“Jokolade”: Joko Winterscheidt wants to conquer the chocolate market

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As befits an entertainer, the idea for his new business came from a crude word joke.

TV presenter Joko Winterscheidt has been selling his own chocolate since Friday.

He called the specially founded start-up “Schoko Winterscheidt GmbH” and named the four different types of bars “Jokolade”.

And the entertainer is very proud of that: "The basic idea for the Jokolade comes from my own hand this time," says Winterscheidt to WELT.

He said that he had no more laughing at his pun when he found out about the mining conditions in the producing countries.

“As a chocolate eater, I actually have blood on my hands,” says Winterscheidt.

Cocoa farmers in West Africa often live in poverty, which leads to child labor and modern slavery.

“I was permanently concerned that I didn't know that,” he says.

With his chocolate, the TV presenter now wants to stand out from the broad competition.

The cocoa in his bars is already 99.2 percent transparent and fair.

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With his plans, Winterscheidt encounters a traditional market that has been dominated by comparatively few brands for many years, above all Milka and Ritter Sport, Alpia and Schogetten or in the high-price segment Lindt and Hachez.

“A breath of fresh air can't hurt,” says Hans Strohmaier, managing director of the Sweets Global Network.

The expert also sees opportunities for the newcomer.

“Mr Winterscheidt naturally polarizes.

But there should be enough fans who grab it, ”says Strohmaier.

The example of wine has been showing for many years that prominent names can encourage people to buy.

A number of celebrities have gone among the winemakers, including Sting and Madonna, Gérard Depardieu and Francis Ford Coppola and, most recently, Thomas Gottschalk and Günther Jauch.

Apparently with success too.

“It is unbelievable how consumers can be influenced by well-known names,” says an industry expert.

Winterscheidt should now also hope for this effect for his Jokolade.

Whereby the entertainer is breaking new ground.

"That is rather rare," says the Federal Association of the German Confectionery Industry (BDSI) about the connection between celebrities and chocolate.

In 2010, the moderator Dirk Bach, who has since passed away, took part in the development of the Shokomonk chocolate bar, which was then listed in traditional retail for several years.

Taste is the main criterion for buying chocolate

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In the case of the everyday product chocolate, however, the conditions are completely different from those of wine, for example.

"Various representative consumer surveys have clearly shown that the taste of the chocolate is the main criterion for repurchasing a product," says the managing director responsible for chocolate, Torben Erbrath.

But the orientation of the chocolate start-up from Winterscheidt is trendy.

The topic of sustainability is being pushed forward continuously in the industry.

Take cocoa, for example: In 2019, 72 percent of the beans processed came from sustainable and certified cultivation, reports the BDSI.

For comparison: in 2011 this proportion was only three percent.

"This means that German industry is taking on a pioneering role not only in Europe, but worldwide," says association representative Erbrath.

Winterscheidt regulates cocoa procurement through a purchasing initiative that has set itself the goal of sustainability and transparency.

"We have to pay the farmers fair prices and ensure that the local production conditions improve significantly," says Winterscheidt.

He therefore pays the cocoa farmers a surcharge of 20 percent on the sales price.

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In addition, his company works with the Swiss chocolate company Barry Callebaut on production.

“It was a conscious decision to look for a great partner,” says Winterscheidt.

“If our project causes the dominant corporations in the market to rethink, it can have a lever.” They ultimately moved billions.

In fact, a consortium of human rights organizations, workers' associations and research institutes is also calling for a system change on the chocolate market.

“After two decades of failed interventions in the cocoa sector, cocoa producers are still struggling with the effects of poverty, child labor and deforestation,” they write in their latest Cocoa Barometer, which includes the German Südwind Institute.

One of the problems: Millions of small farmers come from a few dominant global corporations.

The Ivory Coast and Ghana, the two largest cocoa producers in the world, have been selling a ton of cocoa beans since this season at a fixed premium of 400 US dollars.

Traders have to pay the sum as a so-called income compensation (LID), which is supposed to lift the farmers out of poverty.

However, little is known about how strictly the LID is paid and what it is spent on.

And anyway, this premium would still not be enough, criticize the authors of the barometer.

In the Ivory Coast and Ghana, cocoa farmers can currently expect farm-gate prices of around $ 1,800 per ton, but they say they need around $ 3,100 for a sufficient living.

Tough competition for the chocolate

However, the market launch will not be a sure-fire success for Winterscheidt.

