The Future is Customized Chocolate

“Life is like a box of chocolates. You decide what you’re going to get”

Imagine if you could create and design your own chocolate from the comfort of your home?

While this may seem like a distant dream for chocolate lovers, this in fact is already possible. In 2013, a company called Choc Edge created its first 3D chocolate printer and made it available for sale at a $3,200 price point[1]. The Hershey Company, an iconic American chocolate company and one of the largest chocolate manufacturers in the world is already taking some small, yet important steps to incorporate additive manufacturing as part of the company’s operations. In 2014, the company partnered with a leading additive manufacturing company 3D Systems, to produce CocoJet 3D printer that can print uniquely designed candy and showcased it to consumers in 2015 at its headquarters’ exhibits in Pennsylvania[2].

The U.S. chocolate industry though has seen a slow growth of 0.7 percent, with Hershey’s gradually losing market share[3]. Even in a declining market, the products themselves have undergone very minimal changes over the years and remain largely standardized. Customization through additive manufacturing provides an opportunity for Hershey’s to tap into new revenue streams and reverse its financial trends. “The market for 3D printed food is expected to reach $425 million by 2025 and North America is expected to hold the largest share of the market”[4]. Additive manufacturing can be a valuable way for Hershey’s to test a variety of designs, texture and shapes with its consumer’s around the world and use the data to make informed decisions on which products to scale.

Source: www.cnbc.com/2018/04/24/not-just-a-chocolate-company-hershey-plots-its-future-in-snacking.html.

 

Slow Start in the Right Direction

In the short-term, Hershey’s has partnered with the Culinary Institute of America to focus on exploring real-world application. The Hershey’s Chocolate World Attraction which attracts over four million visitors a year to the Hershey’s HQ, the company is also surveying public on their customization preferences after they have interacted with CocoJet 3D[5]. This information is used to gain consumer insights, understand psychological barriers to adoption of 3-D chocolate printing and explore opportunities for co-creation[6]. In the medium-term, the company’s strategy is still unclear. While 3-D printing brings efficiency to customization, much of the chocolate Hershey’s makes is standardized and mass produced. At its current price and technological capacity, 3-D printers cannot provide the same economies of scale that traditional machines do.

A World Where a Chocolate is More Than Just a Chocolate

While consumer’s may be reluctant to experiment with customized food on staple products, there is an opportunity to do so for ‘fun’ categories like chocolates that are likely to be buys for special occasions like birthdays and anniversaries.

As one of the first mover’s and leaders in the 3-D chocolate printing space, Hershey’s has the ability to move up towards the high-end chocolate segment and compete with brands such as Godiva. To do so, Hershey’s should seriously consider investing in store fronts in upscale areas and installing the CocoJet 3D technology to its stores. The ability to customize would be a value add for the customer’s and in return would also provide the company with important data around customer preference.  In the short-term it would help Hershey’s compete with the high-end chocolate brands. In the long term it would allow Hershey’s to continue to stay competitive since eventually, customer’s buying chocolate to gift to their children or significant other’s may see the ability to customize as a necessity, instead of a luxury. Additionally, additive manufacturing also provides a way for Hershey’s to diversify into snack food, a strategy that the company has been trying dating back to its inception, but has largely failed[7]. Imagine if stores with Hershey’s printing machine could make bite size chocolate snacks in customized designs and sizes? In addition to getting customer engagement, a ‘customized’ strategy would position Hershey’s as an innovative brand, instead of the age-old monolith that it is often seen as.

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Moving forward, should Hershey’s invest more heavily in 3-D printing? More broadly, what possible challenges do you think the food industry faces to adopt 3-D printing more widely? Is customization the new future or do we still need some degree of standardization?

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[1] Goulding, Charles. “R&D Aspects of 3D Printing Chocolate.” 3DPrint.Com | The Voice of 3D Printing / Additive Manufacturing, 17 May 2018, 3dprint.com/213896/rd-3d-printing-chocolate/.

[2] Buhr, Sarah. “Hershey’s Chocolate 3D Printer Whips Up Any Sweet Design You Want.” TechCrunch, TechCrunch, 16 Sept. 2015, techcrunch.com/2015/09/16/likeachocolateselfie/.

[3] Hirsch, Lauren. “After 124 Years, Hershey Tries to Be More than Just a Chocolate Company (Again).” CNBC, CNBC, 24 Apr. 2018, www.cnbc.com/2018/04/24/not-just-a-chocolate-company-hershey-plots-its-future-in-snacking.html.

[4] Orosz, Caitlin. “The Future of Food Manufacturing: 3D Printing.” Blacksmith Applications, 9 July 2018, blacksmithapplications.com/future-of-food-manufacturing-3dprinting/.

[5] Eagle, Jenny. “Hershey Continues to Explore the Possibilities of 3D Printing.” Confectionerynews.com, William Reed Business Media Ltd., 4 Dec. 2017, www.confectionerynews.com/Article/2017/12/04/Hershey-continues-to-explore-the-possibilities-of-3D-printing.

[6] CSP Daily News. “Can 3D Printing Replace the C-Store?” CSP Daily News, CSP Daily News, 30 Oct. 2018, www.cspdailynews.com/snacks-candy/can-3d-printing-replace-c-store.

[7] Hirsch, Lauren. “After 124 Years, Hershey Tries to Be More than Just a Chocolate Company (Again).” CNBC, CNBC, 24 Apr. 2018, www.cnbc.com/2018/04/24/not-just-a-chocolate-company-hershey-plots-its-future-in-snacking.html.

