Purdy’s Chocolatier: Private Brand Sweet Spot

You could say daily tasting of newly invented confections is the occupational hazard of Peter Higgins, president and chocolate scientist of Purdy’s Chocolatier, a Vancouver, Canada based maker and 62-store private brand retailer of chocolates.

Peter Higgins, president and chocolate scientist of Purdy’s Chocolatier

Sounding like an oenophile, Higgins explains, “the fermentation process is key to chocolate flavor development”. He says the best way to taste chocolate is to let it linger and melt on the tongue to allow the aromas to develop. “I just tasted 61% Peruvian and 72% Ecuadorian products we are just finalizing…and marzipan, just because I felt like it.”

His fine-tuned palate and knowledge comes from a Masters of Food Science at the University of British Columbia, and his previous work in the wine industry. The passion for the chocolate business comes from working closely for the past 15 years alongside two generations of the Flavelle family, the hands-on owners of Purdy’s.

Founded in 1907 by Richard Carmon Purdy as a single shop on Robson St. where chocolates were made in house, the company built a reputation for fine chocolates.  In 1963, Charles Flavelle bought the four-store company and its manufacturing facility with a loan from his family. Today, Charles, 82, is the Chairman, while daughter Karen is the CEO. Higgins was appointed earlier this year as President of the company, which employs about 800 people.

As a private company, Purdy’s does not release sales figures, but has clearly taken advantage of some recent turmoil in the premium chocolate market to become one of the leading premium chocolate retailers in Canada through its stores, online and corporate businesses. Laura Secord, after facing financial trouble and a fatigued brand image in their 125 stores, changed hands again in 2010, while 30-store Bernard Callebaut filed for bankruptcy the same year. There is plenty of competition from online and independent artisanal chocolate boutiques and international brands like Godiva have stepped up their market presence as shop-in-shops and their own stores.

Always a lean manufacturer, Purdy’s approach is to drive value by looking for ways to continually improve every step of their process, but never compromise on the chocolate quality. Price points are strategically above mass but not elite. “We don’t sell $80 boxes of chocolate.” A typical Purdy’s assorted 1 lb box retails for C$25.95.

Satisfying Cravings
Being in the business of the “Food of the Gods”, Purdy’s operates in one of those rare and enviable product categories that enjoys near universal and strong emotional appeal. No one needs chocolate. They crave it. It’s an indulgence which consumers have strong personal preferences and purchases are influenced by mood and occasion.

Purdy’s primary customer is a woman aged 35-45 who is the main purchaser for the household, but their demographic varies widely. Two thirds of their customers are women who buy chocolate for the family, for gifts, and for themselves.

Innovation-friendly Category
Chocolate originates from the ancient aboriginal cultures in the Americas who used it as a currency and a bitter drink. It remained a drink until the mid-nineteenth century when a Dutch chemist discovered a method of separating the cocoa butter from the powder. Then British industry began mass-production, and the Swiss invented milk chocolate.

Today, the confection category continues to innovate in response to consumers who are looking for food enjoyment, premium products and healthy options – the anti-oxidants properties of high cocoa content has been well touted. Consumers are definitely willing to try new chocolate products.

Purdy’s is well known for their classic hedgehogs they have offered for 25 years, as well as English toffee, caramels and creams, some of which are the same recipes from the founder and remain among their best sellers.

We have increasingly realized the importance of innovation for the company.” Says Higgins who claims no chocolatier has more range than Purdy’s, “Chocolate development is at the heart of what we do. From searching the world for ideas and premium quality ingredients, to experimentation with unexpected combinations and textures is a continuing effort. He says everyone is a “foodie” today, and they are open to try new temptations that are more adventurous.

Savory, spicy, salty, sweet

Gary Mitchell, head Chocolatier for Purdy’s

since 1993, leads product innovation. His in-house product development team works on new product offerings in their kitchen, experimenting with new combinations, flavors, textures. Then they perfect the crystal formation to achieve the look and thickness of the shell, the perfect snap and shine. Spicy and salty combinations like chili and chocolate, Himalayan pink salt, to tiramisu or the Turona, a Spanish confection of hazelnut, traditional Parisian ganache are in Purdy’s assortment now.

Challenging traditional tastes, and generating surprise and intrigue with customers are savory combinations one might not expect: goat cheese and chardonnay topped with dried apricot with a white chocolate ganache centre coated in chocolate. The brie, fig, basil and lemon zest truffle Mitchell created in 2011 won Best Truffle award at an industry trade show. Other new products like the Mayan Collection are inspired by travel and food.

