If you ask people around the world what do you love to eat? high on the list will be chocolate. Likely if you had children at your door last evening for Halloween, chocolate would be in your house. Have you every gone to your favorite supermarket or chocolate retailer and looked at the owners of the chocolate companies? The companies make billions of dollars because people love or enjoy chocolate. One of the books written about chocolate is Chocolate Wars by Deborah Cadbury published by Douglas & McIntyre Press, Vancouver, 2010. The author’s name Cadbury means there is an emphasis on British chocolate companies because she is related to the Cadbury chocolate company.

In terms of Europe, chocolate was found in Mexico where the Aztecs where great lovers of the bean and the expression “money does not grow on trees” comes from as the Aztecs used the bean as the basis of their currency. From Mexico the use of chocolate comes to the Spanish Court in the form of a drink, it quickly was seen in coffee houses of the day, and you can still buy hot chocolate in your favorite coffee shop. The dominant company for drinking chocolate was Fry’s – the yellow can. They had immediate success and were only interested in cocoa powder. For generations – management asked why tinker with success?

The chocolate bars that most of us have tried and likely eaten in the past year, has a different direction because of cocoa butter. For a long time, the cocoa butter fat from the established processes was 50% and was slowly reduced to 30%. The chocolate manufacturers saw possibilities – two different products – use one part of the bean to make pure cocoa and the other part of the bean to eat and that would be targeted to the masses of people. In England, advertising was beginning for most of commerce was done in small shops. If people saw the advertising, they would ask for it and the grocer would stock the item. At the time, chocolate by itself had a slightly bitter taste.

In Switzerland, the chocolatiers were experimenting with using milk and chocolate together to make a sweeter and smoother bar. It was a struggle to find the correct formula but it was found and the process for chocolate which melts in your mouth was discovered. The key was to find a way to evaporate the water from the milk in such a way that it could be smoothly mixed with the sugar and cocoa fats. Then the next problem was to scale up operations to produce the bars people would buy.

Linking to dividend paying stocks, the above process took over 400 years – the 1500’s to 1905. Chocolate was around, at first it was expensive but as time went by the manufacturers brought chocolate to the masses where more could be and is eaten. The growth of the companies and its sustaining power is what drove the markets. In the early days, there  were many companies but most were smaller scale in size. As the manufacturers unlocked secrets in the production phase this is when they could scale and grow the market. It was then the companies made an excellent investment.

There are more questions than answers, till the next time – to raising questions.