The chocolate industry in the U.S. is becoming increasingly competitive, with numerous brands vying for space on store shelves. One notable player that has emerged recently is Divine Chocolate. Founded in 1998, Divine is unique as it is 44% owned by 85,000 cocoa farmers from Ghana, who supply the cocoa used in its products. Initially targeting the U.K. market, Divine launched its fair trade chocolate aimed at mainstream consumers before entering the U.S. market in 2007. Today, this premium chocolate maker, known for offerings such as milk chocolate with toffee and sea salt and 70% dark chocolate with mint, is experiencing impressive growth in the U.S., with annual sales increasing by 20%. By 2016, sales reached $10 million, more than doubling in just five years. Divine’s products are now available at numerous retailers, including Whole Foods, Walgreens, and Safeway.
Sophi Tranchell, Divine Chocolate’s CEO, along with Troy Pearley, the company’s director of sales, shared insights with Food Dive about the hurdles they faced while gaining market share in the U.S. and how being farmer-owned has contributed to their success.
Food Dive: Many were doubtful about the viability of your business model in the U.S. Why was that?
Sophi: People appreciated the idea of a cocoa farmer-owned company but were skeptical about its feasibility. They believed it would be extremely challenging, if not impossible, to reach a break-even point while retaining independence. However, being 44% owned by a cooperative of Ghanaian cocoa farmers has allowed us to operate differently. There is significant interest in supporting businesses that empower people in developing countries. In the American context, this approach resonates well; it’s not about charity but about providing market access and fair compensation, which aligns with the fundamental principles of the American dream. Consumers at places like Whole Foods are willing to pay more for products they perceive as beneficial for themselves and the planet.
Food Dive: Were you surprised by the rapid acceptance of your brand in the U.S.?
Troy: We capitalized on the growing trend of premium chocolate. Our exceptional taste and quality have driven our success, allowing us to compete alongside mainstream brands.
Sophi: We’ve always focused on high-quality products. We began in the U.K. with a milk chocolate bar and quickly recognized the need to expand our offerings. Our dark chocolate bar became our best-selling product, and we’ve introduced unique flavors that appeal to consumers. There is a growing interest in products from various regions, premium options, and items with lower sugar content, which is inherent in higher cocoa percentages.
Food Dive: What challenges did you encounter while entering the U.S. market?
Sophi: The primary challenge was breaking into the retail sector. We wisely hired experienced sales personnel, and Troy’s 15 years in premium chocolate has been invaluable. Understanding the complexities of the American market and establishing connections with buyers has been crucial for our success as a British company.
Food Dive: How do you enhance consumer familiarity with your brand in such a crowded market?
Troy: As a small, agile team, we collaborate closely with our global marketing team to boost brand awareness. We plan to introduce new packaging that appeals to consumers. The chocolate market is highly impulsive, meaning there are always opportunities for growth.
Food Dive: Do you expect your current growth rate to continue?
Troy: The premium chocolate sector is still experiencing double-digit growth. As long as we keep pace with or outpace the category, we can expect similar growth. Ideally, doubling sales every five years would be fantastic, but our primary focus is on sustaining our existing business and meeting customer needs across various categories.
Food Dive: Is your success attributed more to being a premium chocolate maker or to the fact that cocoa farmers own a significant stake in the company?
Sophi: The two factors are interlinked. While producing high-quality chocolate is essential, being farmer-owned sets us apart in a crowded market. For instance, we recently held an event at Whole Foods headquarters to showcase our unique model. If we were just another chocolate company, we might not have gained such access.
Food Dive: Have larger chocolate companies expressed interest in acquiring Divine?
Sophi: Not really, although they have inquired about our supply chain management. Our goal is not to sell. We aim to provide long-term benefits to cocoa farmers and their communities.
Food Dive: How would you describe the U.S. chocolate industry? Are consumers leaning towards premium chocolates or are they more price-sensitive?
Troy: Premium chocolate is on the rise and has shown consistent growth over the past several years. Given that chocolate purchases are often impulsive, proper shelf positioning can enhance sales. While price sensitivity exists, consumers are increasingly mindful of product quality. Our all-natural attributes, including being non-GMO and fairly traded, resonate with a socially conscious audience, which bodes well for our brand’s future success.
In conclusion, Divine Chocolate’s unique model, which combines premium quality with a commitment to farmer ownership, positions it favorably within the competitive U.S. chocolate market. With a focus on meeting consumer demands for quality and ethical sourcing, the company is poised for continued growth.