In 2013, Purdy’s will launch single-sourced chocolates from Ecuador and Peru. Higgins describes the Peruvian blend as having a unique taste he attributes to the lower elevation of the river valley region in Peru where the cocoa is produced. “It has unique taste with rich sweet fruit notes.”

The idea of single-source ingredient provenance and responsible sourcing is on trend in the industry and demanded by consumers who are more aware and interested in where food ingredients come from. Joan Steur, self-described chocolate market expert, identified it as the number one trend on her website: “We want authenticity, natural ingredients and traceable origins.” It gives brands another way to differentiate their assortment and the opportunity to connect the chocolate lover to the source and the “feel good” side of the story, like Godiva’s FEED 8 Origins Collection.

Cocoa supply & ethics are increasingly important to a sustainable business
Purdy’s buys semi-processed cocoa from the leading Belgian suppliers, but is increasingly responsible for specifying the source of the raw cocoa as it becomes more involved in supporting farmers in sustainable production practices. Most of their raw cocoa ingredients come from Ivory Coast and Ghana, but also from Peru and Ecuador. According to ICE market data, African countries produced 73% of the 3.9 million metric tonnes of cocoa in 2011-12. Bloomberg estimated global sales of chocolate confectionery reached US$100 billion for the first time a year ago.

Yet despite this growing global demand for cocoa, supply is not increasing and production problems persist in West Africa. It is a critical export commodity and the livelihood for millions of single-crop micro farmers with orchards of just a few hectares. Some of their cocoa orchards are more than 20 years old and susceptible to pests and disease.

As buyers of semi processed cocoa, Purdy’s business is dependent on the available quality and prices for their ingredients, which are traded as futures on London and New York markets. They also know that some consumers increasingly take a keen interest in sustainable practices far upstream. It is apparent that Purdy’s shares an enlightened interest with other leading international member companies such as Barry Callebaut and The Hershey Company who are members in the World Cocoa Foundation, an organization which works to improve farming practices and a sustainable cocoa economy.

Higgins traveled to Ghana in 2011 and saw first-hand how education could make a significant impact on both yield and incomes for cocoa farmers. WCF provides education of farmers in managing crops for weather, disease and insects. Such holistic partnering with suppliers, growers and through customer feedback, he says, “Goes to who we are as a company”.

Purdy’s Creates a New Retail Experience
Aside from taste testing, product development and sourcing, Higgins is also is responsible for the retail side of the business: overseeing store-design and staffing.

Expansion from their Vancouver base has been methodical and carefully planned, after learning from a failed test of six stores in Seattle in the late 1990’s. From a strong western base, expansion into Ontario markets began in 2007 with strategic locations in premium, enclosed malls in affluent markets like London, Oakville and Markham.

Aiming for a exceptional experience, a new store design developed in-house was introduced this past September at three stores in the west and in Markham in the east with 7-8 more store renovations planned for 2013. The new design moves away from traditional dark wood cases, the store reaches out to the lease line and makes the product the star. It’s light and bright, accented with Purdy’s signature purple in glass. Frameless backlit chocolate imagery, the movement and whimsy of a chocolate fountain, sophisticated man-made granite counters, clear risers create a contemporary European look where the product assortment is displayed to tempt.

A critical element to Purdy’s eastern expansion strategy was staff and training says Higgins, who took Mr. Flavelle’s advice. “He said it was very important that I build a culture,” transplanting key staff for six months to support the launch into eastern Canada. Higgins attributes his people’s passion for chocolate, customer service and detailed product knowledge training as essential drivers of productivity. Endless events, marketing and public relations efforts help Purdy’s generate opportunities to introduce the taste of Purdy’s to a new market.

The historical trade patterns and nuances in consumer tastes will continue to influence the business of chocolate globally. Peter Higgins leads Purdy’s goal to sustain their position as Canada’s best in class chocolatier: at the surprisingly accessible sweet spot for premium chocolate.

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Kirsten Mogg
Kirsten Mogg Founder and managing director of Gyld Collective , a collaborative communications and branding firm, she is also contributing editor to Trends Magazine , a Canadian business publication, where she writes about retail and design innovators. Trained in business and communications, she has worked with many leading lifestyle and fashion brands, innovative manufacturers and retailers in Canada, the US and internationally for over 15 years.