Posts Tagged ‘Chocolate’

A consumer who eats a chocolate product would want to know that it contains the ingredients it is supposed to — mainly cocoa. That sounds so reasonable and understandable. If you are a true chocolate lover, it is not enough that the food product tastes like chocolate; you want it to be really a chocolate. This is expected not only from chocolate bars and confiserie (pralinés, truffles) where it is obvious. It should also hold for snacks like chocolate-coveted waffles, cookies and biscuits with chocolate, and milk delicatessen with chocolate. But “chocolate products” are not always what consumers would expect or believe them to be. One example as such is a milk deli called “Milky” from Strauss dairy company (Israel).

Some companies may think that resembling chocolate in flavour and appearance is enough. It does not have to be a complete fake (i.e., no cocoa, just flavour and colour substitutes). The more clever companies include in the product some cocoa substances, only to give it a feeling of chocolate. However, formal food standards are quite strict and require that a product contains a minimum (proportional) amount of cocoa substances to be designated as “chocolate” or a “chocolate product”. An honest company that sells a product which does not stand by the standard can state that its product is “chocolate flavoured”, though it leaves the consumer to figure out what that means. Yet sometimes companies tempt to hide the reality about the chocolate content of their presuming product.

Milky is a special dairy deli product. It comes in two layers: a chocolate cream at the base (about 2/3 of the cup) and whipped cream on top. This combination has bought Milky many fans — some prefer to keep the layers in place and dig in with a spoon to pick some chocolate cream from below and then take whipped cream from above, whilst others simply mix the creams well together and indulge on the composition. Milky was created and first launched in 1979 when Strauss, now the second-sized dairy in Israel, was a marginal local dairy. But the deli has made its leap to fame and popularity only in the early 1990s following its wonderful, humourous commercial “The Chase for Milky” (two housewives chase each other in a supermarket to collect the last Milky on the shelf). It was one of the best executions of a TV commercial in the early days of advertising on TV in Israel (Channel 2) , and it quickly caught the attention and favour of consumers.  Along the years Strauss has added variations of Milky like a supplement 0f tiny candy beans, “extra chocolate”, and “mini” serving.

But is the chocolate cream really made of cocoa, its essential component? Two class action suits against Strauss (for 274m shekels=~€62m), submitted in 2013, have put the composition of the chocolate cream into question. Two claims were made, one against the label title declaring the product as “Milky Chocolate”, and another regarding an image of a chocolate cube on the label. The two lawsuits were settled together this month (February 2015) in court in a compromise agreement between the plaintiffs and Strauss.

Only a symbolic monetary compensation was awarded because no direct damage to the plaintiffs or the consumers they represent could be proven  — though Strauss has agreed to donate dairy products in worth of 300,000 shekels (~€70,000) to a peripheral hospital or a similar association as decided by court. But although the litigation ended in a compromise the bottom line is that Strauss was charged with wrongdoing by misleading consumers and was ordered to change the way it describes its Milky products (“Milky Chocolate”, and its “extra chocolate”, “mini” and “light” versions). The judge ruled that the designation “chocolate”, as if the product contains chocolate, misrepresents its content; the label should instead state that Milky is “in chocolate flavour”. It was also confirmed that the picture image of a chocolate cube may give consumers a false impression about the product’s nature but without concluding that the image should be removed.

The heart of chocolate is its cocoa content: The amount of cocoa mass and cocoa butter (making up cocoa solids) in the final product. The European Union regulation from 2003 requires that for being designated “chocolate” or “chocolate (contained) product” cocoa solids must compose at minimum 25% of the product’s weight. This minimum particularly describes “milk chocolate” as the baseline. The practical norms vary for different types of chocolate. In Belgium, for example, the norm is that milk chocolate contains 30-35% cocoa solids, and dark or bitter chocolate includes 70% cocoa solids (extra bitter chocolate will have even 80-90% cocoa solids). White chocolate has only ~20% cocoa butter and no mass and therefore some connoisseurs question its status as “chocolate”.

  • The rule for (brown) chocolate in the EU is that cocoa mass should weigh at least 2.5% of the product, the rest of the cocoa solids made of cocoa butter. However, a larger amount of cocoa mass will improve the taste of chocolate (e.g., richness). The amount, quality and processing of cocoa beans making the cocoa mass are determinants of the overall quality of the chocolate.

The chocolate portion of a product comprises primarily cocoa solids, milk solids (including milk fat) and sugar. Producers of inferior or imitation chocolate replace cocoa butter (fat) with vegetable fats, yet the EU has entered a stipulation that vegetable fat can account for no more than 5% of the chocolate portion of the product (not of its total weight!). Other ingredients of the product (e.g., nuts, honey filling) contribute to the total product weight in addition to the chocolate portion or mix.

