Quest for a New Chocolate Bar

Project Phase - Alternate Fats

After having spent the latter part of the summer of 1980 trying to achieve good caramel flavor by using reducing sugars, prototype bars were produced that incorporated much of what had been learned. Some of the caramel-type flavors were reproduced, but this also resulted in some sour-type and bitter off-notes. Even though it seemed like each day they were making some progress, Larry was slowly arriving at the conclusion that it was impossible to develop the sweet, caramelized sugar notes that were also needed without the appropriate equipment and resulting capital expense. Each time he thought of this, he had to remind himself of senior management's reluctance to approve large amounts of money for this project. So, when he received the news that Canadian management preferred the use of non-cocoa butter fat, he felt the idea was worth trying despite the additional difficulties that this decision entailed.

The reason for using fat substitutes made a lot of sense to the Canadians. Their thinking was: "If we are going to change the formula, why not try a non-cocoa butter fat anyway since it is a lot cheaper." Besides, many other companies in Canada already made the decision to use substitutes because of high cost pressures. Margins were shrinking from year to year and profitability in the whole industry was at an all-time low. Any plausible alternatives were welcome.

At one point, Larry was explaining to Judy why this decision probably was not far-fetched.

Larry: Every possibility we have looked at so far has included cocoa butter, which is costing us anywhere from $2.25 - $2.50 per pound. Fat substitutes are still in the $1.50 to $1.60 range, and vegetable oils are 80 cents. This makes cocoa butter an expensive fat to put into a product.

Judy: I see. And considering that about 32% of our product is cocoa butter...

Larry: That's right. Now, the target we are after is a European chocolate which has 33% to 35% cocoa butter. So, we would be required to add 1% to 3% cocoa butter on top of the product that we are already making and not being able to sell in Canada. We are talking a very expensive product that we are targeting.

Judy: So, cost-reduction while reformulating is a tantalizing possibility.

Larry: That's correct, Judy, and that's what we have to do next.

Though Larry was all for it, he knew that this was not going to be the last time the project would get pulled back because it was too expensive. There were too many unknowns. Senior management's insistence that the new chocolate bar had to match the cost of the regular Hershey product -- or even better, to cost less -- was proving to be a formidable challenge. They were going up against a product which costs a few percentage points more than Hershey's product to start with. On top of that, he was instructed to match the flavor or, even better, to beat it in consumer tests. And if that wasn't enough of a challenge already, manufacturing costs also had to be less even though they had to manufacture it with equipment that wasn't designed to manufacture this kind of product. Sometimes Larry thought that maybe what they were pursuing was an impossible. But, as a true new food product developer, Larry was always driven to look for a way. So he contacted Hershey's Basic Research, Project Engineering, and Chocolate Product Development personnel to ask for assistance in dealing with alternate fat systems.

Larry was advised to use coberine and choclin as the alternate fat source. Other fat sources were ruled out because of the necessity to use chocolate liquor in the formula or because they were not compatible with cocoa butter in the ratios necessary for a quality formulation. Toward the end of the summer, Larry and Judy started laying out plans to work at the benchtop with choclin, the fat of choice. It was not long before they found myriad of problems.

A few weeks into the development of prototype formulations, it was found that the high milkfat level used to date was too high to be totally compatible with choclin. "The natural thing to do," as Larry instructed Judy, "is to evaluate various ratios of whole fluid milk and skim milk solids to reduce the milkfat content to permit the use of either choclin or coberine." They developed a new plan that revolved around the following four points:

1. Lower the milkfat to produce a firmer textured bar
2. Replace a portion of the caramelized milk with nonfat whole milk powder to reduce the strong sour notes and also produce a lighter colored bar
3. Increase the sugar/milk solids ratio to get more sweetness, less sour milk notes and produce a less pasty, thick texture
4. Replace all the added cocoa butter with coberine and choclin

Shortly after that plan was laid out, trials of the compound chocolate product using both fats were produced in the pilot plant. Although some difficulty in tempering was encountered, Larry and Judy were encouraged to find that both fats produced an excellent eating product. Therefore, Larry instructed Canadian personnel to produce milk crumb in the Smiths Falls plant in August, 1980, to permit the use of either choclin or coberine. All of a sudden, things were starting to look up again... until Larry found out that many significant issues were still unresolved. Many of these issues were being raised by Ogden Johnson himself.

Since Larry was instructed not to use cocoa butter-based products, senior Canadian managers, including David Conn and Don Thomson, were still wrestling with the wisdom of this decision.

• Would the Canadian consumer notice the difference between this new non-chocolate version of the product and current Hershey products?
• Would the texture of the new non-chocolate product have noticeable effects on mouthfeel?
• Were there going to be problems with the availability of the alternate fats?
• Was the Smiths Falls plant appropriately equipped to manufacture non-chocolate products?
• Would the final product meet the standard of reference (Jersey Milk), considering that even this product was currently undergoing formulation changes?

Research had shown that the Canadian market was changing rapidly and most of the products on the market were continuing to decrease the overall quality. Hershey Canada knew, for example, that Jersey Milk had already changed significantly for the worse since the beginning of 1980.

Many unanswered questions remained regarding the product itself, product testing, packaging, labeling and the whole manufacturing process. Since Larry knew that a new decision was in the works, he decided to put the chocolate Vs non-chocolate issue under perspective. With Judy's help, he completed a report on estimated composition and cost analysis, which he distributed to all concerned. Now it was time to wait for the new decision.