These specialty producers became hot by creating items that fit the consumer’s schema of a premium, indulgent product and doing so in the face of constantly evolving ideas of what premium and indulgent mean.
The fundamentals remain unchanged, with rarity (think truffles) and exoticism (think açaí) still prized. As Julie Snarsky, manager of culinary and foodservice, David Michael, notes: “How many people have prosciutto in their refrigerator? How many have smoked chicken? These are things you generally don’t keep in your refrigerator.” So, she notes, buying such products is an indulgence.
When rarity and exoticism come up against supply and demand, the price point where they meet often qualifies an item as indulgent. Notes Anh Nguy, development research chef, David Michael, “To me, if I want to experience indulgence, first I consider that something indulgent has got to be expensive, so it does have to do with cost, with price.” Beyond that, she adds, “it has to remind me of something. Whether that’s feeling good or memories from childhood, it has to appeal to those senses.” For Southeast Asian expatriates like her, that may mean “eating tropical fruits that we can’t get here in the States,” she says. Edible indulgence, by playing to emotions that don’t stop at the tastes buds, lets us escape to other places.
“People’s lives are extremely busy, and there are certain experiences that help you escape that, even just momentarily,” Galvin says. Take the “wine-country lifestyle,” which, he says, “as an idyllic concept, has taken off. All you have to do is go up to St. Helena or any of the other wine-country towns in the summer and look around. So if my soft drink can contribute to that feeling, even when you’re not in Sonoma County or Napa Valley or other parts of the California wine country, that would be terrific.”
A sense of place
Consumers also want to know the source of their food and drink, and Galvin takes pride in being able “to tell them the specific area that the juice in this soda comes from.” These days, a sense of place can automatically raise a product or ingredient’s cachet.
“We’re certainly seeing a lot of call-out of place of origin everywhere, from white-tablecloth menus to packaged foods in the supermarket,” says Joy Blakeslee, culinary manager, Hazelnut Council, pointing out that Trader Joe’s crostini highlights the Turkish origin of the sun-dried figs and hazelnuts. The council conducted a national consumer-research study to gauge interest in nuts’ places of origin. “We found that 64% of the consumers in the study were interested in knowing the origin of where their nuts come from,” she says.
Does all this talk of terroir reflect a real difference in an ingredient? In the case of chocolate— one of the public’s more-keenly traced indulgences—Rose says it does, at least for the bean, with “a marked difference between, for instance, Indonesian beans, African beans and South American beans.” For example, Barry Callebaut literature praises its Java-sourced milk chocolate’s “explicit flavors of sweet caramel and biscuits,” while its 70.1%-cocoa product from Ecuador has “top notes of red fruits, dried grasses, and tropical flowers.” However, a chocolate bar uses blended beans, not unlike “an off-the-shelf supermarket coffee. That’s why Hershey’s chocolate always tastes like Hershey’s chocolate,” he says.
Nevertheless, geographic distinction “does add value,” Rose acknowledges. “So we as manufacturers can sell an origin chocolate, because of its rarity, a bit more expensively.” And single-plantation chocolate “pushes origin one step further,” he says. “You have very small crops, and very small amounts of chocolate can be produced from this one plantation. But as soon as we’re talking about origins and plantations, the added value weeds out most of the confectioners anyway.”
Increasingly relevant to curious chocophiles is the specific cacao-bean strain: forastero, trinitario or criollo. “The forastero represents about 70% of the world crop,” Rose explains. “So, most chocolates everywhere in the world have some forastero. But then you have the criollo, which has a connotation of being the best cocoa. Criollo has these fruity notes, these acidic tones; it has winey flavors. But at only 5% of world crop, criollo is almost so insignificant that we as a manufacturer can’t rely on that 5% alone. So, for most manufacturers, criollo is used for flavor enhancement—we put a bit of criollo here, a bit there, and it enhances the profile. It makes it more exclusive and more expensive.”
Less is more
With the tab for some high-end chocolates running to hundreds of dollars per pound, it gives one pause when contemplating a second or third bonbon. Those steep prices—coupled with widening waistlines and an appreciation for discreet indulgence —have led the modern luxury hunter largely to abandon equating indulgence with extrajumbo, chocorrific decadence.
When Greenwood wants something as a treat, he likes “to spend my calories wisely, and I think that consumers across the board are saying, ‘I’m OK with having some butterfat, some sugar, some calories. But when I spend those calories, I want to spend them wisely,’ too.”