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9 thoughts on “The Future is Customized Chocolate

  1. 3D printing offers exciting opportunities for Hershey to offer new customized products. As consumers increasingly demand products that fit their specific needs and desires, a company like Hershey that can provide chocolates exactly tailored to a consumer. As the author points out, there has been little innovation in product design among chocolate-makers. 3D printing is a chance to differentiate chocolate, introduce new products, and even make the chocolate buying process an experience. Given that chocolates are often given as a gift and represent a special occasion, 3D printing, especially in Hershey retail locations, could generate a lot of interest among customers who are buying for an occasion. Imagine giving someone a box of chocolates that you created with all of their favorite flavors. Since Hershey has been losing market share, 3D printing seems like a great way to generate interest in the brand and compete against other companies like Godiva and Lindt chocolate. The challenges that Hershey might face is that it is positioned as a mass-market brand and not a premium brand. How much will consumers be willing to pay for Hershey chocolate made on a 3D printer, even if it is customized? It’s possible that this innovation may be better suited to premium chocolate brands like Godiva or even specialty chocolatiers like Theo or Taza. Overall, despite possible challenges, 3D printing seems like a way to create innovative chocolate that will respond to consumer trends towards more customizable experiences and products.

  2. A 100+ year old chocolate company isn’t generally someone you would think would try to be on the cusp of innovation and product development. I think the cost effectiveness will be the big decision maker as to whether or not 3D printing eventually becomes the “new normal” for chocolate, or whether it will just be a fad. While generally I would argue that most consumer products are headed towards more customization, I feel that the majority of chocolate eaters view it as more of a commodity, and would likely be unwilling to pay much more for a highly specialized piece of chocolate. We’ll see what happens!

  3. I am curious, in a similar manner as Mike’s comment” that whether 3D printing for chocolate (food in general) will just be a fad or will it become the “new normal”. While it is entirely obvious that the food industry is headed towards more customization, I wonder if such customization is simply in the appearance and physical aspect of the final product or is it also within the taste and ingredients used. On the subject of “luxury”, similar to watches, I perceive hand-crafted goods by a skilled artist as a luxury and am willing to pay a premium for it but what happens when it is made simply by a machine? Will that actually give chocolate makers a competitive advantage?

  4. Delightful application of 3D printing! I question if additive manufacturing will be enough to lift the Hershey brand from a mass-market product to be on par with upscale chocolatiers like Godiva. I wonder if developing a separate, higher end sub brand with a tweaked underlying recipe might assist in positioning the 3D printed product as more artisanal and luxury. Expanding on your recommendation to expand storefronts, I think online ordering could be a key avenue for growth for Hershey in this endeavor as well. It would be extremely exciting to upload a digital file to the Hershey website and have a corresponding chocolate sculpture created and sent to a loved one. That said, is one of the major draws of 3D printing chocolate the ability to see the product printed before your eyes?

  5. What a bittersweet application of 3D printing! Thanks for writing. Like Mike, Al and SHo’s comments above, my sense is positioning 3D printing as artisanal to luxury consumers especially in the US and Europe may be tough given the premium accorded to handcrafted chocolates. I am also in line with SHo’s comment that the attraction behind watching a machine print chocolate in front of you may be a short-lived fad, and online delivery may be a better idea.
    One other idea is Hershey’s could use this brand to re-position itself in geographies where it does not have a strongly entrenched brand positioning. For example, in India Zara and H&M are seen as much more high end brands (accessible luxury that celebrities wear and endorse) than the fast fashion brands they are seen as in the US. Perhaps if they opened Hershey’s stores in South East Asia with these 3D printing machines it would add to the novelty factor there?

  6. Interesting topic! I do not think the slow growth of the chocolate industry can be fully reversed through 3-D chocolate customization. Instead, I believe this trend speaks to an increasingly health-conscious society. It’s interesting to see Hershey’s expand into meat bars “as more consumers pore over food labels to find healthier, protein-packed snacks” (https://qz.com/665148/as-americans-eat-less-chocolate-hersheys-begins-pushing-meat-bars/). 3-D chocolate printing is a nice-to-have niche product offering for Hershey’s, but they should not invest too much in a declining chocolate category.

  7. Interesting read. However, I do not think the company should invest further in 3D printing. I do not believe customization is the way to go for this industry because you will have innumerable SKUs. It will be very difficult to profitably scale this offering. I would invest in creating new flavors and more health focused variants of chocolates. In summary, I think we need standardization but can broaden the broaden range to differentiate against competitors.

  8. I had similar thoughts to some of the above comments. This strikes me as mainly a gifting opportunity, or as a flashy retail stunt. Unfortunately for Hershey, they are definitely not the go-to chocolate for a nice gift, so I think they would have to put in a lot of marketing effort to promote this premium experience. People frequently associate luxury chocolates with being hand-made, but I could imagine that watching this being done in store could at least be cool enough to get someone to go visit the store and buy once. I’m not sure it’ll be Hershey’s next big cash cow, though.
    This did, however, get me thinking about how cool it will be once 3D printers become a household item and we can just download the Hershey, Godiva, Cote D’Or etc recipe and print it from our home.. yummy.

  9. Very interesting article. Similar to the note above, I don’t think that consumers are ready for 3D printing when it comes to edible goods. If Hershey’s is trying to make this a competitive advantage for their company, they may fail because people may not trust a machine creating their chocolate. I would recommend shelfing this idea and go back to the basics.

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