Originally published: May 26, 2018
Take a look at the following lists of ingredients. They are for two confectionaries available for purchase today.
Contains 2% or less of:
With just 5 ingredients Product B stands out as my preference (even if the ingredients were non-organic). The ingredients are familiar and have nutritional value. I cannot say the same for the Product A ingredients.
Product A is the famous Reese's Peanut Butter Cups. One of the most popular chocolate confectionaries in the US. Product B is the Coconut Butter Cups created by EatingEvolved. Reese's are essentially artificially flavored sugar that provide no nutritional value - even worse they aren't even empty calories, they are bad calories.
Yet why do they remain such a popular snack?
One factor is taste. Reese's taste good. Or at least people that haven't experienced an alternative think they do. But do they really? Do people truly prefer the taste of Reese's, or just the idea of it? If you give people two options: Reese's with it's current ingredients versus an alternative with two ingredients: raw chocolate and peanut butter, which one would win? Would people really prefer the taste of artificial color, corn syrup, dextrose and partially defatted peanuts?
Eating a blend of raw chocolate and peanut butter is delicious. It's a rich, sweet, and savory combination. But Reese's only delivers on this idea through marketing and product presentation. The actual product is an imposter. It's a concoction of artificial ingredients that are a farcry from the nutritional value and taste of raw chocolate and peanut butter. And for people that don't know an alternative, they believe it. They believe that Reese's is what peanut butter and chocolate is supposed to taste like.
And people know it's bad for you. Candy is bad for you is an axiom. Yet it's not the label "candy" that makes the product bad for you, the ingredients are the culprits. Raw chocolate and peanut butter has nutritional value. Partially hydrogenated vegetable oil and corn syrup does not. Natural ingredients versus lab processed.
Funny enough prior to writing the above paragraph I had not seen the headline EatingEvolved has on their site:
Chocolate: It's food, not candy.
I'd be curious to run a blind taste test to see if consumers prefer the taste of Reese's or Coconut Butter Cups. Ideally it would be people that have never tried either product. My hunch is Coconut Butter Cups would win easily. From my perspective they just taste better - much richer and creamier. And although this would bias the results, if you also told people that one of the products was actually good for you, the results would certainly skew towards the Coconut Butter Cups.
Another reason for the popularity of Reese's is cost. Reese's retail price is about $0.78. Coconut Butter Cups are $2.99. If you have two kids it's a difference of spending $2 versus $6 for a snack. For the majority of Americans falling into middle or lower income classes that difference is significant. The Hershey Company is able to exploit it's advantages as a corporation by minimizing the cost of ingredients which allow it to keep retail prices low. In "fairness" to them, as a publicly traded company they have a fiduciary duty to do this.
Another factor is distribution. You can get Reese's everywhere. The local department or grocery store, kiosk, movie theater or vending machine make Reese's widely available. You can even splurge on a Costco King Size bulk package (that's a lot of Partially Defatted Peanuts and Carnauba Wax!).
Add in brand recognition and marketing to low cost and distribution, and you have a ubiquitous product. According to The Hershey Company 2016 annual 10-k report they spent 60% (about $2 billion) of their gross profit on Selling, marketing and administrative expenses. For a company with already well-recognized brands (Hershey's Chocolate, Reese's) they are only increasing their advantage by investing heavily into instilling within us the desire for their products.
And so how does a company like EatingEvolved compete? Compared to the competition their product is expensive, has limited distribution and is an unknown brand. A classic David vs Goliath situation.
Some inspiration can be drawn from the automaker Tesla. Tesla launched it's first model, the expensive Roadster in 2008. At the time the electric car market was dire. Gas prices were surging and the economy was about to enter a recession. EatingEvolved is facing a parallel environment. They have an expensive product at a time when the health of Americans is deteriorating and obesity is at an all time high.
Elon Musk has often said that his goal with Tesla was never to "win" the auto market, it was to bring resurgence to the electric car. To put the pressure on other automakers to step up their game. Look no further than the announcement General Motors made regarding going all electric. This would not have happened this soon had it not been for Tesla.
Furthermore, the Tesla master plan outlined a roadmap that started with a low volume expensive car that would finance a medium volume car at a lower price, and ultimately finance an affordable high volume electric car (model 3). This could be the roadmap for EatingEvolved to adopt.
And thus with it's Coconut Butter Cups EatingEvolved may start catching the attention of The Hershey Company. As consumers get smarter about what they eat they will start to seek out alternatives to the processed products being pushed to them. As "aware" Gen X and Millenials start having kids they will raise their children with a greater emphasis on healthier alternatives and awareness about what they eat. Gone will be the generation that grows up snacking on Reese's because that's all they know. The path for EatingEvolved will not be easy, but it's necessary.
And as they say on their site, Chocolate: It's food, not candy.