John Scharffenberger thinks that bean-to-bar makers are doing it wrong. I chatted with him recently for my upcoming book about American bean-to-bar chocolate, and most of our discussion was about the mistakes that the industry is currently making.
If you haven’t heard of John and his company Scharffen Berger, well, let’s just say they started the bean-to-bar movement in the United States. John and his partner, Robert Steinberg, actually coined the term “bean to bar” and inspired a generation with their high-quality chocolate: Dandelion, Fresco, Rogue, and more have all mentioned the company’s influence to me. Scharffen Berger sold to the Hershey Company in 2005 for about $50 million, and now you can find their bars and products in mainstream grocery stores across the country.
John is still pretty excited about the exploding bean-to-bar movement here and abroad, and he told me that he loves Marou, Dandelion, Guittard, Valrhona, and Dick Taylor, among other brands. However, he also has a lot of advice. Here are some of his thoughts.
1. The prices are too high.
“If you’re trying to make something for the 99 percent and your pricing is for the 1 percent, there’s a disconnect. You don’t sell your first Tesla for $100 million. People aren’t eating as much chocolate as they would be if it was better priced. By making it so exclusive by having all these constraints, you end up excluding people.”
2. Scale is a problem.
“A lot of people’s ideas of their scale is not going to work. They’re going to be bumbling along forever. Scharffen Berger hasn’t gotten any bigger than it used to be, but nobody has gotten bigger than Scharffen Berger. That’s kind of weird.
“Brands like Marou are going to do really well. They’re not planning on having this itsy-bitsy little company. They just want to make really good chocolate. They don’t make it an intellectual exercise.”
3. A big company can make good chocolate.
“I think the quality of Scharffen Berger now is pretty good. Two of the bean-to-bars that were made after we sold have been better than anything we made: a single origin from Brazil and a single origin from Vietnam.”
4. Makers should target the home baking crowd.
“Forty-five percent of our products were used by home bakers. They were not candy bars. It’s a big mistake [to focus on solid bars]. Candy bars are 20 percent of our market per sales, which is not very much. The consumer is crazy about good baking products.”
5. Only make a single-origin bar with really special cacao.
“You have some of these guys who are buying several tons of beans and bringing it here and selling by the bag, and everybody has that origin. [But even] Chuao is terrible every few years; it’s mediocre two to five years, and it’s great one of the five years or so.
“Single-origin bars definitely have a role. They put a focus on geography and on the abilities of growers to produce things that are of high quality and also to make more money. From that standpoint, it’s great. But if you’re trying to actually deliver a product that is consistent you want to make it standard.”
6. Blends can be amazing.
“In our 62 percent, we usually have 7 components. And in our 70 percent, we had sometimes 10 flavor components. We put things together to come up with as many flavors we could possibly pack into a bar. That’s how you do it."
6. Ethics should guide your business.
“Everybody works with these wonderful people in third-world countries, and the trick is this: Are they getting any money for what you’re paying them? You can’t rely on mechanisms like fair trade to do it. You have to make sure it works. Robert and I were both hippies of the sixties. We paid living wages to everybody, and we gave everybody health care. We believed that that’s the way to run a business. And you don’t make those ethical decisions like pertaining to marketing.”
7. Making money in this business isn’t easy.
“What happened when we sold? There was a huge amount of press, especially about that whole amount of money we got. My take is that a lot of these people [who are now making chocolate] said, “Oh! Look at this!” They were thinking that this is a business that one day they could do and retire. And maybe bought [into it]. I think that played a role in people’s trajectories into the [chocolate-making] business."