I should cocoa: how Hotel Chocolat became a £534m prize for Mars
Angus Thirlwell, who co-founded Hotel Chocolat, has expressed his strong belief that acquiring Rabot estate was destined to happen. His inspiration came from an unexpected discovery, when a client was getting rid of office belongings and sent him an old book about chocolate-making from the 1920s. The timing was perfect since he was visiting his father in the Caribbean at that exact moment. In 2006, this inspired him to purchase the 101-hectare cocoa estate located in St Lucia.
According to a video made by the company in 2008, the speaker stated that they aimed to discover the roots of chocolate. Contrary to what others in the industry were doing, they decided to take an alternative approach.
Hotel Chocolat's non-conformist approach proved to be beneficial in expanding its business all across UK, from Inverness down to Truro, while also venturing globally with franchise branches in Japan and online sales in the US. However, this rebellious attitude can only take a company so far. On Thursday, Mars, a predominant food and candy company from the US, announced it would be acquiring Hotel Chocolat for a massive £534m.
Thirlwell and Peter Harris, co-founders of the company, have achieved a great success. Currently, they and their family trusts possess 50% of the business, and upon completion of the sale, each of the founders will receive 140 million pounds. Thirlwell, who will remain as the CEO, has expressed his intention to reinvest in the business together with Mars. On the other hand, Harris, who is the development director, is planning to mostly cash out as he retires. However, the sale also highlights the challenges that arise when competing with larger corporations.
Thirlwell has a sweet tooth: his dad held a high position at the ice-cream label Mr Whippy, and he has bragged about sprinkling chocolate on top of his morning omelette.
Thirlwell left university in order to work in business for a year in France. When he returned to the UK, he met Harris during a job interview and the two soon became partners in business.
Back in 1987, Harris and Thirlwell noticed a missing element in the industry of mints, which were becoming popular marketing tools. They packed the initial 20,000 mints from the Mint Marketing Company manually but soon identified the potential of their discovery. Consequently, in 1993, they established ChocExpress to make chocolate accessible online. Later, they renamed the company Hotel Chocolat in 2003 and established their first store in Watford, Hertfordshire, the subsequent year.
The customers were enamored by the refined chocolates that contained less sugar and more cocoa. Additionally, the brand boasted about its ethical treatment of farmers, which garnered positive attention. Overall, the brand was doing exceptionally well and had a bright future in the market.
Back in 2010, the corporation established its very first coffee shop. Later on, they also set up a lavish hotel in St. Lucia, supported by what they called "chocolate bonds". With these bonds, lenders were compensated using a variety of cherry liqueurs, truffles, and pralines.
As British chocolate companies like Cadbury and Thorntons were purchased by foreign entities, these stores gained popularity on UK main streets. During an interview with the Guardian in 2016, Thirlwell expressed that chocolate sold in supermarkets had become mundane and of poor quality, as well as excessively sugary.
The creators of popular chocolate bars like Mars, Snickers, Bounty, and Galaxy are now in charge, but they may not share the same opinion. However, the Hotel Chocolat brand offers something unique for the luxury market, which has remained strong despite tough economic times.
It is possible that there are some other transformations taking place. Hotel Chocolat honored the legacy of its Rabot estate by launching a series of beauty products called Rabot 1745, as well as a restaurant named after chocolate, Rabot 1745. They offer various dishes including guinea fowl served with organic milk yoghurt that has chocolate nibs infused in it. The Guardian's reviewer felt extremely nauseous after trying this dish and compared it to eating a large box of Galaxy chocolate.
Mars's marketing team, which has faced criticism for its portrayal of Uncle Ben's rice, may want to examine a certain brand more closely. This particular brand, referenced by the year 1745, was founded on a sugar farm that used slave labor. According to the Legacies of British Slavery database at University College London, a claim was filed in 1838 for compensation of £1,299, 4 shillings, and 6 pence, for the loss of 46 enslaved people. Hotel Chocolat, which owns the brand, claims to treat the current farmers on the plantation differently from others in the industry.
The main advantage of Big Chocolate is they are really good at quickly delivering their products to customers. However, Hotel Chocolat struggled with this when they tried to expand into the United States and Japan because they were too ambitious. Thirlwell admitted this to reporters on Thursday.
The spokesperson mentioned that foreign customers found the taste and pricing very attractive, but the difficulty lies in manufacturing, distribution, and other aspects that are not visible to the customers. However, the powerful Mars team is now supporting the new British company.