Barry Callebaut innovates chocolate
A few days back, our newspaper caught ten of them standing around two chocolate bunny rabbits as they watched with childlike glee how one melted under an infrared lamp at 38°C and their one didn't.
But what looks like a scene from Sesame Street is really big business for the world's largest manufacturer of cocoa and chocolate products. The Zurich-based group already makes a third of its €5bn annual sales in threshold economies and wants to boost business with them.
But when you market a product which is supposed to dissolve in the mouth, it is hardly suitable for most shop windows in Africa, Latin America or Asia. So thermo-tolerant chocolate could be the intriguing answer.
Heat-resistant bunnies are, however, just one of the lines that Barry Callebaut has been able to create with unique functionalities. Although the company is loath to specify annual R&D spend, innovation is clearly a strategic enabler for future growth. In fact, an astonishing 70 per cent of all revenues are generated by products that have only been developed over the last five years.
This enables the historic company to serve the entire food industry from industrial food manufacturers, such as Unilever, Mondelez or Hershey's, to artisanal and professional users of chocolate, including chocolatiers, pastry chefs, bakers, hotels, restaurants or caterers. Barry Callebaut offers these so-called "Gourmet customers" two global brands: "Callebaut" and "Cacao Barry".
These include 18 "Chocolate Academies" with kitchens and libraries; twelve "Application Centers", providing small-scale production processes for finished products; and 19 pilot plants or mini-factories, where chocolate and/or cocoa can be produced on lab scale.
The overall aim of this massive infrastructure is to "help customers grow their business through differentiation while meeting the needs of today's consumers who increasingly demand healthy products that taste good and delight the senses."
"With over 10,000 bioactive components, three-quarters of which have yet to be decoded, it is one of the most complex food products," explains Gino Vrancken, Program Manager Cocoa Science.
Inevitably, Barry Callebaut also has to address a growing catalogue of consumer concerns, which means understanding trends and implementing market insights. Consumers are increasingly scrutinising food products with "less trust, more fear". "They are looking for clean, clear, responsible chocolate," summarises Boone.
Nature is for them a source of inspiration, so they also want to smell, hear, feel and taste the "real world". Brands must therefore live up to these standards in order to (re)gain consumer trust. The product has to be 100 per cent natural and created in a sustainable way across the whole value chain from farm to consumer.
At the same time, consumers have a growing awareness of nutrition. Barry Callebaut therefore offers those with food intolerances or allergies a full range of lactose-, nut- and gluten-free products without artificial additives (flavours, colours, sweeteners) or lecithin.
The world's main problem, however, is "over-nutrition", and "globesity" has become a severe health threat. Nearly one in three people are now overweight or obese, and this could rise to one in two by 2030. Obesity is already responsible for 5 per cent of deaths. As governments plan preventative action, including sugar taxes and advertising restrictions, Barry Callebaut's answer is "reformulation and clear & clean labelling".
The next generation of mass consumers clearly has also a more holistic view of health and will balance between FOMO (fear of missing out) and "mindfulness". Millennials strive to actively enjoy life and are searching for brands that satisfy their "taste for life". Food for them needs to be both tasty and good.
In product terms this means tasty, fresh, natural and simple chocolate with a better nutritional profile.
Meanwhile, "healthy agers" are also looking for nutritional brands and products to satisfy healthier lifestyle choices. This means taste-enhanced chocolate with added nutritional benefits such as rich in protein, fibres and flavanols.
Last but not least, chocolate must also satisfy a broad range of multi-sensorial experiences and offer increasing personalisation in terms of texture, colour, shape and flavour. In a new world where "make it mine" will drive brand preference, food sensations in "my chocolate" need to meet a consumer's individual personality.
Squaring the circle
So the ideal chocolate would be lactose-, dairy- and sugar-free as well as light in calories and high in proteins. It would also be fibre and calcium-enriched, with plenty of cocoa flavanols to promote cardio-vascular health. Meeting this extremely demanding profile at an acceptable price, without compromising the taste of what is, after all, an indulgent product, poses a number of reformulation challenges.
The main problem is that fat and sugar are key ingredients. Fat in the form of cocoa butter and milk fat provides texture/snap, gloss, and smoothness. It is also important for flavour release, and current EU chocolate legislation stipulates a minimum fat content.
Industry attempts to replace sugar with sweeteners like polyols have not always been crowned with success as these can have a laxative effect. Many manufacturers understandably then look to stevia as a wonder weapon.
But stevia is 300 times sweeter than sugar, which means that dietary fibres etc. have to be used to compensate an equivalent loss in bulk. Barry Callebaut has responded by developing a range of products with no side effects, including sugar-reduced chocolate sweetened with fruit sugars etc.
Despite the many obstacles to progress, Barry Callebaut aims to earn its "health halo" by reformulating in a nutritious, sustainable way that will optimize product composition and the calories-energy balance of its products.
One of the goals for 2020 is to halve the current calories in its confectionery to 275kcal/100g by reducing sugar and fat. This means active projects to create healthy cocoa and chocolate applications including beverages; smarter ways to add sweetness to chocolate compounds; and water-based fillings which will reduce fat, saturated fats and calories.
Meanwhile, the group is looking across the value chain for ways to improve existing processes or to create new processes and technologies to make cocoa, chocolate and related products in a more cost-effective way, while preserving intrinsically healthy ingredients.
