What’s in a name?

Theobroma Cacao derived from Greek name for the cacao tree Chocolate is a raw or processed food

produced from the seed of the cacao tree Cacao has been cultivated for at least three

millennia in Mexico, Central America and Northern South America

Chocolate has become one of the most popular food types and flavors in the world. 

Theo Chocolate

First roaster of organic and fair trade-certified cocoa in the United States

Product lines 10 Classic Bars: Ultimate, Orange, Spicy Chile, Salted Almond),

Toasted Coconut, Creamy, Rich, Cherry & Almond, Mint. (Light or Dark

6 Fantasy Bars: Bread & Chocolate, Coffee, Fig/Fennel & Almond, Hazelnut Crunch, Coconut Curry, Chai.

4 Holiday Bars: Salted Toffee, Nutcracker, Peppermint Stick, Gingerbread.

In the US by market share, candy and chocolate bars has the largest market share (44.2%)

Brief History

Founded in March 2006 by Joe Whinney and Debra Music in Seattle, WA

Joe, in his early 20s, volunteered

Theo Foundation Principles

Place: The meaning of Origin Direct from farmers and cooperatives Long term business partnerships Benefit farmers economically and

technologically People: The meaning of Fair Trade

Production is entirely ethical and sustainable

Social benefits of Fair Trade – uplift lives of farmers

World of opportunities for children of farmers

Theo Foundation Principles

Planet: The meaning of Organic Sustainable growing practices Pest management Shade grown cacao Reforestation

Theo: The meaning of Bean-to-Bar Small batch of chocolate production as an

art form Adding only sustainably produced

ingredients

Theo Chocolate Principles

1. Uses only pure ingredients that are grown sustainably and sourced from fair trade whenever applicable

2. Partnering with cacao growers by ensuring they earn a living wage and have access to education for their families

3. Honoring and respecting employees and suppliers

4. Using green energy sources to power the factory

5. Using sustainable packaging and printing methods

6. Educating about social and environmental accountability 7 days a week through public tours of the artisan factory

Theo Factory

Chocolate Factory Tour

Production and Operations

Fremont factory is 20,000 square feet Inside are the offices and its retail store The production process is shown on the

ground floor 2008-produces 800,000 pounds of

chocolate

Competition

Nestle, Mars, Hershey and Russell Stover 4 major industry competitors for total of

51.7%. No other competitor holds more than 1% of

market share Giant companies seized small-time players

People became more concerned with health

Marketing Strategy

Theo’s entire marketing and branding strategy revolved around this principle “the only organic, Fair-trade, Bean-to-Bar

chocolate factory in the United States.” Mission: increase positive perception of

chocolate and to convince consumers that there was intrinsic value in a product’s origin and production process

“True cost of making chocolate” Target market: Male and female,

educated, younger than 40 years old, eco-minded, health-conscious

CSR program: Cocoa Practices Aims to bring larger producers, and non-

governmental organizations from the world’s cocoa producing regions as one

Designed to provide farmers the tools they needed to grow high-quality cocoa beans while conserving indigenous wildlife and other natural resources in the tropical rainforest eco-systems that provide both livelihoods and their homes

Theo Customers

Theo markets its products through four main channels (courtesy of Debra): Food distributors to retailers (39%) Direct to retailers (18%) Co-packaging arrangements (4%) Through retail store (39%) – products more

expensive by 25%

Other Sources of Revenue

Factory Store and Factory Tour 40% of company’s revenue come from

store sales 10% of Seattle’s tourists visit Theo Factory

especially on summer Rate: $6/head on daily tour and $12/head

for private tour Rental income from events held at the

1500 sq.m. store Theo Chocolate University

Problems

Should the company stay true to its socially-responsible roots, or would it have to compromise some of its core principles in order to become and stay financially profitable?

How can they make profit while maintaining their values?

Convince consumers that organic choclates are better than other

Convince consumets to pay more for a higher quality product (processed chocolate)

SWOT AnalysisStrength1.      Good Reputation among

Clients2.      Strong Marketing strategy

and sales3.      New and Innovative

Products4.      Well Capitalized

5.      Good public relations6.      Variety of unique flavours

7.      Strong Executive Management

Weakness1.  Slow cost production because

they are using green energy2.  Green Energy - Expensive

maintenance cost3.  Other products are more

delicious because they are using chemical enhanced formula.

Opportunity1. New technology advancement

2. Increase in complexity3. Capital intensive industry

4. Exploitation of special days like Thanksgiving, Halloween

and Christmas.

Threat1.      Slow growth of the

industry2.      Obesity issue

3.      Diabetic groups