Tony’s Chocolonley: The slave free
chocolate brand that was kicked off of the
“Slave Free Chocolate List”
A report on Tony’s Chocolonley’s most
prominent marketing problem:
Marketing for EB &E
Group 1
By J Smulders (s4792505), A Pantelide(s4045084) L.R Rengers,
(S3491730), R.G.A Ramadhan (s4717090)
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Table of Content
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1.Introduction:
2.Internal analysis
2.1 Market Composition
2.2 Customer Value Analysis
2.3 Customer Value Analysis
2.4 Marketing Mix Elements
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3.External analysis
3.1 The microenvironment and Competitors
3.2 Marketing Strategy
3.3 The macroenvironmental
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4. The Marketing Problem
4.1 Swot Analysis
Strengths:
Weaknesses:
Opportunities:
Threats:
4.2 The Marketing Problem analysis
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5. Advice
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6. References
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1.Introduction:
The bright red Tony’s bar at the checkout counter in one’s local supermarket has more behind it
than just great taste and superior quality. Tony’s Chocolonley is a company focused on creating a
positive impact, from cocoa sourcing to chocolate sales, with a mission to transform the chocolate
industry and end modern day slavery within the industry. Despite their tremendous growth
financially with a net revenue growth of 24%, there are still ways in which it can improve. TALK
ABOUT MARKETING PROBLEM.
2.Internal analysis
2.1 Market Composition
The chocolate market, especially in the Netherlands, is highly competitive. Chocolate products can
meet both the physical and emotional needs of a customer. Consumers buy and eat chocolate not
only because they have a need for food but also because the experience of eating or gifting a Tony's
chocolate bar gives them joy. Tony’s has catered to their market by providing customers with a
superior product, encased in whimsical packaging, that also caters to their desire to be more
sustainable in their consumption choices.
2.2 Financial strength assessment & resource availability
According to their annual 2020-2021 report, 15 years after Tony's founding, it has expanded its
coverage to 35 different countries while having a noticeable share in its home market chocolate
industry. Reports on other factors align with the company's market share and its worldwide
coverage growths. Based on the company's annual report in 2021, the number of farmer households
living out of poverty has increased from 71.6% to 83.7% over the past three years. This verifies
the company's commitment to its mission which is to empower cocoa laborers. Moreover, the
number of farmers supplying their open-chain has subsequently increased by 3 397 people over
the last three years. This data has proven to be beneficial to both the cocoa division of labor and
the company. The increase in workers influenced the number of cocoa supplies, where, the number
too increased from 6 964 tonnes to 12 574 tonnes in 2021. Tony’s Chocolonely has delivered on
its promises by improving the welfare of chocolate suppliers. At the same time, the company has
raised its capabilities to expand due to an increase in cocoa supplies.
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2.3 Customer Value Analysis
There must be a reason as to why Tony’s Chocolonely has been as successful as it is now. One
way of measuring their success is by looking at the customer value analysis, an analysis conducted
to determine what benefits target customers value and how they rate the relative value of various
competitors' offers (Kottler and Armstrong 2020). Alongside fulfilling the physical needs of its
customers, the company provides customers the opportunity to contribute to the company’s cause
by upholding their brand image of selling slavery-free chocolate.
This image has been built through various marketing efforts, such as the use of an eccentric design
in their chocolate bar that represents inequality in the cocoa industry, their certification by
Fairtrade and B-Corp, official labeling organizations sharing the same goal to end human rights
violations in the cocoa industry, and promoting the company's five sourcing principles: traceable
cocoa beans, higher salary for labors, farmers' professionalization, long-term commitment with
partners, and the company's quality and productivity.
2.4 Marketing Mix Elements
Overall, the company's promotion has been an efficient tool to increase sales. Through their image
of maintaining a slave-free and equal trade commitment, they manage to complement their prices
that are slightly higher than conventional chocolate companies. In addition to promotion, the
company's image of social sustainability is also socialized through their distinctive product designs
and their certifications provided by credible organizations.
Another factor contributing to their sales is the company's open value chain, where every product
can be traced back to the raw material’s harvesting. This open system, related to Tony's
Chocolonely five sourcing principles, creates efficiency in the production processes. Starting from
the harvesting process, where they develop trust and credibility with farmers, the manufacturing
process, with the help of Barry Callebaut Group—the world's leading manufacturer of high-quality
chocolate and cocoa products, to their distribution with the help of retailers like Albert Heijn.
These aspects give them both social and material competitive advantages compared to other
competitors. Hence, even though the chocolate market is a free market, Tony's Chocolonely has
created a social competitive advantage, which builds specific entry barriers to the company's
market.
However, the company needs to notice the dependency on its public image. If Tony's Chocolonely
loses its credibility, then financially, they cannot compete with competitors due to their higher
prices and a significantly lower number of employees compared to conventional enterprises.
Moreover, the company's decision to ignore profit as its main priority may become economically
fatal from a business point of view. This has been proven by the company's annual report, which
stated that in 2021, they faced a loss of 4,3%. Unfortunately, this low percentage of profit is not
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only a seasonal occurrence, but it has become a trend for the company, where, over the last three
years, the company has failed to reach a profit of over 1 percent of its revenue minus costs.
