Friday, December 7, 2012

How Sweet It Is When Chocolate is Everywhere!


Although the following post was written for my finance blog, most everyone loves chocolate and might find the following article interesting. If you get bored reading, scroll down to the short "I Love Lucy" chocolate scene video. It is a classic. 

It is the holiday season and time for chocolate. Actually any time of the year is chocolate time, but large displays emerge around the winter holidays and beckon us to indulge. The displays change slightly after the New Year when red heart-shaped boxes in honor of Valentine’s Day replace gold square and rectangular gift boxes. Chocolate is definitely one way to many a woman’s heart. Lots of men like chocolate too.

After working in the financial arena for years I adopted the habit of looking for investment opportunities all over. I prefer to invest in products and services I understand.  I also like to invest in things I personally like and believe lots of other people will like and therefore buy; that could turn out very well for investors. Over the years I invested in ice cream (remember Ben and Jerry’s - the independent company?), coffee, natural and organic food stocks, and restaurant stocks. I invest in things other than food, but researching and discovering food stocks is definitely more fun than investigating a lot of other stocks. Where is the fun in machinery or utilities?

Perusing the grocery store this week there was, in the center of the first aisle, in the middle of all the healthy produce displays, a large display of chocolates filled with boxes of expensive and less expensive chocolates, chocolate coins, candy bars and fancy truffles (not the fungus kind – the chocolate kind).

All the chocolate started me thinking and salivating. I could buy a box and feast, but that would cost money and be rather decadent. Or I could research the topic, which is less fattening and guilt-free.

Before I continue, in the interest of complete disclosure (a fancy term in the financial field meaning tell us if you ever owned the company stock, worked for the company, delivered pizza to an executive suite, or had any other contact with the company, or you risk being thrown in a cell next to Bernie Madoff) I need to inform readers that years ago I was a tour guide for a company that transported tourists to Hershey, Pennsylvania. I escorted groups through the Hershey plant (not possible for decades) and related the history of Milton Hershey, company founder, and the Hershey company. I also bought lots of Hershey kisses over the years.

There are a lot of chocolate companies around the world. Many are small, boutique firms producing expensive, wonderful tasting, expensive, organic, expensive, free trade, expensive products. Besides being expensive (forgive the repetition), they are privately held businesses and therefore investors cannot buy stock in the company. Venture capitalists – owned and operated by the 1% we hear so much about – invest in these companies and reap the profits, which in the case of chocolate companies are free chocolates in their offices and homes all the time. Forever. The rest of us have to come up with the green stuff and buy the products.

As a small investor I therefore exclude small, private, boutique manufacturers and settle for buying stock in public companies. But there are not many pure chocolate manufacturers to choose from. Most are large mega-corporations producing a wide variety of other food and non-food products.

After beginning my research I got hungry and have not yet completed an in-depth investigation. But I will, eventually…

Meanwhile, I unearthed the following list of the top ten chocolate manufacturers in the world, and included a few of their chocolate brands. I noted whether the companies are public or privately held, and where they are headquartered if overseas.

1. Kraft (public)
            Cadbury, Toblerone, Milka, Cote d’Or, Freia, Green & Black’s Organic

2. Mars (private)
            M&Ms, Milky Way, Snickers, Twix, 3 Musketeers, American Heritage Chocolate. Remember Wrigley’s? Now Mars and Berkshire Hathaway own Wrigley's jointly

3. Nestle (Switzerland) (public)
            Aero, Toll House chocolate chips, Cailler chocolate bars

4. Ferrero Group (Italy)
            Ferrero Rocher  (FYI – they also own tic tacs and Nutella)

5. Hershey (public)
            Hershey kisses, chocolate bars, Almond Joy, Mounds, Reese’s Peanut Butter Cups, Kit Kat, York Peppermint Patties...

6. Lindt and Sprungli (Germany) (public)
            Lindt and LIndor chocolates

7. August Storck  (Germany) (private)
Werther’s Originals (not chocolate, but who knew who owned them!?), Riesen chocolates and others

8. Yildiz Holdings (Turkey) (private but own a public unit, Ulker Group)
            Godiva

9. Meiji Holdings (Japan) (public)
            Chocorooms, Almond (chocolate coated), Yan Yan (cookie sticks)

10. Arcor Group (Argentina) (private)
            Aquila chocolate bars, Cofler chocolates, Rocklets, Tofi

And in case you are wondering which company produces all those gift-wrapped Russell Stover and Whitman boxed candies available in every drug store in the country – the answer is none of the above. Both brands are made by Russell Stover, a private business based in Kansas City.

For West Coast fans of See’s Candies, headquartered in San Francisco, the company is owned by Berkshire Hathaway. Berkshire Hathaway is a public holding company containing Warren Buffett’s empire.

There are smaller publicly owned chocolate companies, like Rocky Mountain Chocolate Company, but…

I believe this post is long enough. The lesson learned from my research is that well-known brands like Godiva chocolates are NOT lovingly handmade by little old women working in quaint buildings, although we already knew that. The real scene is also not exactly like the I Love Lucy vignette featured below, but it is a great video: 

So on the next Small Business Saturday or any other day, make sure the unique chocolate bar purchased is really from a small concern and not owned by one of the big guys.

Sometimes, however, it is hard to find that information on the packaging. Companies like to retain an aura of small and unique for their brands, making it difficult to discover the real owner. But that is fodder for another article sometime in the future…

3 comments:

  1. Chocolate...mmm. I like Lake Champlain Chocolates, but they are expensive.

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  2. Visited the Champlain Chocolate factory in Burlington one time. Their chocolates are wonderful!

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  3. We have a local chocolate made here in Bellingham, Chocolate Necessities. I LOVE their stuff!

    ReplyDelete