Theo Chocolate is an organic and fair-trade chocolate factory in the US that was recognized for its local identity and practices. However, it was running at a loss for its first few years as it invested in its plant, employees, and marketing. By 2009, it had run out of cash and the owner Joe was unsure how to proceed. The document discusses Theo Chocolate's background and operations, and provides some immediate and long-term solutions for the company to generate revenue and stay in business while maintaining its social responsibility.
2. Case Synopsis
Theo only organic, Fair-Trade, Bean-To-Bar
chocolate factory in the United States.
The company was recognized because of
its local identity and fair trade practices.
The company ran in losses but in 2009 ran
out of cash to further operate and now
Joe is wandering what to do????
3. Case facts
Theo Chocolate (named after the Greek name for the cacao tree,
Theobroma Cacao or food of the Gods)
Theo Chocolate began producing its first Fair-Trade certified, single-
origin, blended dark chocolate bars in March of 2006.
By the fall of 2009, had built a unique brand.
Its first few years were unprofitable as the company made
investments in plant, people, and marketing.
He wanted to increase the perceived value.
Then in 2005, a group of investors with interests in some of those
companies decided to partner with Joe.
Joe had little trouble finding smart people to come work.
Adult supervision was missing.
4. Case facts
They spent the next 18 months building the factory in a historic
building.
The former home of the Red Hook Brewery, in the quaint, eclectic
and artsy Fremont district of Seattle.
In March 2006, the company began producing its first Fair Trade-
certified, single-origin and blended dark chocolate bars at that
factory.
FY2010 might be Theos first profitable year.
6. Case Inference
Joe was proud of
this value chain of
making chocolate
Different products Theo
chocolate had to offer
and how much revenue
that was generated by
each one of them
7. Case Inference
Competitors that were present in
the market were many and they
were well established in the
market. Most of these companies
were able to sell in the market
individually and still sustain.
8. Case Problem
Should the company stay true to its socially-
responsible roots to make profits?
What are the alternatives to generate revenue
and stay in business?
9. Immediate Solutions
≒To keeping social responsibility in mind, Theo can reduce
the weight of the chocolate and sell at the same price.
≒Increase the cost of tour of the factory and also the
number of persons.
≒Ever person who comes to visit the factory then he/she has
to buy $X values of chocolate which would be of premium
variety and exclusively available on the factory outlet only.
10. Long term Solutions
≒Apart from the niche segment they can target the main
stream
≒Expand their distribution to other states in US.
≒Develop their own organic farms