Despite cheaper alternatives to cocoa butter on the market and new European rules allowing vegetable fats in chocolate formulations, uptake for the replacers has been slower than expected as reticent food makers and marketers stick to the old recipes, reports Lindsey Partos. But there are signs that growth areas in the cocoa butter replacer market will open out as new countries amend their chocolate rules.
Aiming to target the growing Brazilian chocolate market, Danish speciality fats supplier Aarhus United has linked up with a new partner, Compania Oleaginousa Uruguaya in Uruguay, aiming to increase its market share of the vegetable fat business in Latin America.
The partnership will mean some investment from Aarhus - a first for the firm in South America - in the 'low end, two digit millions', according to Esben Vibe, CFO of the group.
"The burgeoning South American market is huge, opening up new markets for vegetable fats," Vibe told FoodNavigator.com.
A key influence in the Aarhus decision were new chocolate formulation rules in Brazil. Following swiftly on from the European example, in the last 12 months Brazil has amended the legislation to allow vegetable fats to replace up to 10 per cent - compared with the EU's 5 per cent - of cocoa butter.
Prior to the change in rules, these vegetable replacers were not allowed in chocolate-labelled formulations.
The growth development strategy for Aarhus is today intimately linked to changes in chocolate rules that allow for the use of vegetable fats. "We are tracking the new chocolate rules across the world and the increasing opportunities for Cocoa Butter Replacers (CBE)," said Vibe.
Speciality fats firms such as Aarhus and Swedish firm Karlshamns have not seen the uptake in vegetable fats in Europe that they had anticipated, and hoped for, when the rules changed in August 2003.
"By completely or partly replacing cocoa butter with these alternatives, chocolate makers can achieve economic and process benefits as well as better quality end products, said Karlshamns recently. But "change is coming slowly," commented Vibe, suggesting that the marketing people are adopting a cautious position.
For Vibe, as with all other CBR and cocoa butter equivalent (CBE) suppliers, price will be key to driving the market forward.
"The economic drive is strong. Vegetable replacers are considerably cheaper, approximately 80 per cent of the price of cocoa butter."
As cocoa butter continues to run at a relatively high price, and crops and price will always be vulnerable to climatic and political change, the use of cheaper vegetable fat replacers should be a convincing argument for international chocolate firms such as Nestle, Cadburys and Hershey. The top seven of which control 80 per cent of the global market.
But it would appear that change, at least in the eyes of the marketer, may not please the consumer. As the slow CBE and CBR uptake in Europe suggests, chocolate makers suspect that the consumer will not opt for the vegetable fat/cocoa butter mix, preferring instead the 100 per cent cocoa butter recipe. But there is also the argument that consumers will be tempted by low prices, made possible through cheaper ingredients.
The first European Union chocolate directive was agreed in 1973 and allowed the then new entrants to the European Community, the UK, Ireland and Denmark, to use a small amount of vegetable fats in their chocolate. Since this time, other European countries, notably Germany, have been fighting with chocolate 'puritans' - notably France, Belgium and Italy - for the right to use vegetable fats and still call their products chocolate.
The fight ended in 2000, and in August 2003 Europe enforced new legislation that allows manufacturers to replace up to 5 per cent of chocolate's cocoa butter content with vegetable fats.
"This decision guarantees more choices for European consumers," said Caobisco, the organisation representing more than 3,000 chocolate makers in Europe, in a statement when the rules were cleared.
For the first time, the milkier formulation of British milk chocolate is now recognised throughout Europe, although in the rest of Europe it must be labelled as 'family milk chocolate'.
"For many years the German confectionery industry lobbied strongly to say that if vegetable fats are going to be used [by UK, Denmark and Ireland], let there be a level playing field," Cliff Luckloo, from the UK Biscuit Cake Chocolate Confectionery Alliance (BCCCA), that represents 95 per cent of the manufacturered products in the UK, recently said to FoodNavigator.com.
According to Caobisco - Association of the Chocolate, Biscuit & Confectionery Industries of the EU - in 2001 Switzerland, coming in at 10.6 kilos, topped the graph for the highest consumption of chocolate confectionery per head per year in Europe. Austria came in second with 9.6 kilos, followed closely by Ireland with 8.8 kilos per capita, Norway 8.6, Denmark 8.4 kilos and Germany 8.2 kilos.