Michelle Peterman, vice president, marketing, Kettle Foods, Inc., Salem, OR, reads into the trend what she calls a “debit-credit” dynamic. “Americans are adopting a more-pragmatic approach to a balanced diet,” she says. “Deploying a ‘debit-credit’ approach, they recognize that they can enjoy everyday indulgences within reason and still achieve health goals.”
That’s not to suggest that luxury is going dietetic. “When someone says to me, ‘Create something indulgent,’” Snarsky points out, “I still bring out the butter and cream.” By focusing on distinctive, high-quality ingredients with a recognizable premium, everyday indulgences may actually promote dietary restraint by yielding more ounce-per-ounce satisfaction. According to the report “Masstige & Super-Premium Consumers: Attitudes and Buying Habits” from Datamonitor, New York, the “mass-marketing paradigm … favors over-consumption leading to social health problems. Consumers want a reduced quantity of products with a greater accent on quality.”
Those consumers often define quality as simplicity and transparency in labeling. At a time when high-fructose corn syrup and hydrogenated fats are increasingly unwelcome, indulgent foods distinguish themselves as much by the ingredients they don’t carry as those they do. “It’s the absence of negative that elevates it,” Galvin says. As for his own soda, the ingredients remain simple: “made with pure varietal juice, carbonated water, no high-fructose corn syrup, and a hint of natural flavor,” he says. “It’s meant to be very simple, and yet what elevates it is the quality of the Chardonnay and Pinot Noir juices that go into it.”
Peterman feels the same about the Russet Burbank potatoes that go into her company’s chips. “As consumers become more health aware, they place higher value on food made from real ingredients, all natural, and with no fake ‘stuff’ added to the process,” she says. In addition to electing for Russets over the chipping stock most manufacturers use, she says, “we’ve been trans-fat free since day one and use only nonhydrogenated safflower and sunflower oils.”
Sustaining indulgence
The ability of everyday indulgences to sustain popularity against standard-issue snacks has some manufacturers hesitant to dive into the category. But to listen to those already knee-deep in it, the water’s just fine. “Our sales are growing by leaps and bounds—over 20% for five or six years in a row now,” says Allen Rupp, corporate chef, purchaser, and research and development director, Woodland Foods Ltd., Gurnee, IL, which supplies a gallery of specialty wild and cultivated mushrooms, including porcini, portobellos, chanterelles and morels, among other ingredients. “Our products have always been an item on white-tablecloth restaurants,” he says. “And there is an extreme demand for them.”
Such demand touches every corner of the specialty market, with premium-chocolate sales rising 28% from 2003 to 2005, even as overall category sales grew at a meager 1% to 3% for the past 20 years, according to Chicago-based Mintel. “Newage” beverages, which comprises natural and specialty soft drinks, teas and juices, have also grown from $4.3 billion in 2001 to $11.6 billion in 2004, per the Beverage Marketing Corporation, New York. “So it almost tripled in three years,” Galvin says—and that’s at a time when traditional soda sales have either gone flat or declined.
It makes sense, then, that Packaged Facts, Rockville, MD, found nearly 20% of American adults calling themselves “gourmet” consumers—loosely defined as “adults who seek to eat gourmet food whenever they can.” Says Galvin: “I think that it’s a big market—a bigger market than some people realize. And it’s not just about demographics. It’s about mindset. When you’re talking about sodas at the $2.50 or $3.00 price point, most people, if they’re interested in rewarding themselves with something a little more indulgent, can justify that.” They do so even—perhaps especially—during recessions, since, in those times, chichi food is just about the only indulgence they can afford.
Of course, even the luxury consumer has limits, shelling out for the novelty of truffled organic popcorn, perhaps, but vetoing premium ketchup. (In 2004, New Yorker staff writer Malcolm Gladwell—no stranger to the food industry—engagingly explored ketchup’s repeated refusal to go upscale in “The Ketchup Conundrum.”) Although we may claim to crave “gourmet,” sometimes we prefer it in the abstract.
For example, dark chocolates with cocoa contents pushing the limits of palatability are all the rage with aficionados of “intellectual” candy, Rose points out. “Talk to all your friends, talk to anyone, and they all say, ‘I’m a real connoisseur; I like dark,’” he notes. “But if you look at numbers, we still sell a lot more milk chocolate than dark. So then who are all these closet cases buying the milk?” Not for nothing does Snarsky’s company offer a milk-chocolate flavor to help tame those 75%- and 80%-cocoa bars. As she says, “There are a lot of people who like the idea of dark chocolate, but still want it to taste like milk chocolate.”
