Why it matters:
- For Alter Eco, a desire for better-for-you sweet indulgences has driven 20% growth in sales, four times more than the chocolate category overall.
- Long a staple in natural food stores, the company is pushing distribution in conventional supermarkets to meet consumer demand.
- Shifting behaviors among Gen Z and emerging Gen Alpha, who prioritize values as well as taste, is driving significant social media buzz for mission-forward brands.
Alter Eco has a lot on its side right now. For one thing, it's chocolate—the darling of the treat world. Plus, what business intelligence firm Euromonitor calls the snackification of meals has for the past several years been changing how consumers eat. And finally, a younger consumer group is emerging who not only want to treat themselves but also care deeply about the environmental sustainability and transparency—commitments Alter Eco’s line of chocolate bars and truffles was built on. It's all working together to make this 21-year-old U.S. brand with a mission decidedly buzzy.
Alter Eco’s indulgence-fueled growth coincides what’s been dubbed "treatonomics," or “the treat economy." Consumers today, navigating uncertain times, are treating themselves to purchases at affordable-luxury price points that satisfy a craving for a decadent treat, from premium fragrances to organic chocolate bars.
‘Bring them in by the taste and, when they are on board, you have permission to tell them about the other things’
Consumers report wanting better-for-you snacks, said Keith Bearden, who assumed the helm as CEO of Alter Eco in 2023 after serving on its board of directors since 2020. (Prior to that, he was an advisor to NextWorld Evergreen, which purchased Alter Eco from its original founders in 2017.) And they are doing more snacking as small bites throughout the day continue to usurp traditional three-meal behavior. According to Alter Eco’s data, about 35% of the U.S. population snacks three times per day. For women, it’s four times per day. And chocolate is consistently one of those snacks.
Dubbing itself the cleanest, greenest snacks on earth, Alter Eco is an organic chocolate brand seeking to reverse climate change, regenerate ecosystems, and empower farmers. Through farming co-ops, Alter Eco works with small-scale fair-trade farmers (16,000 in total) whose average farm is 12 to 15 acres. It touts certifications including USDA Organic and GF Gluten-free, and it’s a Certified B Corp—all in line with what resonates with a growing number of Gen Z and now Gen Alpha consumers.
Even with that roster, navigating a balance between consumers’ reported sustainable consciousness and desire for indulgence ultimately is what drives success. “Taste is the price of admission,” Bearden said. “I tell my R&D [research and development] team not to bring me anything where the taste won’t blow me away.”
It’s a point that was underlined for Bearden when interviewing a new marketing director who challenged him to describe Alter Eco in one word. Delicious was the correct answer, beating out organic and sustainable. “She pointed out that Alter Eco had always been such a serious brand,” he recalled. “And with good reason; addressing issues like farmer welfare and climate change are all serious topics. But it’s not why people buy chocolate. You bring them in by the taste and, when they are on board, you have permission to tell them about the other things.”
[Read more: Global Flavor Trends Drive New Sweet and Salty Snack Innovations]
[T]he snackification of meals has for the past several years been changing how consumers eat...And chocolate is consistently one of those snacks.
The ‘say-do gap’ is closing with shifting consumer behavior
Younger consumers are shifting long-held behaviors. Bearden refers to a conversation with market researcher Nielsen about what they coined the “say-do” gap: “Boomers reported they wanted to eat healthier, but did differently. With millennials, that gap closed; with Gen Z, it closed more. With Alphas, there is no gap,” he told CO—.
And they want transparency. Retailers have monitored behaviors in the aisle, and this is a generation with their phones out, scanning QR codes to understand more about the brand’s impact and story, he continued.
The younger shoppers may not be the ones buying the most: Boomers and millennials still have the most money, Bearden pointed out. “But Gen Z and Alphas are making the most noise.”
That’s a fact that is generating significant social media buzz for Alter Eco. Case in point: Last spring, Poosh, Kourtney Kardashian’s marketing venture, invited Alter Eco to be part of Camp Poosh 2025, a three-day event during weekend one of Coachella. Their activation: a custom s’mores cart offering elevated treats with Classic Blackout, Burnt Caramel, and Sea Salt chocolate bars paired with cookies and vegan marshmallows.
Nearly 80% of Alter Eco’s Instagram is user-generated content. “Once Zs and Alphas try the chocolate and love it, they want to know more and they want to tell the world,” said Bearden. Alter Eco isn’t paying influencers to keep content authentic but will run contests and host pop-up stores to generate excitement.
[Read more: Scents of Change: Generation Z and Men Drive Fragrance Boom]
A push into traditional retail: ‘If you can get into conventional supermarkets, you’re offering those shoppers a choice of better-for-you products’
Alter Eco’s consumer focus on the brand as a better-for-you indulgence has helped lead impressive market segment growth. Sales jumped 20% last year while the chocolate category overall only grew between 4% and 6%, said Bearden. The company’s growth pillars are expanded distribution and line extensions while holding steadfast to its mission.
When Alter Eco launched, it was “laser focused” on being a natural and organic brand, said Bearden, and that meant Whole Foods as well as other natural markets. While natural is still a successful channel, Bearden has pushed hard to expand into conventional supermarkets. “Now you see these types of products in Kroger, Publix,” he noted. “It hasn’t impacted sales at the Whole Foods of the world. Those customers are [still] those customers. But if you can get into conventional supermarkets, you are offering those shoppers a choice of better-for-you products.”
Alter Eco’s most recent product expansion starts with its perhaps lesser-known granola. Inspired to see chunks of granola coming out of the oven before it was broken up, Bearden, at the suggestion of a production manager, dipped the bottom in Alter Eco chocolate. Knowing they had a winner, the new product is just rolling out and will be hitting retail shelves in the coming months.
‘You can’t only be about doing good in the world. You must have another value proposition… And don’t be afraid to charge for it.’
Differentiate yourself, Bearden advised startups with a mission-driven brand. “You can’t only be about doing good in the world. You have to have another value proposition, whether it is taste, or your product solves a problem. And if it does, and you are doing good in the world, don’t be afraid to charge for it,” he said.
Bearden pointed to many new companies who think they will start out with a low price to get trials and, when people love it, they will raise the price. “That never works,” he cautioned. “Retailers push back; new customers will be hesitant to come on board. Don’t undervalue your product. Look at the value it creates and tell everyone why you charge what you do.”
“You can only sustain the mission if it’s profitable,” he emphasized.
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