Turning an entrepreneurial family business into a mainstream brand has been a big step for some Melbourne chocolate makers.
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Entrepreneur: John Grisold, Director of Retail Sales
Company: Chocolatier Australia
Business type: Makers of European-style chocolates
Founded: 1984; Co-owned by John, David and Mark Grisold (30% each) and their sister Joanne Nethercote (10%)
Employees: 70 (55 full-time, 15 part-time)
Turnover: (2004 - 2005) $10M +
Head office: Melbourne
Contact details: +61 3 9455 9000
The Chocolatier Australia Story
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Key learning points:
- Growth - Do not allow daily management of rapid growth to smother your strategic planning - or its execution.
- Experts - Are your skills entrepreneurial or managerial? Few people have both, which is why you need expert help.
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When the Grisold brothers started making chocolates, 27 kilos was considered a good week. John Grisold says: “I remember thinking ‘This is it - we’ve peaked’.” That was back in the 1984, after John and David Grisold had established Chocolatier Australia and were creating a niche market for hand-made, European-style chocolates. The business has come a long way since then. John says: “Now peak time sees us producing 8000 kilos a week.”
The Grisold brothers have three generations of small business in their blood. John says: “Ever since we were kids, the conversation between Mark, David and me was never if we would start a business but what sort.” After gaining experience in supermarkets and prepared foods, John and David decided to create their own food business.
In 1984, John and David purchased a small business that sold confectionary for fundraising activities. Grisold says: “We bought the existing business so we had a turnover. In the background, we were developing our chocolates. Six months later, we shut it down and became Chocolatier Australia.” By 1991, John and David needed more help and invited their brother Mark to join them as an equal partner.
The Challenge
To build a brand from nothing.
The Solution
In the mid 1980s, Australians were starting to travel more, tasting European chocolates overseas and eating food prepared by European chefs at the new five-star hotels catering to tourists coming to Australia. But in Australia no one was making European-style chocolates. John says: “We went knocking on the doors of executive chefs. It was a relief for them to find we could supply quality chocolates. It was one less thing for the chef to worry about.”
Chocolatier focused on making a quality product: sourcing the best ingredients, maintaining strict quality control and always meeting orders. A local signwriter designed their first business logo. But only in the past few years have the Grisold brothers begun to look at Chocolatier as a brand. John says: “Two years ago, we undertook a strategic marketing overview and now we are learning to become more of a brand-led company.”
The Grisolds spent about $25,000 to hire a marketing company, The Marketing Bank, to do the strategic overview. John says: “We heard they had helped [the rice cracker maker] Sakata with their marketing campaign and it had been very successful.” The Marketing Bank ran consumer focus groups. John says: “The focus groups told us that people were confused; the name was familiar to them but they couldn’t tell if we were a high-quality brand.”
The conclusion was that Chocolatier needed to raise its public profile. John says: “They told us that Australian-made and family-owned were important, but people didn’t know that’s what we are.”
Chocolatier had a new logo designed and the chocolates were wrapped in new premium packaging, which features the Grisold family crest. Grisold says: “We have a chocolate in our range called ‘Three Brothers’ and another ‘Macadamia Crest’ which has the family crest. We need to use our packaging to tell our story.”
The new packaging was introduced in Easter 2006. Grisold says: “We’re told it has high female appeal but some of our loyal customers were a little confused; they didn’t recognise our products on the shelves. We view this as the first step in rebuilding the brand.”
One of the biggest challenges Chocolatier has faced is the transition from a cottage industry into a medium-size business. Grisold says: “A weakness of family businesses is to be [stuck] running as entrepreneurial businesses. But after about 10 years, you have to start bringing people into the business with specialist skills. We’ve had to bring in people with experience in warehousing, logistics, office management and accounting.”
The Result
Chocolatier Australia had its first million-dollar turnover in 1989 and has had double-digit growth every year since, including a 17% increase in 2005-06. Brand development will continue in 2006.
In June 2006, Chocolatier Australia will take delivery of a $2-million frozen-shell chocolate making machine from Germany. John says: “It’s a huge investment - we will be able to make more chocolates in an eight-hour shift than we currently make in a week.”