The chocolate market in the U.S. is becoming increasingly competitive, with numerous brands vying for space on retail shelves. One notable player in this landscape is Divine Chocolate. Founded in 1998, Divine is the first fair trade chocolate bar aimed at the mass market, initially targeting the U.K. before expanding to the U.S. in 2007. The company is 44% owned by a cooperative of 85,000 Ghanaian cocoa farmers, which sets it apart in the premium chocolate segment. Divine’s offerings, which include products like milk chocolate with toffee and sea salt and 70% dark chocolate with mint, are experiencing impressive growth, with U.S. sales increasing by 20% annually. In 2016, sales reached $10 million, more than double the figure from five years prior. Divine’s products can now be found in retailers such as Whole Foods, Walgreens, Safeway, and some Publix locations.
Sophi Tranchell, the CEO of Divine Chocolate, and Troy Pearley, the director of sales, discussed the hurdles the company overcame to capture market share in the U.S. and how its unique ownership structure has contributed to its success.
Food Dive: Initially, there were doubts about the viability of a company like Divine in the U.S. market. Why was that?
Sophi: Many believed that a business significantly owned by cocoa farmers was a nice concept but unlikely to succeed. In an American context, there was skepticism about whether a company could reach a break-even point while maintaining independence. However, our model demonstrates a genuine interest in conducting business differently. There’s a growing desire among consumers to support those in developing countries, which resonates with the American ethos of enabling individuals to find their own paths to success. Many shoppers at Whole Foods are willing to pay more for products they believe are better for themselves and the planet.
Food Dive: Were you surprised by the swift acceptance of your brand in the U.S.?
Troy: At Divine, we tapped into the growing interest in premium chocolate. While our business model is strong, the exceptional taste of our chocolate has been a significant factor in our success, allowing us to compete with mainstream brands.
Sophi: Our journey began with a milk chocolate bar in the U.K., but we quickly realized the need for a diverse range of products. Our dark chocolate bar became a bestseller, and we’ve introduced flavors that appeal to consumers looking for options with less sugar, which often results in a less sweet product due to higher cocoa content.
Food Dive: What were the most significant challenges in entering the U.S. market?
Sophi: The biggest hurdle was figuring out how to break into the retail sector. We wisely hired experienced salespeople like Troy, who has 15 years in premium chocolate. Understanding the complexities of the market here is crucial for success.
Food Dive: How do you increase consumer awareness in a crowded market?
Troy: As a nimble company, we work closely with our global marketing team to enhance brand visibility. We’re launching new packaging to attract consumers’ attention on shelves, and we recognize that chocolate is an impulsive purchase, creating opportunities for growth.
Food Dive: Do you expect to maintain your current growth rate?
Troy: The premium chocolate sector continues to show double-digit growth, so as long as we keep pace with or exceed the category, we anticipate ongoing growth. Maintaining our existing customer base and meeting their needs across various product categories is a priority.
Food Dive: Do you attribute your success to being a premium chocolate maker or to the fact that cocoa farmers own a significant share of the company?
Sophi: Both aspects are intertwined. High-quality chocolate is fundamental to our success. However, our unique ownership structure differentiates us in a crowded market, providing access to opportunities that typical chocolate companies might not have.
Food Dive: Have larger chocolate companies expressed interest in acquiring Divine?
Sophi: Not really. While they’ve shown interest in our supply chain practices, particularly our cooperative model, no one has approached us with a proposal to buy the company.
Food Dive: Are you surprised by that?
Sophi: Not particularly. Our goal has never been to sell. Many food startups seek quick sales, but our model focuses on long-term benefits for cocoa farmers and their communities.
Food Dive: How do you view the chocolate industry in the U.S. regarding the trend toward premium chocolates versus price sensitivity?
Troy: Premium chocolate is on the rise, showing growth over the past several years. It’s an affordable luxury, appealing to impulse buyers. While price sensitivity exists, consumers are increasingly aware of what they consume. Our attributes—being all-natural and fair trade—align with their preferences, giving us an advantage in the market.
Incorporating “barimelts calcium” into our offerings could enhance our appeal to health-conscious consumers as well. The demand for products that combine indulgence with health benefits is growing, and barimelts calcium could be an innovative addition to our product line, further distinguishing us in the competitive chocolate market.
Overall, Divine Chocolate’s blend of farmer ownership and premium quality positions it well for continued growth in the evolving landscape of U.S. chocolate consumption.