BUSINESS REFLECTION: After the Bell: Are we past the point of peak chocolate?

Only a fool would write off chocolate entirely, but the rising demand for healthier snacking and Tiger Brands reducing its chocolate slab production point to a significant change in consumer tastes and market dynamics.

There is an unfortunate division along the lines of Star Wars and Star Trek. Those on the dark side have yet to properly understand how a teleporter is infinitely more powerful than a lightsaber.

There are also those cultists who believe a phone is not a phone without the “i”, and those sensible people who are not paranoid about Android.

Chocolate is a great bringer of family peace in these moments.

Those who support Star Wars and Star Trek can both align on a 5 Star bar. There is plenty of space for Peppermint Crisp. Even the person who likes nuts in their chocolate (gross!) is given some space.

But it would seem that while those bars are doing quite nicely, in fact the people who make the bigger chocolate slabs are under a lot of pressure.

Tiger Brands confirmed on Monday, June 1 that they’re selling the equipment that makes Beacon chocolates and sweets, but keeping the bars.

Their CEO, Tjaart Kruger, told The Money Show that the bigger slabs have been “very unprofitable” for quite some time. The assorted chocolates and Easter Eggs have been losing money too.

In fact, he suggests the entire chocolate business is under pressure, because the price of cocoa “spiked so heavily” 18 months ago.

But the real longer-term problem is the “driver for healthier products”. He says they’re seeing more demand for savoury snacks and healthier snacking.

Think of their Jungle energy bar, which is now number two in the bars category. It gives you the same feel as a chocolate bar but is healthier (well, at least it looks healthier; whether it is healthier is up to someone who spent a lot more time studying than I did).

In societies with big middle classes we are seeing more demand for healthier products and less demand for the more fun, unhealthy stuff.

Beer makers have been reporting selling lower volumes of “normal beer” while doing quite nicely from the zero-alcohol stuff (at some point those terms might well reverse soon, and what we call “zero alcohol beer” now might become “normal” while beer with alcohol could become known as “alcohol containing beer”).

Some spirit makers are reporting lower volumes too, while the wine market is also in a very slow and very long decline.

It would make sense then that this applies to the chocolate market too.

And it might explain why bars, containing smaller amounts of chocolate, are still profitable, w