"Bringing new products onto the market will be more difficult this year," says BDSI chairman Bastian Fassin.

On the one hand, trade fairs and customer visits were eliminated.

"On the other hand, consumers are reducing their shopping time in the grocery store and are more likely to resort to classic than to an unknown, new product."

The environment is tough and the range is large.

And the trade keeps coming up with competitive prices.

There are even bars from brands such as Ritter Sport and Milka on special offers, sometimes well below one euro.

Some premium providers no longer want to fight this battle.

The Berlin noble confectionery Rausch has not been selling its products in supermarkets for a number of years, but only through its own retail store and online shop.

Winterscheidt is also initially selling its chocolate online.

But from the end of February it will also be on the shelves of the retail chain Rewe.

“Our product has to be well received in order to bring about change,” says the entrepreneur.

His bars are likely to be among the most expensive in the supermarket - they should cost 2.79 euros, which is even more than premium brands like Lindt.

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However, Winterscheidt is not afraid that customers will only look at the price tag.

“You don't have to sell products below their value for consumers to buy,” he believes.

“I'm not even saying that people should only buy my chocolate.” The only thing that matters to him is that the other suppliers support a fair value chain.

Profit under the guise of social responsibility?

In any case, Winterscheidt wants to refute this impression.

"I'm not going to fill my pockets with the company," says the moderator.

"I would also find it wrong to enrich yourself here on the back of a necessary positive change within the industry."

Most of the profits should therefore remain in the company.

Winterscheidt would only be happy to get his investment back.

So far he has invested a six-figure amount in the chocolate company - from his private assets, without any external donors.

Overall high demand for chocolate

The prerequisites are there anyway: The demand for chocolate in Germany is currently noticeably high, reports the SME association ZGV.

At least in supermarkets, discounters, drugstores and petrol stations: sales of so-called chocolate products, such as bars of chocolate, bars and pralines, rose by a good six percent in the Corona year 2020, according to current figures from market researcher IRI.

The classic 100-gram bar can increase by around three percent to a good 131,000 tons, while the large bars even increase by ten percent to a good 61,000 tons.

Chocolate bars remain the largest segment in the food retail sector, with sales of almost 200,000 tons, nine percent more than in the previous year.

This rapid development is a consequence of the corona crisis.

"Otherwise only very small fluctuations are usual, depending on the name of the summer", describes industry expert Strohmaier.

Home office and homeschooling have now led to shifts in sales channels, according to the Mittelstand association, which in return is worried about other sales channels.

Source: WORLD infographic

"If the lockdown continues, it is to be feared that the retail companies that are currently in distress with a focus on confectionery sales, especially in inner-city locations, shopping centers and at classic traffic hubs such as airports and train stations, will be threatened and in some cases will no longer open", says ZGV General Manager Ludwig Veltmann .

The first signs are already there: Deutsche Confisserie Holding (DCH) with the three brands Hussel, Eilles and Arko recently had to file for bankruptcy.

But the situation is also tense with manufacturers.

"2020 was a difficult year," says BDSI chairman Bastian Fassin, who is the main job of the fruit gum manufacturer Katjes.

Although sales in the domestic food trade have picked up, there are some significant losses in exports due to the Corona.

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The German confectionery industry with its around 200 companies is considered to be the world's leading exporter.

For the first time in years, the number of employees has therefore decreased - by 800 to around 49,000.

And the outlook for 2021 is anything but positive.

According to a current BDSI survey, two out of three companies assess the business situation at the beginning of the year as worse than a year ago.

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At Ritter Sport, for example, income fell significantly.

The turnover of the Swabian chocolate company fell last year for the second time in a row to 470 million euros, as the company announced on Wednesday.

In 2018 Ritter Sport had generated 489 million euros, in 2019 it was 480 million euros.

Because of the Corona crisis, the otherwise successful business in the duty-free shops at airports or on cruise ships in particular collapsed.

But exports also weakened, especially to Asia.

For Barry Callebaut, too, things have been sluggish recently.

The turnover of the Swiss chocolate manufacturer fell by 11.2 percent to 1.78 billion francs in the first quarter of the financial year.

Until it is completely transparent, Winterscheidt's chocolate is still missing a piece.

The market with its supply chains is far too complex for that.

“We want to communicate openly everything that we are not yet cool,” promises Winterscheidt.

The entertainer is more concerned about whether his flavors such as milk chocolate with pear and caramel will be popular.

If not: "More recipes and ideas are already on the dump."