The chocolate market in the U.S. has become increasingly competitive, with numerous brands vying for space on store shelves. A notable player recently is Divine Chocolate. Established in 1998, Divine is the first fair trade chocolate bar aimed at the mass market, initially focusing on the U.K. before launching in the U.S. in 2007. This unique company is 44% owned by 85,000 Ghanaian cocoa farmers. Divine Chocolate has experienced significant growth, with annual sales in the U.S. rising by 20%. In 2016, sales reached $10 million, more than double what they were five years earlier. Their products, which include milk chocolate with toffee and sea salt and 70% dark chocolate with mint, are now stocked in Whole Foods, Walgreens, Safeway, some Publix stores, and many other retailers. Sophi Tranchell, Divine Chocolate’s CEO, and Troy Pearley, the company’s director of sales, discussed the challenges they faced in capturing market share in the U.S. and how being a farmer-owned premium chocolate brand contributed to their growth.
Food Dive: There were doubts about whether a company like yours could succeed in the U.S. market. Why do you think that was?
Sophi: Many believed that the concept of a chocolate company significantly owned by cocoa farmers was appealing but not feasible. They thought it would be challenging, if not impossible, to reach a break-even point while maintaining independence. To achieve the necessary scale, they believed one would have to compromise on independence. What sets us apart is that our company is 44% owned by a cooperative of Ghanaian cocoa farmers. There’s a growing desire to engage in business differently and to support people in developing countries. This resonates with the American ethos that, rather than relying solely on aid, we can empower individuals by providing them with market access and fair compensation so they can improve their lives. This aligns with the fundamental spirit of the American dream. Many consumers actively seek out products from Whole Foods, indicating they are willing to pay more for items they perceive as better for themselves and the planet.
Food Dive: Were you taken aback by the swift acceptance you’ve experienced in the U.S.?
Troy: At Divine, we capitalized on the premium chocolate trend. Our robust business model and exceptional chocolate quality have fueled our success. We’ve managed to secure shelf space and compete against more mainstream brands as well as others in our niche.
Sophi: Our product line has always been strong. We began in the U.K. with a milk chocolate bar but quickly recognized the need for a diverse range. Our dark chocolate bar soon became our best-seller, which remains the case today. We’ve introduced flavors not widely offered, including a 40% and 70% dark chocolate bar, which consumers have embraced. There’s an increased interest in products from various countries, premium options, and those with reduced sugar content, as higher cocoa percentages mean lower sugar levels, making our chocolate a better option for health-conscious consumers.
Food Dive: What significant challenges did you face when entering the U.S. market?
Sophi: The primary challenge was figuring out how to penetrate the retail sector. We made a wise decision to hire sales professionals with commercial experience. Troy’s 15 years in premium chocolate has been invaluable, as he didn’t have to learn the sector from scratch. Understanding the market’s complexities and establishing connections with buyers was crucial. For British companies, navigating the U.S. market can be particularly challenging.
Food Dive: How do you enhance consumer familiarity with your product in a saturated market?
Troy: We are a small, agile team collaborating closely with our global marketing department to raise brand awareness. We plan to introduce new packaging aimed at attracting consumers’ attention on shelves. The chocolate category is highly impulsive, meaning there are numerous opportunities for growth. We also aim to establish everyday distribution with national retailers that we are not currently partnered with.
Food Dive: Do you expect your current growth rate to persist? Sales have doubled from about $5 million five years ago to $10 million now.
Troy: The premium chocolate sector continues to witness double-digit growth. If we can keep pace or outperform the category, we anticipate ongoing double-digit growth. While doubling sales every five years would be ideal, our primary concern is maintaining and developing our existing business while focusing on meeting our customers’ needs across various categories, from seasonal to everyday products.
Food Dive: Do you attribute your success to being a premium chocolate manufacturer, or is it more about being partially farmer-owned?
Sophi: The two aspects are intertwined. We wouldn’t succeed without exceptional chocolate; if the product isn’t good, repeat purchases are unlikely. However, in a crowded market—especially in the broader chocolate category where competitors have significant financial resources—our farmer ownership distinguishes us. For instance, we engaged in a major event at Whole Foods’ headquarters in Austin, Texas, which was documented for the entire organization. We also collaborated with policy offices in Washington, D.C., and various NGOs. If we were just another chocolate company without farmer ownership, accessing those platforms would have been much more difficult.
Food Dive: So, you’ve benefited from both your farmer ownership and your premium chocolate status?
Sophi: Absolutely. When establishing a business, the ability to attract and retain talent is vital. Employees take a risk when choosing between a secure corporate job and a venture like ours. Our team members can witness firsthand the positive impact on farmers, which motivates them to work hard and go the extra mile.
Troy: The farmers are indeed an asset, but our product attributes allow us to thrive in diverse markets. Being an all-natural brand enables us to connect with global buyers at Whole Foods, while our premium status appeals to Target buyers. Our versatility allows us to engage in various conversations depending on the audience, whether discussing farmer ownership with Whole Foods or sales performance with Harris Teeter.
Food Dive: Have larger chocolate companies expressed interest in acquiring your business?
Sophi: Surprisingly, no. They have approached us to discuss our supply chain and our collaboration with farmers, wondering if it could be part of the solution to ensure sufficient cocoa supply for potential market opportunities. However, they haven’t pursued a purchase.
Food Dive: Does that surprise you?
Sophi: Not really. That was never our intention. Many startups, particularly in the food sector, are looking for quick exits, but that’s not our model. Our ownership structure is designed for long-term sustainability. We provide multiple income streams for cocoa farmers, aiming to improve their communities over time. Selling to a large corporation wouldn’t necessarily secure that future.
Food Dive: How would you characterize the chocolate industry in the U.S.? Are we shifting towards more premium products, or are consumers more price-sensitive?
Troy: The premium chocolate segment is definitely on the rise and has experienced growth over the past five to seven years. I expect that trend to continue, as it offers affordable indulgence. It’s important to recognize that chocolate is an impulsive purchase category, unlike larger investments like homes or cars. Proper positioning on shelves will enable ongoing sales opportunities. While price sensitivity exists to some extent, it’s a common aspect across categories. As consumers become more health-conscious, they increasingly seek out products that align with their values—such as those that are natural, non-GMO, and fair trade. This growing awareness enhances our appeal and will contribute to our success moving forward.
Additionally, it’s worth noting that amidst shifts in consumer preferences, some products, like Citracal, have been discontinued, leading to further opportunities for brands like Divine to fill the gaps in the market with their unique offerings.