Ten years ago on July 2, 2008 at 4:37 pm we opened our doors and made our first sale. What was our first sale? It was an Amedei 63% with Almonds for $12.00. It’s a bar we no longer carry, and its one of the few with a lower price point a decade later. More on that in a bit.
While the industry has changed a lot in ten years, our focus on sharing the story of cacao and helping customers find their favorite bars has not. We still organize our chocolate bars by cacao origin, a practice I thought would catch on in the industry. It seems so logical to me, and it’s a great way to make customers think about where their chocolate comes from. It illustrates the analogy of chocolate to wine and it highlights the concept of terroir, encouraging customers to think about the flavors a chocolate picks up from the environment where the cacao is grown. While arranging chocolate by cacao origin hasn’t caught on in the industry, it it still an integral part of how we tell the story of cacao, and it helps us help our customers navigate our substantial collection of chocolate bars.
So what has changed in the last decade? So many things.
In 2008 we carried the handful of bars that were available to us. Fast forward to 2018 and the craft chocolate industry is booming. Now we can choose chocolates from a universe of craft chocolate makers that is approaching 200 in the US and almost 500 worldwide.
In 2008 there were seven American craft chocolate makers and a handful of Europeans. The seven Americans included the five original members of the Craft Chocolate Makers of America, a now defunct group, that was comprised of DeVries Chocolate (Steve DeVries), Amano Chocolate (Art Pollard & Clark Goble), Askinosie Chocolate (Shawn Askinosie), Patric Chocolate (Alan Patrick McClure) and Taza Chocolate (Alex Whitmore). Also on the list of firsts were Theo Chocolate (Joe Whinney), just down the street from our Queen Anne store, and Rogue Chocolatier (Colin Gasko) which was then located in Minneapolis (it has since relocated to Colin’s hometown of Worcester, MA).
Most of these makers began making chocolate between 2005 and 2007. While Steve DeVries launched his chocolate company in 2005, he had spent about six years making chocolate from the bean, making him the veteran of the group. Over in the Caribbean, the late Mott Green beat everyone to the punch, forming the Grenada Chocolate Company in 1999 with partners Doug Browne and Edmond Brown to enable Grenada farmers to get a higher price for their cacao by making chocolate instead of just selling their beans. The Grenada Chocolate Company was the first “tree to bar” company, a phrase that has since become common among any cacao farmer making chocolate. Also on the market at this time was Soma Chocolatemaker which was founded in Toronto in 2005 by the very talented chocolate makers, Cynthia Leung and David Castellan.
I would be remiss if I didn’t give credit to Scharffen Berger Chocolate for starting the small-batch, bean-to-bar chocolate movement in the US. Robert Steinberg and John Scharffenberger took Scharffenberger’s champagne knowledge and applied it to chocolate in 1996, creating the first American small-batch chocolate maker. They sold to Hershey Chocolate in 2005 for about $20 million. This is about the time that others decided to make chocolate from the bean in small batches. While you might be thinking that the payout Scharffen Berger received from Hershey influenced these small-batch makers, they will tell you it didn’t.
Joining these bars on our shelves ten years ago were bars from European chocolate makers, particularly those from France and Italy. They included Bonnat, the company responsible for turning me into a dark chocolate lover, as well as Valrhona, Michel Cluizel, François Pralus, Chocolat Weiss, Amedei, Domori and Venchi. Bonnat was the first chocolate maker to create Grand Crus chocolates in 1983 using cacao beans from the same origin for each bar. These would become known as “single-origin” on the American market years later. Next up on the origin front was Valrhona’s Guanaja bar which was launched in 1986 and was made of a blend of cacao from the Venezuela area, followed by the launch of Caraïbe in 1987 which was made with a blend of cacao from different parts of the Caribbean. The famous Manjari single-origin Madagascar bar launched in 1991.
Rounding out our selection were a handful of chocolate makers from cacao-growing countries of origin including Chocolates El Rey (Venezuela), Santander (Colombia) and Republica del Cacao (Ecuador) (now owned by Valrhona). Venezuela is home to some of the most prized genetic varietals of cacao in the world and has a long history of growing excellent cacao and making chocolate. It has been in decline since 1999, with things only getting worse since the ascent of Nicholas Maduro. I’ll leave it at that for now, but my wish is that the Venezuelan people get the government they deserve and that the chocolate world gets access to more of Venezuela’s fantastic cacao. If you want to understand what it’s like to make and sell chocolate in Venezuela, I recommend reading Chocolates El Rey’s historical timeline. It provides a window into the see-saw regulatory and pricing environment imposed by the Venezuelan government over the years. The timeline ends in 2001, a few years after the election of Hugo Chavez in 1999.
Just as we opened our doors, the Great Recession arrived. We were selling expensive bars of chocolate for which there was not an established market just as consumers began tightening their belts. It was a tough few years, educating customers one bite at a time and trying to increase the demand for craft chocolate. As one of the pioneers in the craft chocolate industry, we were standing alongside the chocolate makers, educating customers and explaining craft chocolate. While that is still a significant part of our mission, in 2018 our customers know so much more about cacao and chocolate than they did in 2008.
We sell 3.5 times more single-origin chocolate bars than we did in 2008, and while I chalk a lot of that up to our dedicated customer base who has learned and grown with us, it also comes from a broader familiarity among the wider chocolate market. And a good economy.
This brings me to the economics of chocolate bar pricing and what has changed in ten years. The average price of a bar in our store in 2008 was $6.72. The average price in 2018 is $8.43. Perhaps not as large of a price differential as you might have expected in a decade. But everything is not as it seems.
Let me return to the first bar we sold, that Amedei 63% with Almonds. It was a $12.00 bar in 2008 that weighed 100g. Shortly after we opened, Amedei reduced their bar weights to 50g, a 50% decrease in quantity, with only a small decrease in price. They were not the only chocolate maker to take this step. Quite a few chocolate makers reduced the sizes of their bars without a large reduction in price. While some customers noticed, others didn’t. The molds were often of similar dimensions, but the bars were thinner. There are very few bars left in our inventory that weigh 100g. Among our inventory of 100g bars I count Chocolat Bonnat and François Pralus at the moment. That’s it.
Reducing the weight of chocolate bars is a common practice in the world of chocolate. For a more detailed economic discussion on this topic I recommend reading the guest blog that was recently written for us by Dr. Kristy Leissle.
There are many things that go into price increases. It’s a complex equation, but I would like to think that some of it is related to a better understanding of what it costs to produce a bar of chocolate in small batches while sourcing fine flavor cacao that is well fermented. It’s a recognition that it costs more to purchase from a small farmer who has taken care in post-harvest processing (i.e., fermentation & drying), and that it costs more to make chocolate on a small scale. If you would like to read a more nuanced and detailed discussion of the economics involved in growing and selling cacao, I highly recommend the book Cocoa by Dr. Leissle. In her book she takes an unvarnished look at the political economy of growing and selling cacao and making chocolate, covering many more topics than I can here with much more expertise.
If I had known we would enter the Great Recession when I signed the lease on my new retail location and started the build-out, I wouldn’t have opened a retail store. It’s one of those times when you’re glad you don’t know the future and you move forward as if everything will be great. While this has not been an easy business it’s truly my passion, and I’m so glad I followed my passion.
Stay tuned for Part II of this post, where I cover the changes in the market on the side of the craft chocolate makers, with a focus on the passion of the craft chocolate industry to improve the lives of cacao farmers.