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Whats in a name?

Theobroma Cacao
derived from Greek name for the cacao tree Chocolate is a raw or processed food produced from the seed of the cacao tree Cacao has been cultivated for at least three millennia in Mexico, Central America and Northern South America Chocolate has become one of the most popular food types and flavors in the world.

Theo Chocolate
First

roaster of organic and fair tradecertified cocoa in the United States Product lines

10 Classic Bars: Ultimate, Orange, Spicy Chile, Salted Almond), Toasted Coconut, Creamy, Rich, Cherry & Almond, Mint. (Light or Dark 6 Fantasy Bars: Bread & Chocolate, Coffee, Fig/Fennel & Almond, Hazelnut Crunch, Coconut Curry, Chai. 4 Holiday Bars: Salted Toffee, Nutcracker, Peppermint Stick, Gingerbread.

In

the US by market share, candy and chocolate bars has the largest market share (44.2%)

Brief History

Founded in March 2006 by Joe Whinney and Debra Music in Seattle, WA Joe, in his early 20s, volunteered

Theo Foundation Principles

Place: The meaning of Origin


Direct

from farmers and cooperatives Long term business partnerships Benefit farmers economically and technologically

People: The meaning of Fair Trade


Production

is entirely ethical and sustainable Social benefits of Fair Trade uplift lives of farmers World of opportunities for children of farmers

Theo Foundation Principles

Planet: The meaning of Organic


Sustainable

growing practices Pest management Shade grown cacao Reforestation

Theo: The meaning of Bean-to-Bar


Small

batch of chocolate production as an art

form Adding only sustainably produced ingredients

Theo Chocolate Principles


1.

2.

3.
4. 5.

6.

Uses only pure ingredients that are grown sustainably and sourced from fair trade whenever applicable Partnering with cacao growers by ensuring they earn a living wage and have access to education for their families Honoring and respecting employees and suppliers Using green energy sources to power the factory Using sustainable packaging and printing methods Educating about social and environmental accountability 7 days a week through public tours of the artisan factory

Theo Factory

Chocolate Factory Tour

Production and Operations

Fremont factory is 20,000 square feet Inside are the offices and its retail store The production process is shown on the ground floor 2008-produces 800,000 pounds of chocolate

Competition

Nestle, Mars, Hershey and Russell Stover

4 major industry competitors for total of 51.7%. No other competitor holds more than 1% of market share Giant companies seized small-time players

People became more concerned with health

Marketing Strategy

Theos entire marketing and branding strategy revolved around this principle the only organic, Fair-trade, Bean-to-Bar chocolate factory in the United States. Mission: increase positive perception of chocolate and to convince consumers that there was intrinsic value in a products origin and production process True cost of making chocolate Target market: Male and female, educated, younger than 40 years old, eco-minded, health-

CSR program: Cocoa Practices

Aims to bring larger producers, and nongovernmental organizations from the worlds cocoa producing regions as one

Designed to provide farmers the tools they needed to grow high-quality cocoa beans while conserving indigenous wildlife and other natural resources in the tropical rainforest eco-systems that provide both livelihoods and their homes

Theo Customers

Theo markets its products through four main channels (courtesy of Debra):
Food

distributors to retailers (39%) Direct to retailers (18%) Co-packaging arrangements (4%) Through retail store (39%) products more expensive by 25%

Other Sources of Revenue

Factory Store and Factory Tour


of companys revenue come from store sales 10% of Seattles tourists visit Theo Factory especially on summer Rate: $6/head on daily tour and $12/head for private tour
40%

Rental income from events held at the 1500 sq.m. store Theo Chocolate University

Problems

Should the company stay true to its sociallyresponsible roots, or would it have to compromise some of its core principles in order to become and stay financially profitable? How can they make profit while maintaining their values? Convince consumers that organic choclates are better than other Convince consumets to pay more for a higher quality product (processed chocolate)

SWOT Analysis
1. Good Reputation among Clients 2. Strong Marketing strategy and sales 3. New and Innovative Products 4. Well Capitalized 5. Good public relations 6. Variety of unique flavours 7. Strong Executive Management 1. Slow cost production because they are using green energy 2. Green Energy - Expensive maintenance cost 3. Other products are more delicious because they are using chemical enhanced formula.

1. New technology advancement 2. Increase in complexity 3. Capital intensive industry 4. Exploitation of special days like Thanksgiving, Halloween and Christmas.

1. 2. 3.

Slow growth of the industry Obesity issue Diabetic groups