Tasty opportunities for SMEs
By Rebecca Burn-Callander - 22 FEBRUARY 2016 - 11:45AM
Changing flavours of classic products offer the chance for budding entrepreneurs to recreate their old favourites
Have you ever tried a product that you used to enjoy as a child and thought: “This doesn’t taste the same?”
Don’t get mad, get even: this could be an opportunity for budding entrepreneurs to create a product that tastes like their old favourites used to.
This is what inspired Brian Watt to launch drinking chocolate company Hans Sloane. He says that a number of producers “have been steadily removing the cocoa content from hot chocolate, because it’s the most expensive ingredient”.
Mr Watt reckons that “hot chocolate should have five ingredients at most, but when you read the back of the drinking chocolate brands on sale now, some have more than 15”.
Some brands can have 25 ingredients, including palm oil, soya lecithin and several “emulsifiers” and “stabilisers”. Legally, a product can be called drinking chocolate if it contains a minimum of 25 per cent cocoa.
Mr Watt's range of drinking chocolates, which are currently stocked in Waitrose, contain between 33 per cent and 70 per cent cocoa. By including more cocoa, the product is more expensive to manufacture, but “if your product tastes better then you can command a premium price”, he says.
Weirdly, brands are not obliged to tell customers if they have reformatted products.
“Big companies compete with each other in the same way, by stripping out expensive ingredients,” he adds. “Every time there’s a spike in commodity prices, they will reformulate.
“It may only be 5 per cent each time, but over five years that will completely change the taste of the product.”
This is not always because the manufacturer is keen to boost margins. There is often pressure from retailers to bring down the price of products.
The current spate of supermarket price wars, which have been driving down prices over the past couple of years, has increased the likelihood of reformulations taking place.
If the product is “non-core” – not essential to the brand’s survival – there is an opportunity for smaller, innovative start-ups to pounce on those opportunities.
But it is important to work out why something tastes different. If a lot of the fat or sugar has been stripped out, this may be in response to new EU regulations. Legislation on health and nutrition claims on food labels and in advertisements have been radically overhauled in recent years.
“With chocolate, it’s simple: cocoa is the most expensive part of the recipe,” Mr Watt says. “Chocolate is such an emotional category; when it doesn’t have the taste it used to have, it’s upsetting.
“When I notice that a chocolate bar I used to love tastes different, I look for old packs online to try and check where the formulations have changed, but it’s very difficult to track down that information.”
Weirdly, brands are not obliged to tell customers if they have reformatted products. The only way to know is to trust your taste buds, Mr Watt says: “The first question to ask when you eat anything is: does it taste like it’s supposed to taste?”