British chocolatier Hotel Chocolate grows its own cacao in Saint Lucia and sells chocolates direct-to-consumer via physical store, online, and subscription channels.

The brand boasts a revenue of 132.5m (up 14% from 2018) with 10.9m profit after tax, and is expanding its presence into international markets, including Hong Kong, Singapore, Japan, Scandinavia, and the US.

However, the company started with very modest ambitions, according to CEO Angus Thirlwell, who describes Hotel Chocolats journey a perpetual evolution with perpetual growing ambitions.

Speaking at start-up event Bread and Jam earlier this year, Thirlwell said his initial start-up which he launched with business partner Peter Harris was founded on the nichest idea youve ever heard of.

The concept was to supply customised branded peppermints to corporates, and in doing so, replace plastic branded promotional pens. The B2B model was relatively cash generative, said Thirlwell, we made it work and got to a few million pounds-worth of sales.

Once The Mint Marketing Company expanded its concept into chocolate, the business partners observed that chocolate had the power to excite people in a way that peppermints didnt. There was a very fertile possibility of using imagination to create something interesting, Thirlwell recalled.

The duo quickly fell under the spell of chocolate and started researching the B2C market. Their next offering, which launched in the late 1990s, was the Chocogram a chocolate box that fit through a letterbox with a gift card attached.

While that model worked very well, Thirlwell felt the company was being held back by its brand name: Choc Express. Further, repeat custom was infrequent. In 1998, the partners integrated the Chocolate Tasting Club into the business, whereby subscribers received mixed selection chocolate box every month.

Two years later, Choc Express began to ask subscribers to score the chocolate recipes a concept that still exists today. With approximately 100,000 members, the company was now modestly profitable, said Thirlwell, and at a point where we [needed] to get a proper brand name.

Having spent time in France, Thirlwell was convinced he wanted the French word for chocolate, chocolat, in the brand name. And the word hotel offered the promise of a place, he elaborated. A hotel is a refuge, its somewhere that people look forward to going to. Putting the two together created some kind of magic.

It was at this time that Hotel Chocolat established its three pillars the three things that we wanted to focus on forever, as a brand and a business. These are originality, authenticity, and ethics.

CEO Angus Thirlwell on Hotel Chocolats three pillars

Originality:We want to be continually driven by imagination. Doing things in a fresher, better way, and not copying other people or following, in our case, Belgian chocolate, Swiss chocolate, or French chocolate.

Authenticity:We have gradually been putting more and more cocoa, and less sugar, into our chocolates. We also want to be the real deal in terms of knowledge. This is what ultimately led us to buying our cacao estate, because we needed to know absolutely everything about the star ingredient: the cacao.

Ethics:Ethics [is about] being a good world citizen, going about things in a responsible way, [including] the way we do deals with suppliers and pay on time, through to making sure that all the cacao we use [is aligned with] engaged ethics which goes beyond broader [sustainability] programmes.

Hotel Chocolat is also committed to reducing waste, using every part of the cacao bean, such as the cacao shells which it uses in infusions. Any misshapen chocolates that are made with premium ingredients go into the companys reduced-priced Ugly But Good bags.

Hotel Chocolats ambition again notched up a level when it took the plunge into brick-and-mortar retail, said Thirlwell. Creating a branded Hotel Chocolat space addressed the immediate gratification element of chocolate, he explained. Not everybody is prepared to wait a day for their chocolate to arrive. When you decide you want it, you want it right now and we were not providing a solution to that.

The retail model really started to work, attracting a broader demographic compared to the companys online subscription model. The team also observed that physical retail played a huge role in building brand awareness.

Some call brick-and-mortar outlay rent, but the self-proclaimed big fan of physical retail said it can otherwise be interpreted as marketing: Its the cost of acquiring a new customer.

Since opening that first store in 2004, Hotel Chocolat has amassed 115 stores in the UK.

In 2006, the duo made their foray into the cocoa growing world, with the acquisition of Rabot Estate a 250-year-old cocoa plantation in Saint Lucia.

In doing so, Thirlwell hoped to raise consumers awareness of the entire chocolate production process starting on the farm. Nobody ever talked about [the agricultural side], he recalled. Unlike wine or olive oil, the agricultural discussion is never there. And therefore, the potential profits from a successful consumer good doesnt make it there either.

Not only would purchasing a cocoa plantation be an amazing business adventure that would help build a stronger brand, but Thirlwell was also convinced they would be doing something good that would nourish the ethical and authentic elements of [the] brand.

Buying Rabot Estate has enabled Hotel Chocolat to build up knowledge in the entire chocolate making process, including how to grow cacao organically, how to preserve old gene types of trees, and how flavour can vary from grove to grove.

In 2011, Hotel Chocolate opened a hotel and restaurant on the estate. Thirlwell estimates 70% of the guests come from the US. Having coincidentally launched in the US in 2018, the CEO predicts the hotel will be more valuable than expected in terms of reaching US-based audiences and creating a new narrative on chocolate.

Hotel Chocolat aspires to reinvent chocolate. Part of this mission is encouraging consumers and brands to pay close attention toingredients lists.

As such, the brand is campaigning for tighter regulations regarding how the term chocolate is used. As it stands, its meaning is quite loose, he said. In my book, its quite easy. If cocoa is the number one ingredient [in a product], you can use the word chocolate. If sugar is the biggest ingredient, then there is another word that is available: its confectionery.

The CEO said he is asking chocolate associations to tighten up rules regarding its use. Mixing [chocolate and confectionery] up has done a good job of confusing the customer for decades. I think chocolate associations should do a better job of providing guidance for the consumer.

Another of Hotel Chocolats missions is to reinvent hot chocolate. We are trying to bring back the reference of drinking chocolate that used to exist in the 1700s in Europe, and before that, in early Mayan civilisations, explained the CEO.

The brands current range includes single serves of grated hot chocolate products, in flavours such as salted caramel and clementine; 100% Mayan red Honduras, and maple and pecan.

Weve got to get people to stop thinking about hot chocolate as an instant powder full of sugar, skimmed milk, and a tiny bit of cocoa powder, and instead as coffee has done very successfully bring it back to this noble drink that is full of good nutrients.

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Angus Thirlwell on the 'perpetual evolution' of Hotel Chocolat - FoodNavigator.com