OUGD401 - Consumption of brands

After reading a bit of "Bonfire of the Brands" I decided to research on it further and found their website called "Brand-aid". It is basically anti brands and encourages you to be too. 

There is a video named "The Good Consumer" which outlines how to be the perfect consumer, which highlights how wrong this ethic really can be. It is sort of like a instructional video on how to live, it feels like it is from some dystopian future where consuming is all you can do. 

I have also been reading Bonfire of the Brands by Neil Boorman. He burnt all of his branded possessions which added up to £21, 345. He then tried to avoid branding completely for the months that followed.

OUGD401 - Case Study in Chocolate - Own brands vs expensive brands

I decided to do my case study on chocolate. I believe that most chocolate contains the same ingredients yet different branding can make a bar look more luxurious or expensive, making it exclusive and feel like a treat when you buy it. I have to admit though my personal favourite is one of the expensive brands - Lindt. I wondered if people would be able to taste the difference while blindfolded and guess which would be the most and least expensive. 

I bought a range of prices - from 30p to £1.50. In fact the Lindt bar had been reduced from £1.85 and the Milka bar on the far left was half price going from £1 to just 50p (I love Milka so that was a big bonus for me). I also bought the 'luxury' brand from Aldi which was just £1.15 for 125g and the bar is UTZ certified meaning that its ingredients have come from a sustainable farm and the farmers get better pay and quality of life (you can read more about it here).

I started by comparing the ingredients of the bars to see if there was any big difference between them that would effect the quality and taste of the chocolate. 

Ingredients of most expensive brand (Lindt Excellence Extra Creamy) - £1.50 for 100g
Cocoa solids 30% min. Milk solids 20% min.
Sugar, cocoa butter, milk powder, cocoa mass, butterfat, lactose, skimmed milk powder, malt extract (barley), emulsifier (soya lecithin), flavouring (vanilla). 

Ingredients of cheapest brand ( M Savers Milk Chocolate) - 30p for 100g
Cocoa solids 28% min. Milk solids 14% min.
Sugar, cocoa mass, dried whole milk, cocoa butter, emulsifiers (soya lecithin, polyglycerol polyricinoleate), lactose (milk), vanilla extract. 

So, not much difference there apart from the ratios of cocoa solids and milk solids. 

Ingredients of mid brand (Milka Alpine Milk) - £1 for 100g 
Cocoa solids 30% min. Milk solids 18% min.
Sugar, cocoa butter, skimmed milk powder, cocoa mass, whey powder, milk fat, hazelnut paste, emulsifier (soya lecithin), flavouring. (unknown flavouring)

The thing I found interesting about Milka was the addition of hazelnut paste. Also I have found that the more expensive brands seem to add fat, perhaps this adds flavour or adds to the creaminess of the chocolate.

Ingredients of Aldi chocolate (Moser Roth Milk) - £1.15 for 125g
Coca solids 32% min. Milk solids 25% min.
Sugar, Cocoa butter, whole milk powder, cocoa mass, butterfat (milk), emulsifier (soya lecithin), vanilla extract.

The Experiment

I conducted an experiment that involved different brands of chocolate. I wanted to keep which brand was which very secretive so I broke up the chocolate into small pieces and labelled it A, B, C and D. I chose 10 boys and 10 girls. I then asked to come in one by one to taste the chocolates while blindfolded and describe to me how each one tastes. At the end I asked which one of the four they thought would cost the most money.

I found the results really surprising. The majority of the people I asked said that all of the other chocolate bars tasted most expensive a part from the Lindt. In fact, when describing the taste of the Lindt chocolate, a lot of people said it tasted cheap and that it reminded them of easter egg or advent calendar chocolate. If this study were taken at a much larger scale than just 20 people I think the results would be significant. But here, there isn’t enough evidence to prove that people couldn’t tell the value of chocolate.

OUGD401 - The cost of a chocolate bar

Cocoa butter (19%) = 3.4p
Whole milk powder (19%) = 2.8p
Sugar (49%) = 1.4p
Whey powder (2%) = 0.08p
Cocoa liquor (12%) = 1.5p

That adds up to just 9.1p for a 45g bar of chocolate.

Of course, while the price has stayed broadly the same the same over the last few years, the typical size of a chocolate bar has shrunk by as much as 10%. This has been blamed on rising production costs by manufacturers - but what’s the true story?

Given the ingredients of a typical bar only cost 9.1p, they would need to rise by 55% to add just 5p to the cost of a bar (or justify a 10% reduction in size). They haven’t. In the past year they have risen an average of 18% each, Mintec found, adding just 2.6p to the cost of an average bar (once adjusted for quantities).

So if ingredients make up just 9.1p of the cost of a bar, where does the remaining 40.9p go?

Tax

Straight off the top, 10p of your 50p goes to the exchequer in VAT – more than goes into the chocolate.

Shop profit

You can buy chocolate bars for around 43p each from a British wholesaler, making a 7p margin on each bar for the shop.

The manufacturer

A major manufacturer we looked into made about 17% profit on their confectionary sales, on a 50p bar that would be around 7p again. Production of the chocolate bar eats up approximately 4p, distribution at the firm takes up around 9% of sales revenue (so 4p of final price), marketing 20% (9p), while about half the sales price goes on producing the goods sold.

The breakdown for 'posh' chocolate

Of course, if we want something with better chocolate we tend to go to smaller manufacturers – which changes the picture dramatically.

Seed and Bean - a small ethical, organic and fairtrade chocolate brand founded by British entrepreneur Stephen Rudkin – was the only chocolate firm we contacted who was willing to share an exact breakdown of the cost of its chocolate bars.

Here it is:

Retail price for 85g bar: £2.29

Ingredients of a high quality chocolate bar:

• Couverture (the high quality raw chocolate that Seed and Bean turns into chocolate bars): 22% of retail price. Cost: 51p
• Manufacturing and packaging: 6% of retail price.
• Warehousing and shipping: 3.5% of retail price.
• Large national retailers or smaller retailers and their wholesalers’ cut: 42% of retail price.
• Marketing: less than 0.5% of retail price.
• Staff and profit: 9% of retail price.
• VAT: 20% of the total cost price.

Straight away you can see that more of your money is going on the ingredients you’re ultimately eating (22% of the final price rather than 18% for a major firm) and a lot less on marketing.

Couple that with the fact smaller manufacturers don’t get the economies of scale a major manufacturer has and you can see that, while you might pay more for better chocolate, you get more too.

From:

https://uk.finance.yahoo.com/news/the-real-cost-of----a-chocolate-bar-115659540.html

OUGD401 - Tutorial with Richard