Almost anything can be purchased online. Items such as books, movies, clothing, cameras and groceries are just a few clicks away from consumers. With services such as one hour delivery or similar offered by Amazon and other companies, customers can be sure that they won’t have to wait long before receiving their items. Best part of all, because the items usually come straight from the manufacturer, the prices are usually competitive.
But did you know that chocolate, a relatively common treat enjoyed by so many, presents a big logistics problem for companies that are trying to offer individual deliveries?
The issue has to do with heat. During the summer months and in warmer climes, chocolate will melt or “bloom” which is when fat in the chocolate rises to the top and leaves a white discoloration. It is for this reason that refrigeration is so important when shipping large shipments of chocolate across long distances. However, the economy of scale that offsets the costs of refrigeration goes away as shipments become smaller. So although the holidays are a popular time to give chocolates as gifts, chocolate makers are not typically making the profits that those outside their business would expect from the surge of orders seen around Valentine’s Day, Christmas and Easter.
Customers expect to be to purchase items online and chocolate companies want to meet those expectations. It comes at a cost though as Robbie Whelan explains in this writes in Wall Street Journal:
Keeping a small shipment of chocolate cool can cost more than the product itself. Hershey charges $6.95 to ship a $4.25 bag of Kisses ordered on its website. In a notice on the site, the Pennsylvania-based maker of Kit Kat and Reese’s also “strongly suggests” that customers buy liquid ice packs and a foam cooler for an additional $4.99. That, plus the recommended expedited shipping, would bring the cost to $20.20, before taxes.
As sales for chocolate grows, the volume of individual orders and sales will continue going up. For example, between 2010 to 2015 overall online chocolate sales grew over 80% in the U.S. Chocolate is also seeing a rise in sales internationally as countries such as China are consuming chocolate and growing rates.
Europe is also seeing a surge in chocolate sales with the UK as its export of chocolate to Switzerland has increased 160% in just the last four years. The UK has become a major exporter of chocolate both within Europe and for emerging economies.
“Overall, U.S. online chocolate sales rose more than 80% between 2010 and 2015, to $341.7 million annually, according to data provider Euromonitor International, and e-commerce represented 1.9% of all chocolate sales last year, up from 1.2% five years earlier” writes Whelan.
There are attempts at bringing down the costs of online shipments. Last month, Hershey accepted its final entries in a competition with a prize of $25,000 for whoever designs the lightest, most-affordable packaging to keep chocolate from melting for at least 48 hours. It hasn’t announced the results.
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