Keeping chocolate on the menu as recession bites

Áine’s hot chocolate swirl sticks may look innocent sitting in their pretty packaging. But for those hooked on chocolate, they are a decadent chunk of cocoa heaven.

The swirl sticks are one of the most successful products developed by Áine Hand Made Chocolate founder, Ann Rudden, and one of the company's biggest sellers year round.

With the economy now showing signs of recovery, Rudden is in optimistic mood as her business heads towards a turnover of €1 million for the first time.

But surviving the recession has not been plain sailing for this Cavan-based chocolatier whose ambition since childhood was to have her own company.

Relocated

Áine’s was in the firing line when the slump forced individuals and companies to cut their discretionary spending.

People stopped buying expensive chocolates and Rudden had to make sweeping changes to her business to keep it afloat. This involved new branding, launching new and more affordable products and reworking her pricing structure.

Rudden studied bakery production and management at DIT Kevin Street before cutting her teeth in chocolate making, first with Butlers and then with Lily O’Brien’s.

She set up Áine Hand Made Chocolate in Dublin in 1999 but struggled to get a bank to back her business early on. She persisted and relocated, first to Oldcastle in Co Meath and then to her home town of Stradone where she converted a disused premises belonging to her father's garage business into a manufacturing facility.

Áine’s employs 10 people full-time and sells in Ireland, Britain, Dubai, Russia and Malaysia.

The recipient of 21 Great Taste awards, including eight gold medals, its sales are split between own-brand products for the retail trade, some contract manufacturing and bespoke chocolate items for corporate hospitality.

Before the recession corporate sales dominated the business. Now it’s the reverse. Retail sales account for almost 90 per cent of turnover.

While making chocolate might strike many as a dream job, it takes years for those producing by hand to build both production and brand recognition.

“It comes as a bit of shock to realise that you’re making this great product but people didn’t even know who you were,” she says.

“This made me very aware that you have to put an equal effort into developing your brand.

“We decided to go very upmarket from the beginning with beautiful black and white boxes. This meant we were mainly focused on the gift market and were selling into the likes of John Lewis and Harvey Nichols in the UK and to corporate buyers at home.”

However, a change in exchange rates hit UK sales while the economic downturn at home had a devastating impact on both corporate and retail sales.

“When the recession began, these boxed products [which cost from €20] just became too hard to sell in shops while our corporate business all but disappeared,” Rudden says.

“At one point we were facing into Christmas with a pile of stock and no orders. The business took a nosedive and we were left with little alternative but to completely reinvent ourselves.

“Our price points were proving too expensive for customers so we had to come up with another viable option,” she says.

“We decided to try individual chocolate bars and began by launching 100g bars of milk and dark chocolate in 2010. When these took off we extended the range and now sell over 18 different flavours.

“We are anticipating growth of around 10 per cent in bar sales this year. This will bring us to about half a million bars.”

While the chocolate bars were a lifesaver for the company, there was more to it than simply making them and hoping they would sell.

Rough patch

In 2009 Rudden and her team began the hard slog of attending farmers’ markets four days a week both here and Britain to raise the company’s profile and get feedback on the products.

This coincided with a review of the brand and the decision to repackage in order to make the products “pop” more on the shelves.

Getting deeper into the retail market meant sidelining the large expensive gift boxes and replacing them with smaller, lower cost items that hit the right price points for cash-conscious consumers.

“Switching to smaller products was more labour intensive and took a lot more effort from everyone but it kept us in business,” Rudden says.

“There were no quibbles about it as we’re very much a team here and were all prepared to do what was needed. What’s pleasing is that we have weathered this very rough patch successfully and are now seeing an uplift in sales generally and in corporate sales in particular. Companies are buying again.”

Rudden loves product development and has put a lot of effort into ensuring her products are gluten-free and cater for all tastes, including those who prefer their chocolate sugar-free.

She would happily spend all day experimenting with new products and flavours, but her focus is on scaling up without a compromise in quality.

“I’m a chocolatier at heart so my ethos is very much about handmade products. That’s probably why we are not bigger than we are, “ she says. “I’m still out in the production area every day because I’m passionate about my product. But we need to grow significantly now to take advantage of the fact that our brand is better known than ever.

"Things are very definitely moving forward. We are now making some own-label chocolate and have become involved with the Musgraves Food Academy. In addition our online shop, which currently accounts for only three per cent of our turnover, also has great potential.

“The challenge is to do so without sacrificing luxury, taste or ingredients.”