Monday, September 16, 2013

Building Product and Infrastructure from Scratch

Original Hawaiian Chocolate Factory

Pam and Bob Cooper moved to the Big Island of Hawaii in 1997 after Bob left a career in country club management in North Carolina.  Their philosophy was that bad things happen everywhere in life.  Where is a better place to experience the good and bad than in Hawaii?  Terrific point.  What happened next was a little less obvious.  With little experience in agriculture, the couple bought a small farm with coffee, macadamia nut and cacao trees in Keauhou, Hawaii (near Kona).  Originally, they had planned to cultivate the existing macadamia nuts and build a business; however a family member’s allergy to the product dampened the enthusiasm.  They turned to the cacao trees and in 1999 founded the Original Hawaiian Chocolate Factory.  Their first batch of chocolate was sold in 2000.    

In the last 14 years, the Coopers have grown OHCF to sell over 10,000 pounds of chocolate a year.  That is 5 tons of chocolate all made in small batches on site!  When they opened, few companies made chocolate in Hawaii and most used cacao from around the world.  The infrastructure for the chocolate industry did not exist in Hawaii. Attempts had been made, but there was little success. In fact, no testing facilities existed nearby to rate the beans, so the Coopers sent them to Spain.  They brought in the processing equipment from around the world.

As a specialty item, no retailers carried 100% Hawaiian chocolate.  (The only other company was Hawaiian Vintage Chocolate founded by Jim Walsh in 1986.)  The Coopers set up their distribution and retail sales network from scratch.  Several plantations grow cacao in Hawaii, but they do not process or manufacture the chocolate themselves.  In addition to their six acres of cacao, OHCF purchases cacao from over 30 local farms. The closest competitor is the Dole Plantation that grows 20 acres of cacao in Waialua, Hawaii (Oahu), which is processed and sold by Guittard Chocolate Company.  Currently, no other company has the entire chocolate making process from growing the beans to sales (“tree to bar”) in the country.  This was not by design, but necessity.  The process did not exist, so the Coopers had to make it.  Also, the company did not have a pool of experienced industry mentors on the island.  They worked with farmers and retailers to create a viable value chain in one place.  Thus, a lot of their initial work wasn't just making prototypes of a sellable product, but also included building the market.

The company is a family affair.  Much of the harvesting and processing is still done by the Coopers.  Currently, OHCF sells only single-origin chocolate and cacao nibs.  They do not produce truffles or other chocolate items and do not sell wholesale. Unlike Dandelion Chocolate, OHCF does add cocoa butter, sugar, vanilla powder and/or milk powder to their cacao for taste and stability.  The final product is a smooth and consistent chocolate.

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