Love Cocoa is a British chocolate company launched in July 2016 by James Cadbury – descendant of John Cadbury of the Cadbury confectionery company.
Our organic chocolate bars are handmade in Great Britain using the finest ingredients, sourced from our partner independent British producers such as Maldon Sea Salt.
We are Virgin Foodpreneur Finalists 2017, joining alumni of Pip & Nut, Harry Bromptons, and Cauli Rice.
We have also won a number of industry awards including Great Taste Awards and have been shortlisted for Great British Food Awards.
We currently have three main revenue streams:
We launched into retail this year having originally started online. Our first stockist was Fortnum & Mason's. We have recently signed with two large distributors which should help us expand our retailer presence in the UK.
We also have distribution agreements in place for Japan & China.
2) Online B2C
Our gift & subscription chocolate service conveniently delivers our chocolate through customer’s letterboxes. We designed an attractive letterbox sized box to avoid issues with missed deliveries which can contain one of our signature collections or a choice of single bars. This service is also offered on a subscription basis to customers with monthly delivery.
3) Corporate Sales
We have observed that this is a growing area of interest from external corporate customers looking for us to supply chocolate to them for gifts, events or catering.
The business was established in response to:
1) Increase in demand for premium Food & Drink products:
Recent trends have seen premium products such as Fever Tree and Pip & Nut take on larger players in offering better quality products. Consumers are shifting towards premium healthier products.
2) Demand for premium chocolate products abroad:
British products are regarded as premium products across the world and we believe there is room for high-end British chocolate brand.
Consumers wanting increased convenience in their life, ordering products online and not needing to be in to take delivery. There have been websites established such as Graze and Pact coffee which enable consumers to order goods which are delivered through their letterboxes without the need for signing. There are services for gifting flowers and marshmallows through the letterbox and we want to be that for chocolate.
Substantial accomplishments to date
• Built a chocolate brand from scratch achieving customer rating of 4.8/5* online.
• Developed a mobile optimised website, and highly recognisable online brand which can now take subscriptions.
• Co-Founder Sari Issa came on board in March, investing in the business & strengthening team. Paul Troy joined as a marketing & business advisor in return for equity and was recently number 9 in the Power 100 marketing people (Campaign Magazine).
• Virgin Foodpreneur Finalists 2017, previous finalists include Pip & Nut
• 1st stockist Fortnum & Mason. Due to launch into Harvey Nichols & Planet Organic in September.
• Partnered with two wholesalers to increase brand awareness.
• Started exporting to Japan & China.
• Established a strong social media presence:
- 5,000+ followers on Instagram.
- 8,500+ followers on Facebook.
- 2,500+ followers on Twitter.
We have a 3 phase strategy, with the initial launch online to gain valuable customer feedback, followed by seeking a retail presence and finally we intend to launch online personalisation.
3 main revenue streams:
1) Retail - we entered into retail in 2017 and looking to grow this.
• UK: currently in Fortnum & Mason's and Fenwick Newcastle. Speaking with 2 more department stores. Partnerships in place with 2 national distributors since June 17.
- JV with Japanese company who has been doing a tradeshow in July 2017 and displaying Love Cocoa.
- Distribution agreement in place with exports starting to China.
- Talks with UAE exporter.
2) Online - launched product exclusively online, improving it with feedback from customers.
• Gifting: buying for friends & family e.g. Birthday, Valentines, Mothers Day, Fathers Day, Congrats etc
• Treating: we believe that customers will want to treat themselves. Our boxes fit through the letterbox and are an ideal treat waiting for customers to come home
• Subscription: chocolate bar subscriptions.
• Monthly chocolate truffles club (to be launched later in 2017).
3) Corporate .
e.g. Welcome, Sorry, Thank you, Congrats.
• Office treats.
Use of proceeds
We intend to use the funds raised for the following:
• Business Hires
- Expand the team employing a digital marketing expert (part-time to start).
- Add to the sales team.
- Increase digital marketing spend.
- Develop a non-digital marketing strategy including PR.
- Attend a number of tradeshows to increase of retail presence.
- Do more pop-up events, offering samples and getting people trying our products.
• Expand chocolate products
- Increase our product offering and flexibility on our current collections.
- Start month chocolate club similar to Hotel Chocolat who have c.70 members paying £22.95 each month.
• Other complimentary products
Develop other Cocoa related products.
• Working capital
The business requires cash to expand with the lag between making the products and getting paid. This should help us improve our cashflow management and allow us to scale.
The company currently has an outstanding start up loan of £7,333 as of August 2017. Monthly repayments are £193.54.
