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Why Make Chocolate in Swizerland?

Why Make Chocolate in Swizerland?

Hello and good day!

I've been asked several times over the last couple of weeks why we continue to make our chocolate in Switzerland.

This question usually comes after I explain how logistically difficult it is to send cacao from Peru to Switzerland and then from Switzerland back to the United States.

It is very natural to wonder why we don't send cacao from Peru straight to the United States and attempt to manufacture our own base chocolates here in the US.

Or if we take this thought experiment even one step deeper, a good question to ask would be why we don't make our chocolate in Peru and skip shipping the cacao anywhere at all.

We could install chocolate making equipment and do the production somewhere out near where we buy and process cacao.

This would create jobs and boost the economy in an economically poor part of the world, which would be a good thing.

In theory, these options seem like they would make our cost of production cheaper, because we'd save on the shipping costs associated with transporting cacao 10,000 miles around the world before it gets to our chocolate kitchen in Issaquah, WA.

However, we have a counterintuitive case here.

While the logistics are hard, the cost of manufacture is actually cheaper in Switzerland than it would be if we tried to make a chocolate of similar quality here in the United States.

Did you catch the caveat I snuck in there?

Philosophically, we could only consider changing how we do business if we could do so without sacrificing quality.

We've been in business for a long while now.

From 2008 to 2010, our only business activity was learning how to buy and process cacao in a remote part of the northern Peruvian jungle.

We didn't make any sales our first two years in business.

We had no income.

All of our business transactions were expenditures, investments in learning the craft of fermenting and drying cacao.

In 2009, we participated in a genetic testing program with the USDA and discovered that the native cacao where we were operating was a thought to be extinct variety called pure Nacional.

By the middle of 2010, we had completed our first harvest season and my brother Brian had 9 tons of exquisitely processed cacao ready for export.

He asked us where to send it. We told him to send it to Miami.

Back in 2010, our original plan was to buy a machine called the Chocoeasy, manufactured by a German company called Netzsch. The Chocoeasy was an all-in-one chocolate making machine.

We found a person with a used machine already installed in Miami. We planned to buy the machine and take over the lease on the space.

Then my dad and I were going to fly from San Diego to Miami on a regular basis and attempt to manufacture our own chocolate using the Chocoeasy.This is the kind of insane thinking you fall into when you are a self-funded start up.

We've never taken on any outside investors, and we didn't have much money in the bank.

We needed a product to sell and buying our own small scale manufacturing equipment seemed like the cheapest option.

Thankfully, we caught a lucky break at this point in the story. It didn't seem lucky at the time though. At the time, it seemed like the sky was falling and we might have to shut down our business.

While the container of cacao was on the water from Peru to Miami, the guy who was going to sell us his machine reneged on the deal.

We ended up with 9 tons of cacao sitting in a warehouse in Miami and we didn't have the slightest idea about how to turn our cacao into a saleable product.

With no product to sell, we couldn't generate the revenue we'd need to fund the 2011 harvest.

The situation was dire.

My dad and I were freaking out a bit.

We didn't tell my brother what was going on though. We let him go right on ahead and start planning the 2011 harvest. He already had so much on his plate and so many of his own problems to solve out in campo.

My dad and I would have to figure this one out in secret.

For two years, we had been attending industry conferences. We didn't even have a product to sell.

We went to the events and told people that our third partner was in Peru and that we had rediscovered a thought to be extinct variety of cacao. People asked when they could taste chocolate made with our cacao, and we told them mid-2010.

We'd met many industry experts at these networking events, and now my dad started calling on people we knew, trying to figure a way out of our mess.

One of the guys we had become friends with was a fellow named Paul Edward, who owns a company called Chef Rubber. Chef Rubber sells all kinds of ingredients, materials, implements, and equipment to chocolatiers and chefs throughout the United States.

Paul had previously been a sales rep in the United States for a Swiss chocolate manufacturer named Max Felchlin AG. Max Felchlin AG is the company who has been manufacturing our base chocolates for the last 14 years.

Paul suggested that we try working with Felchlin. We asked how to go about doing that and Paul told us that it wouldn't be easy.

Felchlin has been around for 110 years, and they are very exclusive about choosing new partners with whom to work.

Paul suggested that first and foremost, we ought to meet one of his best friends, a famous Swiss cookbook author, chef, and university professor named Franz Zeigler.

Franz was one of Felchlin's most respected advisors.

My dad got on a call with Paul and Franz and at first Franz was very dubious about helping us. He didn't want to stake his reputation on a bunch of wild and crazy newcomers who seemed destined to go out of business in a year or two.

But my dad wasn't in a position to take no for an answer.

Brian was in the jungle. We had tens of thousands of dollars' worth of cacao sitting in a warehouse in Miami.

My dad threw out a crazy idea.

What if Paul and Franz were to take an impromptu trip out to the Peruvian jungle to meet Brian and see our operation?

There was silence. And then they both agreed.

A couple of weeks later Paul and Franz were out in the jungle meeting our cacao farm partners. They were astounded by the processing operation that Brian had built.

And Franz agreed to put in a good word for us.

I am out of space for today and will continue on with this story tomorrow.

But before signing off, I want to tell you about the picture above.

It is a refurbished 1879 longitudinal conche.

I don't have space to get into the full details of why that is important.

Suffice it to say that our chocolate is one of only a fue chocolates in the entire world made on these old world, vintage machines. the price is higher and it takes much longer the newer machines,

Lastly, I want to express one of the most important business lessons I've learned over the years.

When attempting to break into an already established market, do so with the highest quality product that you are capable of making.

We came onto the scene competing head-to-head with Callebaut, Guittard, and Valrhona.

If we had stuck with our original plan of trying to make our own chocolate using small scale equipment, we would have been laughed out of every single sales meeting, and we would not be here today.

Thank you so much for time today.

I hope that you have a truly blessed day!


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