- If you like your chocolate bars in the traditional shape and size, you may be paying 40% more than for other common sizes.
- But it’s not quite that simple – bags of miniature boxes of Smarties, for example, are 22% more expensive per gram than standard boxes.
- This is because chocolate makers consider multiple factors when determining prices – including whether you’re going to eat them in the checkout aisle or take it home for your family.
- There are, however, some patterns that you can pick out if you’re looking to save money on your next chocolate purchase.
- Twix and Tex, for example, are cheaper as miniatures. Snickers are usually cheaper in their 80g Duo packs.
- Here’s how chocolate companies price their items – and which sizes to go for if you’re looking to save.
- For more stories go to www.BusinessInsider.co.za.
How much you pay for a chocolate bar depends on several factors that start with its ingredients, recipe, and distribution and end in its sales and marketing.
How much each factor plays in the final price you see on shelves is a closely guarded secret – and it’s anything but predictable, even across similar products by the same company.
There are arguably more important questions to answer in the world than how to save a few rands on your favourite chocolate bar, and an analysis of this may sink to a new level of petty cent counting. But to gain some clarity on the best chocolate sizes to buy, Business Insider South Africa calculated the price per gram across all sizes of six popular chocolates currently for sale in South African supermarkets.
Tex, Twix, Snickers, Bar-One, and Smarties are available in multiple size packs – single bars of 40 to 50 grams, the old-school standard size bar, and bite-size miniatures that you can only buy in 150 to 210-gram bags.
Rather than a clear and predictable pricing strategy across the various product lines, Business Insider found very few distinct patterns.
Some chocolate bars are cheapest when you buy them in a bag of miniatures, which might make sense given the higher capital outlay for these bags over smaller bars. These bags usually require you spend up to R40 on chocolate. But that doesn’t explain why some miniatures are much more expensive per gram than other sizes – unless you consider that these may require more packaging than individual bars.
And in the case of some products like Smarties, the manufacturer is actually penalising you for buying more products in one go than if you bought a single small box for less than half the price.
Determining the cost of a chocolate bar
According to Gawie Roodt, director at Africa Industrial Engineering Services, the reason for these multiple sizes and prices is anything but arbitrary. Instead, it’s the result of careful calculations determined through a process called value stream mapping.
Value stream mapping charts the flow of products from the supplier to the customer and helps companies determine the end prices of individual items.
Roodt says the steps companies go through to make the chocolates are important cost factors, as is the recipe. But he also points out that people buy chocolate in different sizes for different reasons.
“The different size offerings are certainly playing an important role from a marketing strategy, as consumers buy for consumption – either immediately or for the family,” Roodt told Business Insider.
Roodt says the recipe is the initial starting point for setting the price of a product like a chocolate bar – this will take into account the type of ingredients and the processes required to produce the product.
Manufacturers will then factor in the cost of packaging, from individual wraps to boxes or bags, and then boxes again. A few cents extra per product in the packaging phase can significantly impact the final selling price on the shelf, Roodt says.
Roodt says handling is also a significant expense.
“Operational automation, technology and people combinations are normally a huge cost in the process,” he says.
However, these costs don’t end once companies have made and packaged their chocolates. They must still factor in the price of distributing the products to distribution centres around the country, which Roodt says is a very high component.
Finally, there’s also what Roodt calls “cost of quality”, which includes internal waste, returns, shelf life, and storage conditions.
And because there’s no regulation of the chocolate bar industry, Roodt says there’s often a lot of end-price variation for consumers.
The final price that companies sell to supermarkets is also critical – from a profit margin and marketing perspective.
Pricing strategies play a role in the overall positioning of the specific product. Although they likely come out of the same factory, Bar-Ones are cheaper than many other Nestle products. Although this might be because one of the factors in Roodt’s list are lower for this product, it could also be a clear decision to position this at a specific price point in the market.
When pricing items like chocolate bars, some companies go for broad market share and price their products cheaply to achieve this. Others may want to be perceived as a premium product, despite manufacturing costs, and will price their products higher.
The sweet and chocolate aisle is also heavily impacted by shrinkflation, which means that although the price of the individual products might not be rising, you may be getting less product for your money.