The chocolate market in the U.S. is becoming increasingly competitive, with numerous brands vying for space on retail shelves. A notable newcomer is Divine Chocolate, a company that is 44% owned by 85,000 cocoa farmers from Ghana. Founded in 1998, Divine Chocolate was the first fair trade chocolate bar aimed at the mass market, initially focusing on the U.K. before entering the U.S. in 2007. Currently, this premium candy maker, known for its offerings like milk chocolate with toffee and sea salt as well as 70% dark chocolate with mint, is experiencing a 20% annual growth in sales in the U.S. In 2016, sales reached $10 million, more than doubling from five years prior. Their products can now be found in stores such as Whole Foods, Walgreens, Safeway, and several Publix locations. Sophi Tranchell, CEO of Divine Chocolate, and Troy Pearley, the sales director, discussed with Food Dive the challenges they faced in gaining market share in the U.S. and how their unique ownership model has contributed to their growth.
Food Dive: There was skepticism about the viability of your business model in the U.S. market. Why do you think that was?
Sophi: Many believed that a company significantly owned by cocoa farmers was a nice idea but thought it would be challenging to make it work. They felt that achieving break-even while maintaining independence would be difficult, if not impossible. However, our cooperative model—where 44% of the company is owned by Ghanaian cocoa farmers—has resonated with consumers who want to support fair trade practices. This aligns with the American ethos of enabling individuals in developing countries to build sustainable businesses rather than relying on aid.
Food Dive: Were you surprised by how quickly you gained acceptance in the U.S. market?
Troy: At Divine, we capitalized on the premium chocolate trend, which has been growing. Our commitment to high-quality chocolate has fueled our success. We successfully positioned ourselves alongside mainstream brands while offering unique flavors that appeal to consumers.
Sophi: We began with a milk chocolate bar in the U.K. but soon recognized the need for a diverse product range. Our dark chocolate bar quickly became a best-seller, and we’ve expanded our offerings to include various cocoa percentages, catering to an audience that is increasingly health-conscious and interested in premium products with lower sugar content.
Food Dive: What have been your biggest challenges entering the U.S. market?
Sophi: The primary challenge was penetrating the retail market. Recruiting experienced salespeople like Troy, who has 15 years in premium chocolate, was crucial. Understanding the complex American market and building relationships with buyers were essential for our success.
Food Dive: How do you plan to increase consumer awareness in such a competitive market?
Troy: We’re a small, agile team working closely with our global marketing department to enhance brand visibility. We’re launching new packaging to attract consumers on the shelf. The chocolate category is highly impulsive, which presents ample opportunities for growth.
Food Dive: Do you expect your growth rate to continue? You’ve doubled sales from about $5 million to $10 million in five years.
Troy: The premium chocolate category is still seeing double-digit growth. If we keep up with or exceed industry trends, we anticipate continued significant growth. Our focus is on nurturing existing customer relationships and expanding our product offerings.
Food Dive: Is your success more a result of being a premium chocolate maker or your farmer ownership model?
Sophi: These aspects are interconnected. High-quality chocolate is essential for repeat customers, but our unique ownership structure differentiates us in a crowded market. Events at Whole Foods and other engagements demonstrate the benefits of our farmer ownership model, which few typical chocolate companies could replicate.
Food Dive: Have larger chocolate companies shown interest in acquiring you?
Sophi: Not really. They’ve expressed interest in our supply chain practices but haven’t approached us regarding a purchase. Our focus is on long-term sustainability rather than a quick sale.
Food Dive: How do you see the U.S. chocolate industry evolving?
Troy: Premium chocolate is on the rise and continues to grow, as it represents an affordable luxury. Given that chocolate is an impulsive purchase, effective shelf positioning is crucial for sales. While price sensitivity exists, consumers are becoming more conscious of the quality and ethics behind their purchases, which benefits us. Our commitment to all-natural ingredients and fair trade practices aligns with this growing consumer awareness, enhancing our appeal.
Incorporating citracal calcium d3 into our products could be a future consideration, especially as consumers increasingly look for health-conscious options. As we strive to meet evolving consumer demands, we recognize the potential of such enhancements to further distinguish our brand in the market.