Making indulgence manageable
So the arithmetic involves finding the food that: captures the public’s fancy, is amenable to efficient and economic formulation and production despite high-caliber ingredients, and represents a tangible improvement over the norm. It then boils down to the matter of formulation. Premium products contain premium ingredients with premium prices.
Difficult sourcing and supply fluctuations account for much of the sting, with plantation-origin chocolate often costing 50% more than standard high-quality chocolate, Rose says. Introduce the complexities of organics—which, signals, if not indulgence, then at least enhanced value—and costs climb even higher. Organic production can put as much as a 20% to 30% tariff on chocolate. “It also creates a lot of issues in sourcing,” he adds. “There is not that much organic sugar being produced in the world, and there are not that many cocoa beans. We regularly have shortages in organic products. The demand is exceeding what is being produced.”
Organic sourcing poses challenges in the case of wild mushrooms, too, says Rupp. “We have suppliers in Eastern Europe that are certified. We have suppliers in China that are certified. But it’s a tax for them. It can be expensive, for the wild side.” Cultivated mushrooms are a little easier to manage, he notes, “But at the same time, you still have the difficulty that the medium you grow them in—the soil mixture—has to be certified, too. You’ve got to go back and prove that all of that is organic, which is a challenge.”
Nevertheless, designing for indulgence —organic or not— needn’t break the bank. Prices for commodities are subject to market whims, and while that means you sometimes get burned, it also means that you can sometimes find bargains. For example, Nesper notes that hazelnuts “can make food products appeal to that premium gourmet market, but at the same time, they are actually not priced as a premium nut.” In late winter of 2007, for example, hazelnut price per pound ranged from $2.80 to $3.25, below macadamias at $3.65 and pecans at $3.90 to $4.40.
Regardless of market prices, “spreading the wealth” can lower cost in use for key luxury ingredients. “Let’s be realistic,” Rupp says. “We can always make a pasta sauce that tastes great because it’s 30% mushrooms. But that’s probably not price-effective. So, it’s finding that balance of getting enough of the flavor that you want at an acceptable cost. And that’s what we try to help our customers with by offering different blends, doing size reductions, and offering a lot of ingredient forms.” Blends are especially effective; by buttressing a pinch of specialty ’shroom with a more-ordinary fungi foundation, they stretch mushroom mpg. “The one mushroom that customers typically want to put on their menu is the porcini,” he says.
“They still have that lore of Europe. By blending them with other mushrooms that aren’t as expensive, it’s a way for manufacturers to get a couple of different mushrooms onto their ingredient statement and get some different flavor profiles, too.”
Another cost-saving tactic Rupp mentions is to reduce ingredient size—again, to distribute the perception of premium throughout the product. “We call it ‘kibbling,’” he says, “but it’s essentially a diced form. Porcinis can be 4, 5, 6 in. tall. Well, you don’t want to see a big slice of that on your pizza. So, by having them diced down to a ¼-in. size, or something like that, it allows you to mix it into the formula easily.” And while freeze-drying best preserves a mushroom’s quality, it’s also among the most-expensive preservation methods. A more-economical, yet wholly acceptable, option is air-drying. “When you air-dry it, you’re essentially only removing the moisture, so you’re concentrating the flavor of the mushroom,” he explains. “When you rehydrate it, you get all that flavor, and you don’t have to ship all that weight.”
Even air-dried white truffles might command a price too dear. Flavor suppliers “want to cut the manufacturer’s costs,” says Snarsky. A little hit of flavor might be all it takes to amplify the impression of a premium ingredient whose character just doesn’t rise to the top at practical amounts. “I think having the porcini mushroom in the ingredient statement is the hook,” Snarsky says, “but when they taste it, it’s got to taste like what comes out of a restaurant. And that’s where flavors can definitely help.”
Nobody ever said indulgence would be easy. As Greenwood recalls, “we did things that were incredibly difficult, like saying, ‘Hey, let’s put a couple of chunks or add-ins with a swirl. Or how about two swirls that wind around each other? Or how about a pocket of fudge right in the middle of the thing?’” When he and his colleagues began toying with their now-legendary chocolate- chip cookie dough ice cream, “We’d take these 5-lb. barrels of cookie dough, put them in our spiral freezer, and scrape the dough out with a double-handled knife and cut it into one-inch blocks to put in the ice cream.” Suffice it to say, they don’t do that anymore.
“So hats off to our engineers,” Greenwood continues, “and to the R&D team, and to production, and our quality-assurance people here who had to tackle some of those challenges to make the ice cream seem like a luxury, and to make people say, ‘Wow,
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