Recipe for success. Find the right export partner8th Oct '17
Rebecca Burn Callander meets a chocolate retailer bringing premium Fairtrade products to a growing Asian middle class. In choosing a distributor, the company went with the partner that provided a detailed breakdown of how long a customer would have to work to afford a bar
Company: Divine Chocolate Trading in: Taiwan, Japan and South Korea Sector: Confectionery
“It's useful when you find a partner than can work out routes to market for you, so that you don't have to reinvent the wheel”
Chocolate is seen as a tasty treat all over the world. But exporting premium varieties overseas is trickier than you might think.
“Chocolate melts,” explains Sophi Tranchell, Managing Director of Divine Chocolate. “You forget that when you live in the UK, where chocolate bars live in the ambient grocery aisle.”
When Tranchell unveiled a bold new export strategy last year, which aims to take the brand’s Fairtrade chocolate bars to the global marketplace, she quickly realised that many international distributors were blissfully unaware of the issue.
“Chocolate needs to be stored at below 18 degrees,” she says. “We turn down an awful lot of partners who want to take our products into territories that are hotter than that, but who don’t have refrigerated transport and warehousing, or where the shops at the other end aren’t air-conditioned. Melted and reset chocolate just doesn’t taste as good, and we don’t want people to have a negative experience with our products.”
Melting chocolate may be one of Divine’s biggest export challenges, but it is also one of its greatest strengths. “Premium chocolate is popular partly because of the fact that it melts in the mouth,” says Tranchell. “That’s what people love, and it’s what sets it apart from some cheaper versions on the market, which contain emulsifiers that prevent them from melting.”
The proof is in the pudding, and London-based Divine has now secured export partners in the US, Canada, Sweden, Norway, Denmark, Netherlands, Czech Republic, Turkey and Australia. Asia is a particular focus for the company, which has now launched in Taiwan, Japan and South Korea.
“A distributor approached us to sell Divine products in Starbucks Korea,” says Tranchell. “It's useful when you find a partner than can work out routes to market for you, so that you don't have to reinvent the wheel.
"We’ve noticed that our chocolate does well in territories that boast a growing middle class,” she continues. “Chocolate is expensive. You need to know whether your customer can afford your product.”
In 2009, Asia was home to 525m people who were categorised as “middle class”, representing around 28 per cent of the global total, according to the Organisation for Economic Co-operation and Development (OECD). However, by 2030 Asia will represent 66 per cent of the global middle-class population and 59 per cent of middle-class consumption across the globe.
It’s important for premium brands to understand the earning power of their target consumer, says Tranchell. When Divine was choosing a distributor to take its products into Singapore, Hong Kong, China and Taiwan, the company went with the partner that provided a detailed breakdown of exactly how long a customer would have to work to afford a bar of chocolate.
“They had a lot of experience in developing premium food brands,” says Tranchell. “It’s really important to ask your export agency really tough questions and make sure they really are as good as they say. You have to kiss a lot of frogs before you meet your Prince Charming.”
As tempting as it is to go at it alone, it is important to work with an agent or distributor when tackling complex markets, such as Japan, she adds. “Japan had terrible experiences with dairy after the Second World War, so they are very careful with dairy products now. The level of compliance you have to show is incredible. If you’re a small company, like us, you’ll need help.”
Founded in 1998, Divine created the first ever farmer-owned Fairtrade chocolate bar aimed at the mass market. Its co-operative of cocoa farmers in Ghana owns shares in the company. This social mission and ethical stance has opened doors for the brand all over the world. “In the Far East, we’ve seen a huge interest in Fairtrade and social enterprise,” says Tranchell. “We’ve had lots of delegations coming over to visit us, looking to learn from our model.”
From the Mayor of Seoul to university students from China, Divine has welcomed any would-be scholar of social enterprise to come and see how the company operates. This interest has generated sales leads, especially when Divine flies over its Ghanaian farmers to talk about the chocolate they produce. “We meet all of our customers, and we like to let our farmers speak for themselves,” says Tranchell.
One last tip, she says, is to pay close attention to portion sizes. “In Britain we’ve always eaten a lot of 200g bars. But outside the UK, that seems huge. In Asia, they want smaller bars. Get the portion right when exporting to new territories, don’t assume that the same product, or even the same recipe, will automatically work overseas.”