3.External analysis
3.1 The microenvironment and Competitors
The microenvironment of a company includes all of the actors that are closest to and affect a
company’s ability to engage and serve its customers (Kottler and Armstrong 2020). Tony
Chocolonely’s microenvironment consists of Tony Chocolonely itself, its suppliers, customer
market, marketing intermediaries, competitors, and the public.
Tony’s Chocolonely operates mainly in the Netherlands, the UK & Ireland, Germany and the US.
Thus, their close competitors can be identified as all the major confectionery companies in Europe
and the USA. These include but are not limited to Lindt, Cadbury, Galaxy, Ferrero Rocher, Milka
and Toblerone.
Milka can be seen as their main competitor as it is one of the most well-known and recognisable
chocolate companies in Europe. Its relatively cheap price allows customers to see their products
as not luxuries but rather an everyday product. This is Tony’s most important competitor because
Tony is aiming to change the chocolate industry by ensuring that every chocolate bar has an ethical
start to finish. According to Mondelēz International, Milka has recently joined Cocoa Life, a
sustainable cocoa sourcing program, as part of their new commitment to source all its cocoa
sustainably in the long run. Milka is now also trying to appeal to customers who want to be ethical
in their consumption choices and thus is a direct competitor.
3.2 Marketing Strategy
Tony’s Chocolonely has chosen a competitive strategy based on their portion in the industry,
objectives, opportunities, and resources (Kottler and Armstrong 2020). There are three possible
basic competitive strategies that Tony’s could follow, those being, focusing on overall cost
leadership, focusing on the markets in which they operate while serving only a few market
segments rather than the whole market, lastly, they could focus on differentiation. Focusing on
differentiation is the basic strategy that Tony’s has chosen as it aims to create highly differentiable
ethical chocolate bars in their product line and markets the products so that it comes across as a
leader in the chocolate industry regarding its commitment to sustainability and the eradication of
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slavery in the production of chocolate. They aim for product leadership and are open to new ideas
in the pursuit of new solutions.
In a more in-depth analysis of their competitive strategy Tony is identified as a market challenger,
a runner-up firm in the industry that is fighting hard to increase its market share (Kottler and
Armstrong 2020). Their goal is to take over the market share in an attempt to end slavery in the
chocolate industry. They have benefited from the “second movers’ advantage” and were able to
witness how the industry leaders have succeeded despite their inactivity in stopping the
exploitation that goes on behind their products. Tony improved upon this and hopes to become the
industry leader improving on the ideas of the pioneering processors.
Tony Chocolonley has chosen not to engage in a frontal attack where they try to match their
competitors’ products, advertising, price, and distribution efforts exactly. They have rather focused
on identifying their competitor’s weakness and gaps in the competitor’s coverage. These
weaknesses being the lack of social responsibility previously shown in the chocolate industry. This
way they have established themselves as leaders in the sustainably chocolate industry.
3.3 The macroenvironmental
The macroenvironment of a company includes the geographic, demographic, psychographic and
behavioral segmentation of their customers (Kottler and Armstrong 2020).
Geographically Tony Chocolonely focuses on western cultures, mainly Europe and North
America. They sell their products in the Netherlands, Belgium, Germany, Scandinavia and have
recently entered the United States of America. People of all ages tend to enjoy chocolate. However,
millennials tend to be more informed and connected than previous generations because of their
usage of social media platforms and the internet in general. Therefore younger people are
somewhat more likely to be aware of modern slavery and the way in which farmers are exploited
by big multinationals in the chocolate industry. Tony’s aims to target people who want to pay a
fair price for products so that in turn farmers receive their fair share. Their customers include those
who are more inclined to worry about the ethical implications of their consumption but also
appreciate the light hearted whimsical packaging of Tony’s.
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4. The Marketing Problem
4.1 Swot Analysis
Internal
External
O1: Possible increase in customer base
O
pp
ort
un
itie
s
Str
en
gt
hs
S1: Market Position
S3: Strong relationship with stakeholders
O3: Stronger Social media presence
W1: High dependency on brand image
Th
re
at
s
O2: Expand into more supermarkets
W
ea
kn
es
se
s
S2: Positive brand image
T1: Competition “Greenwashing”
products
W2: Low number of employees
T2: Rising concerns about health
W3: Low priority on profit
T3: Decrease in the purchasing power of
customers
Strengths:
S1: The chocolate industry market consists of different tiers, Tony’s Chocolonely find themselves
in the middle market. In this market position they are able to avoid any significant competitors
with the same goals. Tony has established relationships with relevant firms within the industry and
thus holds a strong position within the submarket.
S2: Tony has established themselves, successfully, as a leader in the sustainable chocolate
industry. In doing so they have created a positive public image of themselves. This may help them
attract new customers in the long run.
S3: Tony prides themselves on having a strong relationship with their stakeholders, particularly
their suppliers. They assess each supplier before partnering with them in an attempt to limit the
amount of exploitation occurring within their supply chain.
