chocolate maker


 Recession or Depression?

Most of us remember the recent recessions: the Asian financial crisis of 1997/1998, the recession caused by the bubble in 2001, and the house market crash of 2007/2008.

There was always a great panic, economies stagnated, doom scenarios dominated the political landscape, but most economies bounced back after a short period. And over time, the stock markets flourished again as if nothing had happened.

But none of us remember a true economic depression and its devastating effects which can span across 1 or 2 decades. Not surprising, because in the past two hundred years there have been ‘only’ two depressions: the ‘long depression’ from 1873 to 1896, and the ‘great depression’ from 1929 to 1939.

No more depressions? Keep on dreaming. More and more fundamental and technical analysts are convinced that the third devastating depression will hit between now and 2023.

Not all sectors hit

The two depressions of the past two centuries had not only a devastating economic impact but also a social one. Unemployment rose to unprecedented heights; homelessness increased; housing prices plummeted; international trade collapsed, and deflation soared.

Not only many banks but also a frighteningly large number of companies lost out.

But companies from some sectors were able to survive. Healthcare, consumer staples, basic transportation and food were examples of relatively inelastic industries that performed with resilience during the Great Depression and recent recessions. So how about chocolate makers?

How did chocolate perform in previous recessions and depressions?

There is little to tell about chocolate during the Long Depression. Simply because of a lack of data. We know that the first chocolate bar had already been made in Great Britain, around three decades earlier by Joseph Fry and John Cadbury.

But the world had to wait until the 1880s for milk chocolate to be launched as a commercial product; this time in Switzerland by Henri Nestle and Daniel Peter. Maybe it was a sign on the wall and an illustration of chocolate performances during economic downturns that milk chocolate appeared in the middle of the Long Depression.

There is more to say about chocolate during the Great Depression. By that time, the USA was already under the spell of the famous Hershey chocolate bars. Milton Hershey had even had an entire village built around his factory where workers could live cheaply. 4

This town of Hershey stood in sharp contrast to much of the United States during the Great Depression years. While most industries struggled to keep from shutting down, throughout the Depression Mr. Hershey’s affordable chocolate products enabled his company to enjoy sustainable sales and profits. His chocolate did well, very well, when many other companies went bankrupt.

Milton Hershey had even had an entire village built around his factory where workers could live cheaply.

Signs of a thriving chocolate industry were also seen in the more recent economic recessions.

Josiane Kremer, a spokesperson for Barry Callebaut, summed it up well 1  “People eat chocolate in good times to celebrate and in hard times to feel better.”

Marcia Mogelonsky, global food analyst at Mintel 2 concluded during the last recession of 2009: “It’s clear that despite economic trouble, the world’s chocolate lovers don’t deviate from their favorite treat. Chocolate is a small, affordable indulgence for shoppers who are cutting back on spending elsewhere. Even in countries not known for chocolate consumption, sales are on the rise.”

How to prepare as a chocolate maker?

Although chocolate products apparently do not really end up in the danger zone in economically bad times, it is wise as a chocolate maker to prepare yourself for any financial setbacks. There are in fact three focal points with which you can successfully guide your company through an economic downturn.

1. Focus more on Asian consumer markets

A rapidly growing middle class is emerging almost everywhere in Asia. Not only in China but also in India and South-East Asia. The Asian consumer is also appreciating chocolate products more and more. But the average Asian taste is quite different from the Western one.

Bitter, dark chocolate seems to do less well. while a mix of sweet and salty seems to work better. Also – for Westerners – ‘exotic’ ingredients such as Durian and Indian spices are causing a furore in Asian chocolate products.

Chocolate makers who also keep a closer eye on Asian consumer tastes, next to the Western consumer palate, will be able to fight through a coming economic depression much more vigorously.

2. Focus on health

During the Great Depression, sugary confections were marketed with great success 3 as a healthy and inexpensive source of nourishment. Of course, in these times the focus should no longer be on sugar levels (although perhaps on ‘healthier’ sugar alternatives such as coconut sugar and other palm sugars).

But you could for instance shift the focus to one of the most promising ingredients of cocoa and chocolate: the polyphenols 6. Cocoa polyphenols have a very strong effect on blood flow. But also don’t rule out the very strong antioxidant properties of cocoa polyphenols. A great example are the effects of polyphenols on the prevention of colon cancer.

3. Promote your chocolate as affordable luxury

“Chocolate may very well be recession-proof — it’s just a matter of how much consumers want to pay for it,” said Krista Faron, senior analyst at Mintel, a market-research company, in Chicago. 5

Price is key. Do not price your chocolate too cheaply, because that undermines the consumer’s belief that your chocolate products are more or less a healthy product. But don’t price them too expensive either, because then the consumer will opt for cheaper alternatives from competitors. Your products must be seen as luxury goods which are still affordable.

Chocolate may very well be recession-proof — it’s just a matter of how much consumers want to pay for it

Krista Faron, senior analyst at Mintel


Whether it’s going to be a recession or a depression, one thing remains certain: the economic trees will never grow to the sky. Everything goes in cycles. What goes up, must come down. But those chocolate makers who prepare well for worse economic times, and heed the above three pieces of advice, may find themselves performing better than ever.

Written by Stefan Struik, founder of Kamkav Farm in Cambodia. Featured photo by Sergio D’Afflitto.







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