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Upscale chocolate makers sweet success

March 30, 2007 on 3:15 pm | In Money |

BERKELEY, Calif. - Americans love of chocolate has become a dark and bittersweet affair, and it took a former vintner to make it so.

John Scharffenberger and Robert Steinberg launched the first U.S. chocolate manufacturing company in half a century, drawing heavily on Scharffenbergers refined palate and his past as a maker of sparkling wines.

Together, they set out to do for dark chocolate what fellow Californian Robert Mondavi had done for wine demystify, democratize and domesticate it.

Call it kismet, uncanny timing or creative chemistry, but in the 11 years since co-founding Scharffen Berger Chocolate Maker they have watched the publics appetite for gourmet chocolate expand from a Valentines Day extravagance to an everyday indulgence.

Weve gone through a food revolution in this country, said Scharffenberger. Just as Americans have become more sophisticated about wine, whole-bean coffee, artisan cheeses and other products that once were the luxury of certified foodies have been mainstreamed to the masses.

The one thing that remained to be done was chocolate, and thats what we hit on, Scharffenberger said.

Like the label of a fine wine, the wrapper on a Scharffen Berger chocolate tells you exactly whats inside. It was the first U.S. chocolatier to feature the cacao count prominently on its wrappers the higher the number, the darker and more bitter the chocolate. And the source of the beans is also noted, for those who like knowing whether their chocolate got its start in Madagascar, Ecuador, Ghana or Peru.

Scharffen Berger bars now are prominently displayed in the checkout lines of grocers like Trader Joes, Andronicos and Whole Foods.

Yet venerable players like Reading, Pa.-based Godiva Chocolatier Inc., part of The Campbell Soup Co., and Ghirardelli Chocolate Co., now headquartered in San Leandro, Calif., jump-started the trend, said Marcia Mogelonsky, an analyst with the market research firm Mintel International. They popularized fancy chocolates with upscale, single-serving packaging, wider distribution and savvy marketing, she said.

Even The Hershey Co., the name synonymous with American chocolate, has invested heavily in premium chocolate, showing it is more than a fad, she said. Besides buying Scharffen Berger 1 years ago, the company has introduced its own line of premium chocolate bars and late last year purchased Ashland, Ore.-based Dagoba Organic Chocolate.

Between 2003 and 2005, U.S. sales of premium chocolates went from $1.4 billion to $1.79 billion, according to Mogelonsky. While it still represents only a fraction of the overall $15.7 billion chocolate market, the growth rate for the good stuff has been much faster 28 percent over the three-year period compared to annual rates of 2 to 3 percent for the industry as a whole.

People were ready for a change, said Mogelonsky. She relates the trend to Americans growing self-indulgence.

I cant afford a mink and a diamond, but I can afford a piece of really good chocolate, she said.

As with wine and coffee, the origin of premium chocolate has increasingly become a selling point. And consumers have also responded to manufacturers efforts to tout their relationships with growers in the developing countries where cacao typically comes from, she said.

The quality and quantity of cacao in a bar or bonbon is what distinguishes fine chocolate from the coating on a Snickers, according to Scharffenberger, who personally oversees the blending of 30 varieties of beans that go into the companys products and visits the ranches in Guatemala, Madagascar and other countries where it secures supplies.

We arent creating flavors that are earth-shattering, just delicious, he said.

The Food and Drug Administration requires milk chocolate to contain at least 10 percent cacao, but Scharffen Bergers milk chocolate contains a whopping 41 percent. Its darkest dark chocolate, 82 percent.

Before Scharffenberger and Steinberg set up shop, California already was home to plenty of chocolate makers both high-end and pedestrian. Besides Ghirardelli, they include Glendale-based Nestle USA, Guittard Chocolate Co. in Burlingame, Joseph Schmidt Confections, which also was bought out by Hersheys last year, and Sees Candies in South San Francisco.

The growth has been steady enough that by 2000 California had edged out Pennsylvania, home of Hersheys, to become the nations chocolate capital. In 2004, the last year for which figures were available, California had 136 companies churning out chocolate and cocoa products compared to Pennsylvanias 122, according to the U.S. Census Bureau.

Besides its reputation as a food snobs paradise, there is a practical reason the San Francisco Bay area, in particular, has emerged as the heart of chocolate activity: the consistent, moist climate, according to Scharffenberger.

Its a pain to make chocolate when its hot, he said.

Like a winery, the company offers tours of its Berkeley factory where participants about 40,000 of them a year receive morsels of chocolate trivia along with free samples. On a recent morning, a tour group learned, for example, that cacao beans are technically a fruit, that dark chocolate tastes better melted on the tongue instead of chewed, and that the actual cacao content of white chocolate is zero.

Adrienne Newman, an aspiring chocolatier from Austin, Texas, was taking the tour for the third time after making chocolate a full-time hobby. Over the holidays, she took her boyfriend to Switzerland so she could taste the local wares, and she mail orders chocolate from new companies whose products she wants to try.

For a long time, she could still enjoy a Hersheys bar, Newman said, but no more.

Im beyond that, she said. After three years of tasting exquisite stuff, there is no going back.” 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.