  • The UK has been specially allowed to market milk chocolate with just 20% cocoa solids and 20% milk solids whereas in continental Europe the norm is a mix ratio of 25% cocoa solids to 14% milk solids of total product weight. However, Europeans designate the former mix as “family milk chocolate” to be distinguished from their “milk chocolate”.

The current standard in Israel from 1996 refers to a minimum requirement of 30% cocoa solids in chocolate, but the Standard Institution of Israel notes it is “under revision” (according to a draft proposal from August 2014 the SII may adopt the EU rules). It is not revealed if the Milky product contains an insufficient amount of cocoa solids (even just cocoa butter) or none at all. Yet, whether the court ruling is based on the current standard or considering the prospect standard in line with the EU, the level of cocoa solids in Milky has had to be low enough to fail formal chocolate regulations either way. Since the product is largely made of milk produces, it may give the manufacturer a relatively large space for maneuvering between cocoa solids and milk solids. Ironically, the “extra” version of Milky that contains a greater amount of chocolate cream, and perhaps should have been “darker” chocolate, is not recognized as “chocolate” either.

It is very much possible that Milky did contain a larger proportion of cocoa substances in its chocolate cream in previous years. Manufacturers tend to get into a quality-price cycle in which they try with time to lower their costs by reducing the amount of higher quality ingredients in their products that are more expensive, thus lowering the product’s quality; they may nevertheless continue to raise the price to consumers to improve their profitability. There could be mitigating circumstances in this case, but the question is how companies like Strauss handle them. The rising prices of raw cocoa in the global market, especially so in the past few years, could have pushed manufacturers to gradually use less cocoa in the chocolate portions of their products. The alternative would be to raise the consumer price, but that has a limit in consumer acceptance — particularly in view of the growing social protest since 2010. It is worthy to note that the price of Milky in Israel compared with similar products in Europe played a role in this protest last fall.

Therefore, if Strauss has reduced the amount of cocoa in Milky to control its costs, it was wrong to conceal it from consumers. But pricing Milky as purportedly a chocolate product in disregard that it contains less or none of its more expensive ingredient, cocoa, is seemingly a grave mistake. Consumers are more dispositioned to perceive a company as unfair when it increases rather than only protects its profits. Strauss claimed that it had changed the labeling more than a year ago (as currently appears on their Milky labels) but it did not dissuade the judge from including the requirement in the compromise agreement.

Truly, Strauss and Milky are not alone in this game. Competing milk delis of chocolate cream are apparently also imitations given that they are labeled as “milk deli in chocolate flavour”. Additionally, a similar charge was made against a popular “chocolate” spread (“Hashachar Haole” — Hebrew for The Rising Dawn) that did not make clear on its packages that it actually had no chocolate in it as defined by standard regulations. It is now described as a “select cream for spreading”, specifying at most the cream is “in chocolate flavour”.

  • Cocoa can also have positive health implications. Research in past years has suggested that cocoa beans carry a benefit for cardiovascular performance where content in their nibs supports the growth of blood vessels, and increases blood circulation, helping to lower blood pressure. Moreover, a recent study (at University of L’Aquila in Italy with Mars Inc., cited in Scientific American) suggests that this is good not only for our heart but also for our brain: a better flow of oxygen to the brain improves cognitive functions. This benefit is attributed to compounds in raw cocoa beans known as flavanols. There is, however, a practical caution for consumers: The level of flavanol in chocolate products could be much lower than in raw cocoa due to food processing methods in use (even for dark chocolate), too little to have the expected effect. That may come as quite a disappointment for chocolate consumers. It is apparent that consumers should not hope for health benefits of this kind in products like Milky or Hashachar Haole.

This affair is a cause for embarrassment to Strauss. First, Milky has been a flagship brand and a source of pride for the company. The affair is hurting the brand of Milky by potentially diminishing the perceived quality of its product. Second, Strauss is now united with Elite, a major chocolate producer in Israel that was once an independent company and these days is a prime brand of Strauss, acting as an endorsing or umbrella brand for multiple product ranges (e.g., chocolate, coffee, candies). Therefore, Strauss management should have known better. It suggests that the two merged companies are still not properly integrated and there is not enough learning and collaboration between their managerial and professional staff. The damage to Strauss is accentuated by the fact that it has been publicly forced through a legal litigation to label its Milky products “in chocolate flavour”.

The takeaway to food manufacturers should be clear: Do not try to deceive consumers and let them believe their products have properties or ingredients they do not actually hold. Sadly, it is neither unusual nor new for companies to hide from consumers the true compositions of their products or any changes made in them over time. Milky could garner more consumer respect and support by describing it as “chocolate flavoured” but at the same time informing consumers of an actual, low yet non-zero proportion of cocoa solids in the product. Just do not try to hide it under the carpet because someone will lift the carpet for the company eventually.

Ron Ventura, Ph.D. (Marketing)

Read Full Post »