Choc One Up in China

As China is sweating bullets over its approximate $1.3 trillion in U.S. treasuries sitting in the hands of a gridlocked, damn-the-debt-ceiling Congress, Americans are repeating an old Western habit of trying to addict the Chinese to a compelling substance. The last time the West tried this massive addiction effort was in the middle of the nineteen century. It started almost a century earlier, as the Chinese pleasantly addicted the British to their lovely tea.

By the late eighteenth century, dem Brits was watching gold and silver pour out of their collective coffers to satisfy their craving for this leafy brew, only available from China. They begged the Chinese, sending several sets of high level emissaries, to balance trade and start buying British. But this was in the days before fine and pricey Rolls Royce, Bentley and Jaguar motor cars. The Chinese found nothing of value made in England that they were willing to pay for. The British cried foul (fowl?) or sticky wicket or something like that.

With massive balls of unsold opium sitting in their British colony around the corner – India – England decided that this was a product with potential in China, which up until that time had had only a relatively minor addiction problem. So the Brits rolled in the opium to China – it has wonderful medicinal benefits, really, they cried – and made sure the product was cheap… for a while… and plentiful. As the Qing emperor protested and tried to quell this nascent drug trade, the British navy attacked, their marines landed guns blazing. The Chinese were militarily unprepared. The result? The infamous handover of Hong Kong, opening of the international settlements in Shanghai and later, the Portuguese colony on Macau.

Oh, did I mention that the British then stole tea plantings and the “secret recipe” for how to age the stuff… and set up massive new plantations in India, which then became famous for its tea! Well, addiction fans, we’re at it again. But this time the diabolical substance is, God protect me for saying this, but… it’s chocolate. If America can be the land of chocoholics, some a bit larger than the average bear (literally!), so dreamed the purveyors of the sweet stuff, Hershey’s and Mars could such an addiction generate huge profits in the People’s Republic? Add a few Western competitors into the mix, and you have a horse race!

Not so easy, it seems. Chinese don’t exactly have a sweet tooth, preferring a savory experience instead. Marketing consulting firm, Daxue, tells us: “Selling chocolates in China is till challenging. The 8 cuisines of China rarely fit with chocolates and it is more among minorities such as in Xingjiang that you can find an attraction for sweet tastes. Nevertheless, the number of Chinese buying chocolates as a gift or simply for their own consumption is increasing fast in first-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Hong-Kong, Maucau or Taipei.” 

Author Lawrence Allen, in his book, Chocolate Fortunes, tells us that “In this land where twenty-five years ago most of the population had never tasted chocolate, five icons of Western business [Hershey, Nestle, Cadbury, Mars, and Ferrero] are now slugging it out in a battle royal to see which will become the Emperor of Chocolate in China…Chocolate was not part of the traditional Chinese diet. It was as alien to them as underarm protection.”

Well, they may want it a bit less sweet, but almost 1.4 billion folks is a market too immense to let slide by. So let’s look at how the folks at Hershey are tackling the problem: “Sales of chocolate, candies and gum have jumped nearly 50 percent in China over the last five years. The country's craving for chocolate, nearly $2 billion's worth a year, is too sweet for Hershey to ignore.

“Far from its Pennsylvania roots, Hershey has just built its first research and development center in Asia, on the outskirts of Shanghai…  Qingbin Yuan heads Hershey's ‘innovation center,’ and said that its mission is to ‘try to develop product that is tailored to the taste of the consumer, the local consumer.’… Hershey's research shows the Chinese prefer salty flavors, nuts and chocolate that is not as sweet as what is sold in America. So based on local consumers taste and preferences, they create products that are unique to China and not sold in the United States.” CBSNews.com, July 17^th.  Want some candy, little Ming?

I’m Peter Dekom, and this a story that you really don’t have to brewed about.