* Companies scramble to innovate as sales stagnate
* More consumers seeking healthier, premium chocolate bars
* Confectioners look to wine and coffee for inspiration
By Ana Ionova
LONDON, Dec 19 (Reuters) - Raw chocolate KitKats, Dark Milk, vegan bars with quinoa and now "ruby" chocolate: the world's biggest chocolate makers are looking for ways to keep increasingly health-conscious consumers coming back for more.
Sales of mainstream milk chocolate bars have stagnated as consumers worried about obesity and heart disease turn to snacks with less sugar and fat, or hold out for the occasional indulgent splurge on expensive, high-end chocolate.
The shift in attitudes is forcing global firms from Mars Inc. to Mondelez International to Nestle to rebrand or reformulate their mass-market chocolates to create a healthier image, or sell a more expensive premium experience.
Smoother dark chocolate bars, protein bars with chocolate, sugar-free chocolate and single-origin chocolate are an answer to consumer demand for healthier and higher-quality bars, the companies say.
Critics of the confectionery industry say the new products are gimmicks to boost sales by giving a premium feel or a "healthy halo" to snacks still high in sugar and fat.
The companies want to find growth somewhere. The volume of confectionery products sold worldwide rose just 0.5 percent in 2016-17 after falling for two years, according to research company Euromonitor International.
"It's going to be very difficult to persuade consumers to buy more chocolate," said Wiebke Schoon, food analyst at Euromonitor. "But they are open to being convinced to have better chocolate, to spend more money on it."
While the volume of chocolate sales has been largely static, the value of sales rose 3.6 percent in 2016-17, according to Euromonitor, suggesting consumers may be prepared to pay more for chocolate they believe is healthier or better quality.
"Natural, locally-sourced ingredients are and will continue to be at the heart of what people are looking for," said Sandra Martinez, Nestle's global head of chocolate and confectionery. "Combined with that artisan flair."
The Swiss food giant, which sells $8.8 billion of confectionery a year, has turned to so-called chocolatories to try to turn its mass-market KitKat bar into a luxury, personalised product - with a premium price.
At boutiques in Japan, chefs conjure up creative recipes and customers can buy KitKats in more than 10 flavours including matcha, strawberry maple and Japanese citrus.
They can also buy KitKats made from premium dark, milk and raw - less processed - chocolate, or print a message on white chocolate bars and wrap them in custom packaging.
"It's cool to have your name on confectionery," said Shiho Sudo, 20, in a KitKat boutique in Tokyo, holding a trio of white chocolate wafers with her name and birthday printed in gold-coloured letters. "This is a special gift for myself."
To print a message on three KitKat wafers costs nearly 2,600 yen ($23) while a regular KitKat costs 100 yen ($0.89).
Nestle says the boutiques have been successful in taking KitKat upmarket. It is rolling out similar shops across Asia and has trialed pop-up versions in Europe with a view to making them permanent.
Rival Mondelez, which owns well-known brands such as Cadbury Dairy Milk, Cote d'Or, Milka and Toblerone, is also looking to make mainstream products appeal to more demanding consumers.
Mondelez is trying to widen the appeal of its premium dark chocolate brand Green & Black's by expanding in the United States and launching a Velvet edition in Britain that offers consumers a smoother, less bitter taste.
"It brings dark chocolate a little bit more to the mainstream," said Mary Barnard, president of Mondelez International's chocolate business in Europe.
While there is doubt over whether dark chocolate has health benefits, the perception it is healthier than milk chocolate has prompted a 31 percent rise in dark chocolate product launches in the past four years, according to market research firm Mintel.
In countries such as Australia and Russia, Mondelez has begun marketing high-cocoa versions of its mainstream bars such as Cadbury and Milka under the label Dark Milk.
Mars - the chocolate retail market leader according to Euromonitor - launched Dove Peanut Butter & Dark Chocolate Promises as well as Twix Dark in North America this year.
Large confectionery companies are also venturing into snack and cereal bars including chocolate, seeking to take advantage of growing global demand for healthier snacks.
According to Euromonitor, the volume of snack bar sales has risen an average 2.6 percent a year for the past five years and is expected to grow 2.4 percent a year going forward.
While these snacks are often smaller than traditional chocolate bars, they typically earn companies a bigger margin.
This year, Mars unveiled its goodnessKNOWS snack bars in Britain, its biggest product launch in the country in two decades. The bar, split into three bite-sized pieces, is made of nuts, dried fruit and dark chocolate.
Mars, which makes M&Ms and Snickers bars, has also taken a stake in KIND, the third-biggest maker of snack bars worldwide.
Other chocolate makers have turned to creating recipes with ingredients geared towards health-conscious consumers.
Germany's Ritter Sport, for example, has launched vegan chocolate with grains such as quinoa and amaranth and is working on a vegan "milk" chocolate bar, using a dairy substitute.
Emma Calvert, food policy officer at the European Consumer Organisation lobby group, is sceptical, however, about the health drive by major chocolate makers.
"For us, this is a marketing tool rather than any strategy to actually help improve the health of consumers," she said.
"They might be using coconut oil for fat or agave syrup instead of sugar," said Calvert. "But it's still a type of sugar and would contribute to your excess calories. It's a way to give a healthy halo to products that really shouldn't have it."
Some niche chocolate makers are focusing on a combination of luxury and health.
At Rabot 1745 in London, a cafe, restaurant and shop owned by Hotel Chocolat, bars with cocoa beans from a defined part of the company's Saint Lucia plantation are sold alongside sugar-free 65 percent chocolate made with buffalo milk.
Angus Thirlwell, co-founder and CEO of Hotel Chocolat, a British company with more than 70 outlets across the country, hopes different kinds of cocoa beans will attract the same premium value attached to certain coffee beans or grapes.
"The wine world has achieved a much better balance between growing grapes and the added value of the final product," he said. "Chocolate has lost its way but is finding it again."
While companies such as Hotel Chocolat source specialty cocoa with a more distinct flavour from Ecuador or Brazil, most mainstream chocolate is made from mass-processed beans grown in Ivory Coast and Ghana, the world's top two producers.
The beans are usually mixed together without regard for whether cocoa from different trees or plantations can produce varied tastes, textures or colours.
But this could be changing. Barry Callebaut, the world's leading provider of chocolate products for businesses, unveiled a new type of chocolate this year with a pink hue and fruity taste: ruby chocolate.
Barry Callebaut determines if beans have the properties that make ruby chocolate by testing cocoa pods on plantations for particular genetic properties.
"The market is moving more towards understanding taste," said Bas Smit, head of global marketing for Barry Callebaut. "It's about hunting for the unique."
$1 = 112.6500 yen Reporting by Ana Ionova; additional reporting by Osamu Tsukimori in Tokyo, Marcy Nicholson in New York and Silke Koltrowitz in Geneva; editing by David Clarke