We believe that our high-quality organic chocolate bars sit above the mass foreign produced Lindt and Green & Black's. Our chocolate is handmade here in Great Britain.
We pride ourselves of sourcing as many ingredients and material from independent British producers. It is free-from refined sugars, gluten and soya.
We believe our customers are those who appreciate premium organic aspirational products.
The way we differ from our competitors is:
• We have a unique brand story which help us get noticed in the market.
• Our chocolate is made in Great Britain, and, to our knowledge, there are only a handful of companies doing this.
• We use only the finest organic fair-trade chocolate. We have observed a clear consumer shift toward this food trend.
• We can test new products having a loyal online customer base and have data which could help get us into more retailers.
• We partner with independent British producers building up relationships with these brands in a mutual beneficial way. We believe consumers love this and its also a great way to expand the business together.
• We believe our branding is modern and stands out in the market.
Characteristics of target market
• The UK chocolate industry is worth £4.1billion (Source: Mintel, 2015) and is estimated to grow to £4.8bn by 2019.
• The global premium chocolate market is poised for a compound annual growth rate of around 8% int the coming years, according to Nestlé estimates. Organic chocolate is also experiencing strong growth with nearly +20% in 2011.
• Free-form is one of the fastest growing grocery category in the UK worth £470m (Mintel, 2016)
• 2015 UK organic market worth £1.95b (Soil Association’s 2016 Organic Market Report)
• Subscription market is growing, with Hotel Chocolat having c.70 subscribers to their monthly chocolate club.
• We are entering the personalisation market with customers able to add a personalised packaging similar to a gift card with the additional benefit of our chocolate. The gift card market is worth £1.7 billion in UK (GCA Market Report 2016). Consumers are more savy, using services such as Moonpig to send cards (12m sent in 2011), without need to go out and buy a card and then send.
Our main focus so far has been social media and Facebook advertising, however we are looking to expand our marketing reach.
• Facebook advertising
We are currently achieving what we believe to be a good CTR from our adverts, and will continue to use this as our major marketing stream. Our click-to-website rate costs lower than similar ads (according to FB). With changes to the website we hope to increase our conversion rates. To increase spending at key times such as Xmas, Easter, Mother/Fathers day etc.
We have used a freelance PR person to help with initial launch. We have been featured in The Telegraph, Campaign Magazine, Monocle and other business publications without a huge spend. We received a great deal of attention from the press after doing the Virgin Foodpreneur 2017. We will look to use a small agency to manage this side of the business and increase sales.
We plan to launch a referral scheme which has been successful for companies such as Uber, Bloom & Wild, Airbnb to name just a few. We plan to use funds from this raise to start this process.
Currently we have optimised our website without any spend, and also run blogs, however we realise we need to start spending to move up the Google rankings.
• Google AdWords
To start a campaign. So far we have run a few trial, however, believe it will be more beneficial when we are more established with these adverts expensive to run.
Do some promotional videos in the style of Buzzfeed & Tasty to gain viral content.
• In-store sampling
We intend to partner with certain stores and do in-house sampling.
We are looking to attend a number of events which is a way of meeting buyers and key people within the industry.
• Hotel Chocolat - became listed in 2016, having only been established 1988 and rebranded as Hotel Chocolat in 2003. Price at IPO was 148p valuing the company at £167m with today value substantial above this.
• Green & Blacks - bought by Cadbury for an undisclosed amount reportedly between 20-25m in 2005.
• Montezuma - setup in 2000, have revenues of £4.2m (2015) and expected £8.5m in 2016.
• Online Letterbox Chocolate companies:
- Cocoa Runners - monthly chocolate gifts. Don't make themselves, purchase from other business around the World thus potentially lower gross margin.
- Morse Toad - personalisable chocolate blocks.
We feel we have an advantage over these brands, with Love Cocoa manufacturing under are own brand. We could potentially partner with other chocolate makers for a curated chocolate box like Cocoa Runners, and also do chocolate letters like Morse Toad in the future but the focus is on building our brand and adapting quickly to consumers tastes.
• Other Gifting Websites
- Moonpig - specialise in cards. Are expanding their gifting range, however is expensive delivery and bulky, not fitting through the letterbox.
- Bloom & Wild - specialise in flowers.
Flowers and gift cards are still most popular online gifts, however there is a market for chocolate and as far as we know there is no real market leader yet. As chocolate letterbox is a new concept we expect it to take a little time to get people in the habit to think of sending chocolate instead of a card. We are geared up to Christmas and Easter.