In 2017 the world’s media was awash with news of the invention of a new type of chocolate. Ruby chocolate joined dark, milk, and white as the fourth chocolate to hit the market and it’s only recently that we are seeing widespread availability of the sweet-sour berry-flavoured treat.
For Easter several retailers are offering new products, like Marks and Spencer’s Ruby Chocolate Egg and Aldi’s Exquisite Ruby Heist. However, despite the press ruby chocolate gained on its unveiling, awareness is quite low among the general public. Only 29.9% of our panel reported being familiar with it.
Having segmented a portion of our community into aware/unaware demographics we then asked those who were aware of ruby chocolate whether they had already tried it, or wanted to. The response was overwhelmingly positive with only 5% of our sample either declining to give an opinion or saying they were not interested.
To test our conclusion we informed those who were previously unaware of the chocolate about it, and then asked if they would like to try it.
Both results seem to suggest a high likelihood of consumers seeking out the product once they are aware of it, at least for novelty value. But a further consideration for the success of ruby chocolate is price – though retail prices are coming down it has been significantly more expensive than mass market chocolate since it arrived on shelves.
Nestlé, who purchased a significant proportion of the raw chocolate from the manufacturer, have a ruby chocolate KitKat available in Tesco stores. Using our Reference Pricing Steer we first showed a slice of consumers who were already familiar with ruby chocolate an image of the regular four-finger KitKat, priced at £0.60. These consumers were then offered the four-finger ruby chocolate KitKat at various prices from £0.20 to £1.00 to gauge their willingness to buy the product at each £0.10 increment.
Assuming a unit cost of £0.40 (though the numbers hold true anywhere between £0.31 and £0.64), the profit-maximising price is £0.80. Tesco’s pricing team have obviously done their homework, because this is exactly what they’re selling for in store. It also demonstrates the ability of Nestlé to deliver an incremental category improvement with an innovative product that, as we saw above, generates significant interest among consumers.
Ruby chocolate has potential to become a much bigger part of the chocolate market, but the key will be in generating awareness among consumers, at which point natural curiosity takes over and delivers a high likelihood of that first sale.