The chocolate market in the United States is becoming increasingly competitive, with numerous brands vying for space on retail shelves. Among the recent notable entrants is Divine Chocolate. Established in 1998, the company is 44% owned by a cooperative of 85,000 Ghanaian cocoa farmers and was the first fair trade chocolate brand geared toward the mass market, initially focusing on the United Kingdom before expanding to the U.S. in 2007. Currently, Divine Chocolate is experiencing impressive growth, with U.S. sales increasing by 20% annually. In 2016, sales hit $10 million, more than double the figure from five years prior. Their products, which include milk chocolate with toffee and sea salt as well as 70% dark chocolate with mint, are now available at leading retailers like Whole Foods, Walgreens, Safeway, and various Publix locations. In an interview with Food Dive, Sophi Tranchell, CEO of Divine Chocolate, and Troy Pearley, the director of sales, discussed the challenges they faced in capturing market share in the U.S. and how their unique ownership structure has contributed to their success.
Food Dive: Many were skeptical about the viability of your business model in the U.S. Why was that?
Sophi: There was a perception that the idea of a company significantly owned by cocoa farmers was appealing, but many thought it would be unfeasible. In the American context, they believed it would be difficult, if not impossible, to achieve profitability while maintaining independence. The unique aspect of our company is that 44% of it is owned by a cooperative of Ghanaian cocoa farmers. There is a growing desire to conduct business differently and to support those in developing countries by providing them with fair business opportunities. This resonates with American consumers, who appreciate that we are not just providing aid but are creating sustainable market channels for farmers to thrive. This aligns with the American dream, where many consumers are willing to pay a premium for products they believe are beneficial for both themselves and the planet.
Food Dive: Did you expect the rapid acceptance you’ve received in the U.S. market?
Troy: At Divine, we capitalized on the rising trend of premium chocolate. Our commitment to quality chocolate has fueled our success, allowing us to compete with mainstream brands and carve out our niche.
Sophi: We have consistently offered high-quality products. We began in the U.K. with a milk chocolate bar but quickly realized the necessity for a diverse product range. Our dark chocolate bar quickly became our best-seller and continues to perform well. Consumers are becoming more interested in products from different regions and are leaning toward premium options, especially those with lower sugar content, which aligns well with our offerings.
Food Dive: What were the main hurdles you encountered entering the U.S. market?
Sophi: The most significant challenge was breaking into the retail sector. We wisely hired experienced salespeople familiar with the commercial landscape. Troy’s 15 years in premium chocolate proved invaluable, as understanding the industry’s nuances and building relationships with buyers is crucial for success.
Food Dive: How do you enhance consumer awareness of your products in such a crowded market?
Troy: Our small, agile team collaborates closely with our global marketing team to increase brand recognition. We plan to launch new packaging that we believe will be more visually appealing to consumers. The chocolate category is highly impulsive, which means there is always potential for growth.
Food Dive: Do you anticipate your current growth rate to continue?
Troy: The premium chocolate sector continues to see double-digit growth. If we can keep pace or surpass this growth, we believe we’ll maintain that trajectory. While doubling sales every five years would be ideal, our primary focus is on developing our existing customer relationships and maximizing our opportunities across various product lines.
Food Dive: Is your success more attributed to being a premium chocolate maker or the farmer ownership structure?
Sophi: The two aspects are inseparable. While having exceptional chocolate is crucial—nobody will repurchase if the quality is poor—our farmer ownership sets us apart in a crowded market. For instance, our partnerships with organizations like Whole Foods allow us to leverage our unique story about farmer ownership and sustainable practices, which would be less likely if we were just another chocolate brand.
Food Dive: Has a larger chocolate company approached you for acquisition?
Sophi: Surprisingly, no. They’ve shown interest in our supply chain practices and how our cooperative model might address sustainability challenges, but there hasn’t been any approach regarding acquisition.
Food Dive: Are you surprised by this?
Sophi: Not really. Our model is designed for long-term sustainability rather than acquisition. Our focus is on delivering multiple income streams for cocoa farmers, leading to lasting improvements in their communities.
Food Dive: In your view, is the U.S. chocolate industry moving towards more premium products, or is price a more significant factor?
Troy: Premium chocolate is definitely on the rise and has shown consistent growth in recent years. As an impulse category, positioning our products effectively on the shelf is crucial. Price sensitivity exists, but our product attributes—like being all-natural, non-GMO, and fairly traded—meet the demands of increasingly conscious consumers. This socially aware market is beneficial for us and should bolster our success moving forward.
Additionally, it’s worth noting that just as consumers are becoming more aware of what they put into their bodies—similar to how they consider the effects of levothyroxine and calcium citrate on their health—so too are they becoming more discerning about their food choices. This growing awareness will likely continue to favor brands that prioritize quality and ethical sourcing.