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The Honolulu Advertiser
Posted on: Monday, July 14, 2008

Chocolate maker defies the odds

By Ashley Petry
Indianapolis Star

Hawaii news photo - The Honolulu Advertiser

Carolina Garcia, left, and Dominga Hernandez package chocolate bars at Endangered Species Chocolate's Indianapolis plant. The company found success by focusing on a "triple bottom line."

JOE VITTI | Indianapolis Star via GNS

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INDIANAPOLIS — From a business perspective, Endangered Species Chocolate seems to be doing it all wrong.

At a time when most companies are tightening their belts, the chocolate company is seeking out more expensive raw materials, giving away large chunks of its profits and sending employees on far-flung research missions.

It's counterintuitive, but it works.

The company, which moved to Indianapolis from Oregon in 2005, has seen sales soar from $3 million in 2004 to a projected $17 million this year. Its goal: to reach $50 million in sales by 2013.

The secret, Chief Executive Wayne Zink said, is its "triple bottom line," which focuses on the financial, environmental and social sides of business.

Endangered Species Chocolate donates at least 10 percent of its profits to support "species, habitat and humanity" — hence its distinctive name. Recipients have included Chimp Haven, the Ocean Conservancy and Peace Learning Center.

"We have found that by being ethical and holding our values more dear than profits, we're actually becoming more profitable," said Mark Waddell, one of the regional sales managers.

Waddell recently joined three co-workers on a trip to the Ivory Coast to visit the farming cooperatives where the company's all-natural cacao is harvested.

Because many of its raw ingredients, such as cacao, are raised in areas with social and political challenges, "we never source a new crop without being there physically," Zink said.

"We not only want to pay a social premium for the crop, but we want to be involved on the ground," he said. "For us, fair trade is about being present and being involved."

Endangered Species Chocolate is now the top-selling chocolate brand in natural-foods stores in the U.S., according to SPINS, a market-research company focusing on the natural and organic food and beverage industry.

Sales of natural and organic chocolate increased 21 percent nationwide last year to $113 million, SPINS said.

Several factors are fueling that growth, including the trend among consumers to "go green" with natural and organic food products. Another factor is the increasing penetration of natural and organic products into traditional supermarkets, making them more accessible.

The best news for Endangered Species Chocolate, however, may be that consumers increasingly are including social conscience when making buying decisions.

Chocolate bars that retail for $2.79 — much more than the average Hershey bar — don't seem to faze consumers, many of whom are members of the LOHAS group — marketing slang for "lifestyles of health and sustainability."

SPINS research shows those consumers will cut spending elsewhere to afford natural and organic foods.

Zink said the company has a 100 percent retention rate since its move to Indianapolis in 2005. It now has 50 employees, nearly tripling the 18 it had back then.

Endangered Species Chocolate's employees sometimes talk about the company as if it were a nonprofit group, but make no mistake: They're keeping a close eye on the financial aspect of that "triple bottom line."

"If we're not profitable, then we can't contribute to our passion," Waddell said. "Our day job is to make the best chocolate in the world."