Chapter Seven
Small Business and Entrepreneurship: Economic Rocket Fuel
Video Case: Taza Chocolate
Taza Chocolate is an up-and-coming bean-to-bar chocolate manufacturer located in Somerville,
Massachusetts. Founder Alex Whitmore got the idea for the company when he made a trip to
Oaxaca to experience the history and traditions of Mexico. In particular, Whitmore was
fascinated by xocolātl, the ancient Mesoamerican practice of using the cacao plant for drinks.
The traveler was so enchanted with Mexico’s chocolate history that he decided to launch a
Mexican-style chocolate company back in the United States.
As a tribute to the Mexican chocolate making tradition, Taza uses an artisanal stone-ground
manufacturing method. Chocolate making involves roasting, winnowing, and grinding coco
beans, and Taza’s unique stone-ground method produces chocolate with a distinctive texture.
After Taza grinds and processes its coco beans, the raw chocolate is mixed in a variety of forms
and shipped out to customers. “We manufacture chocolate bars, Mexican-styled chocolate discs,
and chocolate covered nuts,” Whitmore says. Although Taza was founded only recently in 2006,
the company’s chocolate appears in nearly one thousand specialty and natural-foods stores in
more than 40 states.
Taza began with a good idea, but it was the founders’ tireless determination that successfully
peddled the first Taza bars into stores. Larry Slotnick, the company’s cofounder and director of
sales, helped launch the startup by selling bars to mom-and-pop shops around Boston and San
Francisco. “I spent the early years just walking around to local stores with samples of our
product,” Slotnick recalls of his first attempts to market the Taza brand. “After Boston was
getting going with 40 or 50 retailers, I started doing some traveling to San Francisco. I’d do
some research and have a list of the stores I wanted to visit, and I’d usually borrow a friend’s
bike so I could get around from store to store and neighborhood to neighborhood.”
In the United States, iconic chocolate producers like Hershey and Mars dominate the market,
leaving little room for new competitors. However, the founders of Taza believe that all-organic
Mexican-style chocolate is unique enough to become a breakout success. Unlike Hershey’s
creamy, smooth, chocolate bars produced in the familiar European style, Taza’s Mexico-style
chocolate is bold and coarse in texture—a difference instantly recognizable to the palate. In
addition, Taza’s all-natural ingredients are harvested through sustainable business practices. As a
result, Taza discs taste great while being extra good for farmers and the environment—a plus for
eco-minded consumers.
Another distinction between Taza and the top brands is distribution. Taza sells products in a
variety of specialty and natural-foods stores. And although consumers can’t get Taza discs at big
box retailers or national grocers, they can buy them directly at TazaChocolate.com. According to
marketers at Taza, the online store is an affordable way to sell to consumers and remain
connected even after the purchase. To maintain contact with chocolate lovers, Taza sends
engaging content over Facebook, Twitter, and e-blasts. “We try to provide actual information
and news,” says Stephanie Larason, Taza’s manager of customer outreach.
As a manufacturer of premium confections, Taza must sell large quantities to stay in business—
and that means selling in bulk to wholesalers and distributors. When selling to these customers,
price is important. Taza charges 40 percent less to its bulk-buying distribution partners. “Say we
sell a chocolate bar for $4.50 as the retail price,” Whitmore posits. “The wholesale price is going
to be somewhere around $2.70 per unit, which is a big difference.” According to Slotnick, the
discounted sale is worth it; not only do middlemen buy Taza chocolate in large quantities, but
they also provide long-term refrigeration, storage, and affordable shipping. Such services add
value to Taza’s business process. “Having distribution be a component of our overall sales and
marketing is critical to the type of product we’re selling,” Slotnick states.
At the end of the day, Taza’s sustainability ethic and direct trade agreement with suppliers may
provide the greatest contrast with the Hersheys of the world. Green marketing and direct trade
are appealing brand features among today’s eco-minded youth, and small chocolate makers are
paying attention to trends. Nevertheless, while green marketing helps Taza earn scores of new
trials, Larason insists that it is the brand’s irresistible chocolaty goodness that ultimately keeps
people coming back for more. “One of our great successes,” boasts the outreach guru, “is that we
have managed to combine the healthful and sustainability angle with ‘this is just straight-up
delicious and you want to eat it because it’s the best chocolate out there.’”
Source: Textbook Instructor Resources