reading” their chocolate, since every chocolate had its brand name engraved into each piece. It was nearly impossible to make every chocolate sample have the same shape, so I also gave participants the option to tell me if they recognized the brand, what brand they thought it was, and whether they recognized it by shape (denoted with an “S”) or taste (denoted with a “T”). The shape of the chocolate did not seem to have a significant impact on the blind taste tests.
BLIND TASTE TESTS RESULTS
Twenty-three people taste-tested the milk chocolate category. An overwhelming majority of 56% of participants rated Lindt chocolate as the #1 best-tasting sample in the category. Again, this makes sense, for the same reasons as why Lindt was said to be the favorite most often. Dove and Hershey tied for second in making the top 2 in milk chocolate. This is interesting because they are the two cheapest chocolates, and yet they are preferred. This provides evidence that either Hershey and Dove are better tasting, or the more someone eats a certain type of chocolate, the more used to it they get, and they build up a comfort and loyalty to the brand.
Twenty-one people taste-tested the dark chocolate category. Dove was rated highest most often and rated in the top two most often, leaving the expensive Ghirardelli in the dust only making up 7% of the top 2 results.
Twenty-five people taste-tested the eccentric chocolate category. As expected, the most expensive in the category, Ferrero Rocher, was rated the highest most often. This truffle has several ingredients, including a smooth, soft center, which is more appealing than the hardness of the rest of the chocolates.
Other than the observations I have pointed out, the ratings were considerably scattered. Most were somewhat evenly scattered. This provided sufficient evidence that there no significant consensus on the “best tasting” chocolate brand across all categories. Lindt resulted in the largest percentage at 56%, but half is nowhere near a viable consensus. Moreover, Lindt and Dove were not the most expensive chocolates, and yet they were rated higher more often. Out of all 69 ratings, the most expensive chocolates (Godiva, Ghirardelli, and Ferrero Rocher) were only rated highest 17 times, less than 25% of the highest ratings.
According to this study, the most expensive brands are not necessarily the best-tasting.
The chocolate market has always been highly valued and has grown very large with each brand’s formula not significantly differentiable from one another. Today’s market has clearly been split into two distinct categories; cheaper, snack food chocolate targeted at the buyer buying for themselves, and expensive, luxury chocolate targeted at the buyer wanting to impress using the brands as symbols of ostentation. They differentiate themselves by defining their images for the targeted buyer. Hershey and Mars cater to an individual buyer’s sweet tooth, while the luxury chocolatiers promote conspicuous consumption in forms like gift-giving, presenting their product as a treasure to be savored. According to my survey, my descriptions of these reputations are valid.
Despite the fact that the reputations match the prices, the taste tests I conducted revealed that the prices did not match the taste. Lindt, the cheapest of the luxury chocolates, was favored in the milk chocolate category and Dove, the second cheapest chocolate out of all the samples was somewhat favored in the dark chocolate category. Ferrero Rocher was somewhat favored in the eccentric category, but among all the categories there were too many scattered responses to conclude a significant consensus on a “best-tasting” chocolate brand.
In summation, the chocolate market separates itself by visible and invisible products as defined by Schor. The visible goods being luxury chocolate brands that attain a “better” reputation due to the power of conspicuous consumption, but this is mostly based on branding, not that the taste of the luxury chocolate product itself is “better.”
Appendix: Chocolate Survey/Taste test
Afoakwa, Emmanuel Ohene. Chocolate Science and Technology. Chichester, U.K.: Wiley-Blackwell, 2010. Google Books. Web. 28 Apr. 2014. <http://books.google.com/books?id=404r7yb-618C&pg=PT22&dq=chocolate+market&hl=en&sa=X&ei=LB5gU7qXJeibygGWgIGADQ&ved=0CE0Q6wEwAg#v=onepage&q=chocolate%20market&f=false>.
Frank, Robert H. Luxury Fever: Weighing the Cost of Excess. Princeton, NJ: Princeton UP, 2010. Print.
Greweling, Peter P. Chocolates and Confections: At Home with the Culinary Institute of America. Hoboken, NJ: John Wiley & Sons, 2010. Google Books. Web. 24 Apr. 2014. <http://books.google.com/books?id=mPDTUTyhzAYC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false>.
Layard, Richard. Happiness: Lessons from a New Science. New York: Penguin, 2005. Print.
Lebovitz, David. The Great Book of Chocolate: The Chocolate Lover’s Guide, with Recipes. Berkeley: Ten Speed, 2004. Google Books. Web. 28 Apr. 2014. <http://books.google.com/books?id=cXncz3jpeeMC&printsec=frontcover&dq=history+of+chocolate&hl=en&sa=X&ei=0BNfU9XDAcKfyQH21YGICg&ved=0CDIQ6AEwAQ#v=onepage&q=history%20of%20chocolate&f=false>.
Schor, Juliet. The Overspent American: Upscaling, Downshifting, and the New Consumer. New York, NY: Basic, 1998. Print.
Szogyi, Alex. Chocolate: Food of the Gods. Westport, CT: Greenwood, 1997. Print. Web. 20 April 2014.