The chocolate market in the U.S. is becoming increasingly competitive, with numerous brands vying for space on retail shelves. A notable player that has emerged recently is Divine Chocolate. Founded in 1998, Divine is distinctive as it is 44% owned by 85,000 Ghanaian cocoa farmers, marking it as the first fair trade chocolate bar targeting the mass market, initially in the U.K. before expanding to the U.S. in 2007. The premium chocolatier, offering products such as milk chocolate with toffee and sea salt, as well as 70% dark chocolate with mint, is witnessing annual sales growth of 20% in the U.S. By 2016, its sales reached $10 million—more than double the revenue from five years prior. Divine’s products are now found in retailers like Whole Foods, Walgreens, Safeway, and select Publix stores.
In a recent interview with Food Dive, Sophi Tranchell, CEO of Divine Chocolate, and Troy Pearley, the sales director, discussed the challenges they faced in capturing market share in the U.S. and how the company’s unique ownership structure has facilitated its growth.
Food Dive: People were initially doubtful about the viability of a company like yours in the U.S. Why was that?
Sophi: Many believed that a business significantly owned by cocoa farmers was a charming concept, but they doubted its practicality. They often asserted that achieving a break-even point while maintaining independence would be incredibly challenging, if not impossible. However, the unique aspect of our company is that it is 44% owned by a cooperative of Ghanaian cocoa farmers. There is a growing desire among consumers to support businesses that operate differently and empower people in developing countries. This resonates particularly in the U.S., where the focus is on providing channels to market and ensuring fair compensation, allowing communities to thrive independently. This aligns with the American dream—many consumers are willing to pay a premium for products they perceive as beneficial for themselves and the planet.
Food Dive: Were you surprised by the rapid acceptance you’ve experienced in the U.S.?
Troy: At Divine, we capitalized on the trend towards premium chocolate. Our strong product taste has helped us succeed. We have been able to secure shelf space and compete with mainstream brands.
Sophi: We started with a milk chocolate bar in the U.K. but quickly realized the need for a diverse product range. Our dark chocolate bar swiftly became our bestseller, and we’ve introduced unique flavors that have resonated with consumers, who are increasingly interested in premium and lower-sugar options. Higher cocoa content naturally means less sugar, making our products a healthier choice.
Food Dive: What significant obstacles did you encounter when entering the U.S. market?
Sophi: The primary challenge was penetrating the retail market. We made a smart move by hiring experienced sales personnel. Troy’s 15 years in the premium chocolate sector has been invaluable, as he already understands how this industry operates and has established relationships with key buyers.
Food Dive: How do you raise consumer awareness of your brand in such a crowded market?
Troy: We are a small, agile team working alongside our global marketing team to enhance brand recognition. We’re set to unveil new packaging designed to catch consumers’ eyes on the shelf. Chocolate is an impulse-buy category, so there are always opportunities for growth.
Food Dive: Do you anticipate maintaining your current growth rate?
Troy: The premium chocolate sector continues to experience double-digit growth. As long as we can keep pace or even exceed the category’s growth, we can expect similar results. While doubling sales every five years would be ideal, our focus remains on nurturing existing customer relationships and maximizing opportunities across different categories.
Food Dive: Do you believe your success stems more from being a premium chocolate maker or from the fact that your cocoa farmers own a significant share of the company?
Sophi: The two aspects are intertwined. Our success hinges on producing high-quality chocolate, as poor products won’t lead to repeat purchases. In a saturated market, farmer ownership differentiates us. For instance, we hosted an event at Whole Foods headquarters, which allowed us to showcase our unique story and practices, including our cooperative structure and literacy programs in West Africa. If we were just another chocolate company without farmer ownership, such access would have been far less likely.
Food Dive: Have you been approached by larger chocolate companies looking to acquire you?
Sophi: Not really. While they have shown interest in our supply chain practices, particularly our cooperative model, there hasn’t been any serious acquisition discussion.
Food Dive: Are you surprised by this?
Sophi: Not really. Our aim has never been to sell. Many startups, especially in food, seem to want to sell quickly, but that isn’t our model. Our ownership structure focuses on long-term sustainability and delivering income streams for cocoa farmers, which ultimately improves their communities. Selling to a large corporation doesn’t necessarily secure that future.
Food Dive: How would you describe the U.S. chocolate industry? Are we moving towards more premium options, or is price the primary concern for consumers?
Troy: Premium chocolate is definitely on an upward trajectory, showing consistent growth over the past few years. Given that chocolate is an impulse category, proper shelf positioning will allow us to continue selling our products. While price sensitivity exists, it affects all categories. Consumers are becoming increasingly conscious of their purchases, which aligns with our product attributes—natural ingredients, non-GMO, and fair trade practices. This awareness adds an extra layer of appeal, enhancing our chances for future success.
In summary, Divine Chocolate’s growth can be attributed to its commitment to creating high-quality products while being partially owned by cocoa farmers, which resonates with the socially conscious consumer. As the market for premium chocolates continues to expand, Divine is well-positioned to thrive.