By collaborating with pastry chefs from all around the world, I had the opportunity to observe the special relationship that connects chefs and consumers with this unique confectionary: chocolate. While it remains one of the most exciting consumer goods, substitution for other snacks, a negative health perception and a slowdown in promising markets (China and Brazil) threaten to undermine this market. (1) This may partially explain why the Hershey company (THC), which dominates the US chocolate market with 32.2% market share (2), innovated in 2015 by launching the \u201cCocojet chocolate printer\u201d, which combines 3D printing technology from \u201c3D systems\u201d and the expertise in chocolate of THC to print chocolates in various shapes, sizes and geometry.<\/p>\n
Additive manufacturing, also known as 3D printing \u2013 \u201ca process used to create a three-dimensional object based on a digital file, in which tiny layers are printed one over the other until a complete structure is formed\u201d (3) \u2013 represents a great opportunity for this company for two main reasons. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Firstly, it offers a great marketing tool to address the consumers growing demand for customization, and thus to increase revenue and loyalty. Segment\u2019s Report (4) found that 71% of consumers express some level of frustration when their shopping experience is impersonal and 44% of consumers says that they will likely become repeat buyers after a personalized shopping experience. This high need for customization matches where 3D printing simply works best (which compensates the absence of economies of scale)(5). This increased loyalty could help to hedge THC\u2019s exposure to an impulse decline \u2013 in 2016, 62,6% of THC sales came from Impulse products. (1) \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Secondly, this technology could open up the door to new markets, in which THC has little market share: B2B. As of today, most top pastry chefs in the US order their customized chocolate through a French company – PCB creation (6). While this solution works well in France, it leaves significant opportunities abroad. As of today, chefs need a long lead time, which is both cost ineffective and operationally challenging. While this only represents a niche market for THC, this would open up the door to the growing B2B market, which is more significant than the customized chocolate market and more profitable in a context of challenging retail environment (manufacturers squeezed from the demand side by retailers). (1,10)<\/p>\n
To address these goals in the short term, THC will mostly use its 3D scanning and printing technology to print out customer\u2019s pictures on their chocolates during marketing operations instore. Although this may seem simple, this process is quite complex since chocolate have much different melting and cooling properties than something like plastic. The machine thus requires a relatively long time to perform its task. That\u2019s why, Jeff Mundt, Hershey\u2019s tech marketing executive, explains that for now THC will mostly use this technology for 2D design since the \u201cmain goal is to have customers interacting with the technology, be delighted by it, without having to wait half an hour\u201d (7). \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0As regards the introduction of B2B, Hershey announced in 2017 a new partnership with the world-renowned Culinary Institute of America (CIA). The CIA will thus integrate into its curriculum 3D printing technology so that chefs can explore its creative, design and functional capabilities, using new techniques that will integrate 3D printing into the professional kitchen (8).<\/p>\n
I would recommend THC to use its 3D chocolate printer to introduce significantly the B2B market with a brand for professional. To do so, THC should first continue to \u201ceducate\u201d the younger generation through sponsorship with schools and start training the current generation of chefs about 3D printers. Once this knowledge is widespread, I would develop a brand for professionals that will feature a range of specialty chocolates. This range should 1) match the quality of the current leader in the industry \u2013 Valrhona (9), 2) match the growing demand for healthier and organic goods (10), and 3) feature specific organoleptic characteristics that would differentiate THC from its competitors in terms of performance when used with its 3D printer. Most pastry chefs and food distributors rationalize their supply chain to only carry one brand of specialty chocolate. Therefore, using this competitive advantage could enable to convince chefs to switch to THC. While this would require time, educating the market would certainly\u00a0fasten this process since distributors will always carry the products requested by their demanding customers.<\/p>\n
However, would such a large corporation be willing to invest in a long-term strategy to introduce a new distribution channel? Reducing cost and new processes (increasing automation, voxel control and improving software) are key drivers that will grow the 3D printing market (11) in the coming years but will this be enough to convince pastry chefs -with little time and tech background\u2013 to switch to this new technology?<\/p>\n
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How can additive manufacturing help the US leader of the chocolate industry to address the current challenges facing its industry?<\/p>\n","protected":false},"author":11825,"featured_media":33599,"comment_status":"open","ping_status":"closed","template":"","categories":[4102,3865,1076,1320,970],"class_list":["post-33598","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-3dprinting","category-b2b","category-b2c","category-chocolate","category-personalization","hck-taxonomy-organization-hershey","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\n