Currently, Barry Callebaut is able to preserve up to 80 per cent of the naturally present cocoa flavanols that are destroyed in conventional chocolate-making processes. It is also looking into the treatment of products, and current projects include controlled fermentation to realize the full flavour potential of the bean, cocoa butter content optimization, and alkalized cocoa butter valorisation.
So to prevent enrobed and filled chocolates from blooming too quickly, the group has developed a "cocoa barrier" that is placed between the filling and the inside of the outer-chocolate layer. This protection prevents chocolate products from blooming for up to one year.
But the wonders of the day were still not quite over. As a tour de force, visitors were invited to witness the world's first chocolate 2D printer. To date, the problem has been getting a low enough viscosity in the chocolate for it to be sprayed at high pressure through a nozzle, but high enough for it to keep shape when the droplets land on a heated production line.
At the so-called "Application Center" in Wieze, Barry Callebaut's R&D team presented a software design programme which allows users to print virtually any decoration in chocolate. In anticipation of the "make it mine" generation, Barry Callebaut calls this process: "Getting new personalities out of the chocolate".
Chocolatiers have more fun
During this he narrated an anecdote from his private life: "When bankers or dentists say what they do for a living, they often get a frown, but when I tell people I'm a chocolatier, I nearly always get a smile!" Now one wonders why…
"Chocolate is taste!"
Just throwing money at R&D doesn't guarantee an innovation culture or automatically increase ROI. It is important to focus on a few things you really believe in and then to get everyone's nose turned in the same direction.
Our R&D arm is already quite efficiently organized, but the key to success on the innovation front is more about excellence in execution than organisation for organisation's sake.
How can you achieve excellence in execution?
I spend a lot of my time engaging other disciplines within the business in order to get them on board.
Obviously, this means mobilising our CEO and Regional Presidents etc., but this particularly applies to the marketing function because, regardless of whether our customers are in ice cream or bakery, the best innovation can be totally irrelevant if you don't thoroughly understand their needs and strategies.
Also I want our sales people on, for instance, the streets of Chicago to really believe in our new product stories so that they can effectively sell them to their contacts.
What role does individual creativity play within R&D?
Innovation is not so much about a skill one can capture with one person or in a small team. You need to create a stimulating context that facilitates the right kind of creativity. In our business there is no lack of ideas; in fact there are too many! The real challenge is to rigorously select the big bets and to execute them with passion into the market.
So creativity is only around 15 or 20 per cent of the job, the rest and most significant part is execution.
Where do you see the optimal balance between the research you do internally and that commissioned externally?
Obviously we partner with institutions, such as the Jacobs University in Bremen, and we now have an excellent network at university level. I believe that academia is the right place for fundamental research as there is far too much speed and nervous energy here in Wieze.
Also I strongly believe that the capacity of an organization to absorb outside knowledge grows over time as the expertise of individual staff increases. So I would say that the current balance is 50:50, but I would like to increase external research to around 70 per cent.
You worked for Unilever for many years. How would you compare innovating for a brand manufacturer and a B2B player like Barry Callebaut?
Our job is more difficult because at Unilever you decide when you want to enter a market with, say, a new ice cream. In our case we always have to listen very carefully to what the customer says because it is their brand and their marketing strategy.
Our role is to ensure that we are flexible enough to respond quickly to their needs because we are often involved at a relatively late stage in the decision-making process.
Customers are notorious for wanting everything at once. Does it ever feel like Mission Impossible?
Yes, quite frequently! The trick, however, is to get the brief right straight from the start and for us to understand what is really critical for the brand success of our customers.
What benefits can you bring to the creative process?
We could talk endlessly about the many benefits we are able to bring in product design, health etc., but, if you really want to get me excited, you should ask me about taste because there is so much beauty in our product, and we could do so much more in this field.
How then could you enhance the taste of your products?
There are so many ways to release more taste! Take, for instance, the Ecuadorian cocoa bean, which is generally regarded as fine-flavoured because it is so flowery and fruity. Somewhere along the production process we have partially lost its taste.
Are we critical enough when we select the beans for processing and only choosing the bigger beans that are more flowery and tastier? Are we really protecting their flowery notes in our type of roasting cycle? Is it necessary to conche for this kind of chocolate? The answer to these questions is no.
We can also positively influence taste via the fermentation process done in three or four days on the farm. So there is still a lot of hidden taste in the bean that we need to extract for the consumer.
But aren't we living in a "tasteless" age of mass consumer products?
I agree that our society often sacrifices taste in mass production. But, if you want to lead as a company, it is not enough to focus on the industrial side. In our business you should also never lose the gourmet side. After all, any chef or chocolatier doesn't care whether Barry Callebaut is big or small, he or she just wants to have the best possible product from us.
If chocolate is about one thing, it is taste!
But doesn't taste come at considerable extra cost?
No one will admit it publicly, but probably around 50 per cent of the effort our industry puts into R&D is focussed towards cost reduction and making products cheaper. To be honest, I would prefer to work on taste because this is my real passion, but I do understand the realities of the market.
How can you get the industry away from its current emphasis on cost?I learned in my previous marketing career that one shouldn't put too much emphasis on the words "either…or". So it should never be about either lower cost or a benefit. Instead, we should say: "and…and…and". Therefore, every new solution we put on the table ought to be tastier, healthier, more sustainable and cheaper.
Putting this into the customer brief right from the start may daunt some people, but it will also release a lot of creativity en route to market.