How To'ak Wants to Make Chocolate a Luxury Item.
What is To'ak Chocolate?
JT: To'ak Chocolate is a luxury chocolate company based in Ecuador. We source our cacao from the oldest and rarest variety of cacao on Earth. We are known as the most expensive bar of chocolate in the world. Our flagship edition costs $365 and was aged for three years in a 50 year old French Oak cognac cask. It is packaged in a handcrafted Spanish elm wood box that comes with tasting utensils and a 116 page booklet on the product. Each bar has its own individual number engraved on the back. We are trying to reshape the way that people perceive chocolate.
What does that mean?
JT: Basically, most of us have grown up looking at chocolate like a candy bar. Something you buy for $2 at a pharmacy. You pop it in your mouth and you don't really think about what you're consuming. It’s a total break from the way that cacao has been viewed for literally thousands of years through history. It's always been considered sacred in every single culture it's touched, up until the 1900s when it was mass produced and became a commodity. What we're trying to do is actually bring that respect back to this very special tree. When we present our chocolate it's not something that you simply pop in your mouth and go on your way. It's something that you really receive as an experience. we're trying to get people to shift their perspective. We want people to explore it the way they would a rare bottle of wine.
What does your marketing plan look like?
JT: Obviously for a lot of people who are used to a $4 bar of chocolate, paying more than $300 is a shocking amount of money. A lot of what we try to do is communicate to people [why its priced this way].
What's the difference between what we do and what Hershey's does? A lot of that is built on drawing from the wine and whiskey industry. A lot of people are already familiar with expensive bottles of wine, expensive bottles of whiskey, and we basically build off of that message.
What did your market look like at the beginning, in comparison to now?
JT: When we began, in 2014 the most expensive bars of chocolate on the market were kind of $8 or $10. Even that was considered very high. Some people would complain "How can chocolate cost $8? It used to cost $2." Then we came out with a bar that cost $260. That provoked kind of a shock to the industry and the system, in ways that, for the most part, have been positive. A lot of chocolate makers have been frustrated with the low prices they've been forced to sell at, because of the perception of the market.
People expect cheap products. So chocolate makers, most of whom are more artists than anything, are forced to use cheap inputs or cut corners. This results in a cheap bar of chocolate. When we came out with our $260 bar of chocolate, it changed the paradigm a bit and allowed other makers to say "Okay, we can afford to raise our prices, and people will not necessarily be turned off.”
This presents an opportunity for chocolate makers to be more deliberate with their product. We can take our time, produce smaller quantities and focus more on perfecting the product.
Four years later, we see more bars priced at $25 and more. That's no longer a crazy price point. As a result, we’ve been putting forth even more ambitious editions and it’s being received it well. There’s no longer shock. People want to delve deep into something. We’re offering that rare experience.
Tell us more about the experiential.
JT: It’s a trend we’re seeing in all aspects of life right now. Across all industries we've been bombarded with so many products that are, for the most part, cheap. People are no longer excited by something they can just buy or consume. People want to have an experience. So when people are looking for something special to do, what is it that you do? You look for something that gives you meaning. Something that's going to be memorable. Something that you're going to be able to draw people together for a unique conversation.
What is one business lesson you learned the hard way?
JT: We knew the message, developed this product, the branding for it, without focusing on the distribution channels. We launched this product and it made a sensation throughout the world. We received a lot of press. People were impressed by the product, and yet distribution was not in place. We struggled to get our product to people and build a base.
We should have dealt with distribution and sales at the same time as branding and promotion, instead of piecing it out. Initially, our product was aimed at the consumer (people looking to buy a bar of chocolate). We fixed our distribution by focusing on the B2B market, and partnerships with other luxury brands like Mercedes and Hennessy.
What advice would you give to your younger self?
JT: I would say "Jerry, just keep doing what you're doing. You're on a strange path. It's going to take you in weird places, and at times you're going to feel lost. Just keep following it, and you will get to where you're going." I wouldn't change anything. I would basically just say have faith, always look for what's different, and try to add value in areas that other people aren't adding value, and always do what you're passionate about. That's what I have done so far. It would be difficult to imagine a life without that. I would say "Hey, you're doing it buddy. Just keep going."
How much does social media play into your business? Especially in the luxury market?
We followed a similar path in the first few years. It was not a major priority. In the last two years we've decided that we have to have a presence, and we have to do it in a way that is becoming of a luxury brand. There's a different approach that a business that's looking for volume.
We lagged on that in the first few years, and now I think we're just starting to catch up.
The video portion of this interview ran on Entrepreneur.com on December 14, 2017: This Entrepreneur Sells $355 Bars of Chocolate. Is He Crazy or a Genius?