Downsizing keeps things sweet for chocolatier

A Cavan-based hand-made chocolate firm has developed a range of low-cost products which have compensated for the effects of the recession and could now lead to sales growth in more lucrative export markets, writes Trish Dromey

IN the recession people are still saying ‘I love you’ with chocolate hearts on Valentine’s Day, only with smaller less expensive ones than in the boom years. Ann Rudden of Áine Hand Made Chocolate in Co Cavan, said that three or four years ago, customers thought nothing of splashing out €25 or even €50 on a gift chocolate heart.

“Now they are buying smaller items such as a 100 gramme heart saying ‘I love you’ or ‘Be mine’ which retails at €3.50 or a 300g heart for €12.50.”

She said as always Valentine’s Day has brought a surge in business, but the company has to work harder to sell higher volumes of lower priced items.

Bord Bia sector manager Linda Cullen said the Valentine’s Day surge is indicative of the Irish consumers continued love affair with chocolate.

“We have one of the highest per capita consumption of chocolate in Europe — it was 10.4 kg per head in 2009,’’ she says, adding that chocolate sales in Ireland grew from €577 million in 2008 to €595m in 2009.

The growth has mainly come from the sale of innovative products that consumers purchase as items of inexpensive indulgence to treat themselves in the midst of recession, she said.

Two years ago, Áine Hand Made Chocolate grew sales with exactly this type of low cost item. The company launched a swirl stick to make hot chocolate costing €1.50 and last September introduced a range of handmade chocolate bars which retail at €1.50 and €2.50. These helped make up the drop in sales caused by the recession and is also expected to help it develop exports this year.

The company has been making hand made gift chocolates since 1999. A master chocolatier who had 11 years experience in making chocolates, Ann Rudden started the firm when she identified a small gap in the market for high quality gift chocolates. “I didn’t have sales or marketing experience but I had a passion for chocolate.”

The company started out in Dublin, moved to Meath and four years ago relocated to Cavan. “When the lease ran out in the Meath premises we moved to my home village of Stradon where my family had an unused premises which we converted to a 5,000sq ft chocolate factory.’’

The company worked on building up a brand identity, selling to independent retailers and speciality shops and also supplying hotels and restaurants.

“We started with gift boxes and added bars, sugar free chocolates and organic chocolates and probably grew by around 30% or 40% a year.”

Since 2001, Áine Chocolate has won 25 medals at the British Great Taste awards, including 13 gold medals.

Two years ago, the recession changed the market. Larger customers halved their orders and company sales fell by 20% in 2008. Since then they have launched products designed as impulse purchases rather than gift items.

“The gift market has dropped. People used to spend €20 or €30 on gift items but now will spend €5 or €10 on a gift. But there has been an increase in impulse purchases such as chocolate bars which people see as affordable luxuries in a depressed economy.”

With the introduction of chocolate bars and swirl sticks, sales last year recovered to 2007 levels. Ann is now targeting 20% growth this year.

“We have a new listing for the Avoca stores and since January we have listed by 25 Superquinn stores which are taking four chocolate bars and chocolate swirls.’’

As well as developing sales here, her strategy is to sell to markets which have not been as damaged by recession. This month, Ann attended ISM in Cologne, the world’s largest confectionary show. “We had a lot of interest from the UK and also from Kuwait, the Far East and Germany.”

Over the last year she has her sights set on the British market which has a much larger population and offers scope to develop sales of gift chocolates as well as the lower priced items. She is in discussions with a distributor who supplies farm shops and another supplying large supermarkets. The company’s collection of Great Taste Awards is a significant marketing tool.

Although exports are part of the plan, the key aim will be to “get the Irish market right,’’ and she is hoping to sign another large retailer here as a customer for chocolate bars.

Catering for Irish consumers craving an affordable chocolate indulgence as well as inexpensive gifts, the company, which employs five full time staff and three part time ones, is already preparing for Mother’s Day and Easter.