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Weaknesses:
W1: Tony has built their entire brand on their mission statement, which aims to eradicate slavery
from the chocolate industry. Although very noble, this may result in a large loss in the trust
customers have in them if they are unable to uphold their promises or if they decimate the brand's
character.
W2: The Tony chocolonely firm has grown from 20 employees to just over 120 employees since
their inception in 2005. This shows significant growth but is still relatively small in comparison to
other major brands such as Milka. Its small workforce, while allowing itself more control over its
direct employees, may hinder its ability to operate at a larger scale.
W3: Tony Chocolonely puts its main emphasis on achieving its mission , however it places very
little emphasis on its profits. In their 2021 annual report it shows that the company has made a loss
of approximately 4.7 million euros. With not enough emphasis on profit Tony may not be able to
continue its mission to spread awareness about the injustices in the chocolate industry.
Opportunities:
O1: As people gain more access to information, they become increasingly aware of social issues
they have not considered before, thus Tony has the opportunity to become the chocolate of choice
for individuals who have just decided to make more ethical consumption choices.
O2: More distributors want to carry ethically sourced products to appease their consumers who
have become increasingly more concerned about the ethical implications of their consumption
O3: Their quirky packaging and brand personality may translate well into more social media
campaigns where they are able to reach a wider audience of potential clients.
Threats:
T1: Other companies see that being sustainable is important to customers and may also transition
into marketing their products as ethically concerned. This is not the main threat though because
Tony wants to ultimately end modern slavery in the chocolate industry, the threat concerns the
rising trend of green washing products to attract more conscious consumers without implementing
any actionable change.
T2: An increasing concern about general health may hinder the potential of Tony to grow and may
influence the price which consumers will have to pay. Governments concerned about an increase
in obesity such as the Netherlands are implementing sugar taxes that incentivise individuals to not
consume sugary unhealthy products such as chocolate.
T3: A recent increase in oil prices and inflation has decreased the purchasing power of consumers.
This may negatively impact the purchasing behavior of consumers as they may not view chocolate
as a worthy purchase. Tony’s chocolate is also relatively expensive compared to its competitors,
so consumers might choose cheaper alternatives when their purchasing power decreases.
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4.2 The Marketing Problem analysis
The main problem with Tony’s is they are not a slave free company, despite that being the focus
of their entire product line. On one hand they claim never to have found slavery in their supply
chain, but they also admit that slavery is indeed part of their supply chain. Tony’s does tries to
remediate cases of slavery, but this will probably never be enough as long they do not have full
control over their supply lines.
5. Advice
Tony's chocolonely started the company to raise awareness and become a conversation starter
over child labor. From the beginning, Dutch label Max Havelaar assured the public eye that this
was a child-free labor ensemble. The company won recognition over the differentiating way of
providing socially acceptable chocolate to homes. An internal investigation in 2020 proved
otherwise. Its findings are an oxymoron towards the supposed values of Tony's chocolonely. In
2020 they found more than a thousand illegal children working there. Even though they were no
official documentation of child slavery within the company, the collaborative company of Barry
Callebaut was involved. In 2021 the shocking news that such a big chocolate company has
been officially removed from the American organization slave-free chocolate from their ethical
chocolate companies. Many newspapers have stated that this must be the company's biggest
scandal yet.
It is barefaced that Tony's chocolonely current marketing strategy is a mix of sustainable
marketing and contextual marketing. By definition, contextual marketing is an online marketing
model with targeted advertising based on search terms or recent behaviors. In this way, they
focus on attracting socially responsible people. The scandal had a massive impact on their
marketing goal. In general, the way people preserve Tony's chocolonely in current times is very
harmful to the company's future sales. For the company to continue its successful strike, the
marketing process needs to be adjusted. A helpful change would be if they habituated a more
robust marketing method. However, instead of the socially responsible segment, they could
focus on the quality of the product and the pricing marketing method.
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References
Abu Ghazaleh, N., Hogenstijn, M., & Sluiter, M. (2018). The story of Tony’s Chocolonely:
Amsterdam entrepreneurship cases. Innovation Exchange Amsterdam.
Blom, E., van Burg, J. C., Verhagen, P., & Hillen, M. (2015). Tony’s Chocolonely: How a
social enterprise is changing the chocolate industry.
Hart, E.K. 't. (2010, July 16). The significance of a Max Havelaar label on a Tony’s
Chocolonely
chocolate
bar.
Business
Economics.
Retrieved
from
http://hdl.handle.net/2105/7550
Matti, A., Ingram, V., Logchageva, K., & Laven, A. (2015). The ‘’middle” chocolate
market in the Netherlands A market differentiation study. Den Haag Part of the
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“Sustainability of Dutch cocoa and coffee imports: Upscaling sustainability
initiatives in international commodity chains, 91.
Tony’s
chocolonely
annual
report
2020/2021
(2021).
Retreived
from
https://tonyschocolonely.com/nl/en/annual-fair-reports/annual-fair-report-20202021/preface
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