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Ordinarily, Great Britain is not the first country to come to mind when thinking of chocolate. The names of Switzerland and Belgium are more likely to come up first, and then perhaps some other European countries (e.g., France, Italy, Germany, Austria). However, the British upmarket chocolatier Hotel Chocolat may deeply change our perception of Britain in association with chocolate; that is, following of course consumers’ pleasurable associations with the brand Hotel Chocolat. The brand name identifies both the company and its products (i.e., it is a ‘branded house’ of chocolate). Moreover, the company is a manufacturer as well as a retailer, offline and online, of chocolate products of multiple sorts, all under an encompassing brand, Hotel Chocolat.

Britain has been known for chocolate from companies like Cadbury and Thornton. But their products did not really succeed in raising an equivalent alternative that challenges the quality of chocolate from the better known ‘chocolate nations’. Cadbury in particular is most probably the main source for perceptions of British chocolate generated by consumers; in some of its products Cadbury blurs the distinction between true chocolate and chocolate snacks or confectionary. In 2010 the American company Kraft Foods took over Cadbury in an unfriendly maneuver; yet Kraft had a problem in swallowing the business of the acquired British company and just a year later split all of its confectionary arm including Cadbury to a new spin-off company called Mondelez International. Thornton’s already set a standard of higher quality chocolate delicacies in forms like bars and pralines. It also developed a chain of chocolate delicacy and gift shops. However, the enterprise expansion eventually ran into trouble and in 2015 the brand was acquired by the Italian giant Ferrero (well-known for ‘Ferrero Rocher’, also owner of Nutella).

Hotel Chocolat seems to be different, not merely for its positioning as an upmarket brand but in virtue of the fine feel and taste of its chocolate products — one immediately knows it is different when tasting one of the brand’s chocolate products. Drinking their hot chocolate with cocoa-flavoured cream makes a fitting complement to the pleasure of eating the solid chocolate delicacies. The experience of visiting a boutique shop of Hotel Chocolat (e.g., in Covent Garden in London, in the basement) also is an important contributor to conquering committed chocolate lovers.

Appetising Selection of Chocolates at Hotel Chocolat

Tempting chocolates displayed in cave basement of Hotel Chocolat’s Covent Garden shop

 

Hotel Chocolat was co-founded by Angus Thirlwell, CEO of the company, and Peter Harris (Development Director). In an earlier stage of their chocolate business, the co-founders established a company named ‘Express Choc’ as an online retailer of chocolates in 1993 (no doubt an early venture in e-commerce). They opened their first physical shop in the north of London in 2004 after changing the business name — this event practically marks the initiation of the brand Hotel Chocolat.

Over the years the brand has evolved and broadened its concept and it actually extends beyond products, shops and online store (retailing) — it also includes a Tasting Club (pre-launched 1998), chocolate workshops  (School of Chocolate), café-bars, a restaurant in London, and a hotel with restaurant in the Caribbean Islands. The company is proud of being a grower of cocoa for its products, a unique status for either a chocolate manufacturer or a retailer. The co-founders acquired a cocoa plantation in the Caribbean island Saint Lucia (2006), an initiative that brought Thirlwell back to his childhood in that part of the world, an origin of cocoa. In the estate of the plantation they opened their hotel (‘Boucan’) and a restaurant (2011). Their restaurant in London, established a couple of years later (2013) to bring West Indian tastes to the UK combined with modern British cuisine (e.g., ‘Slow Cooked Cacao Glazed Lamb Shank’), bears the name of the plantation and the year it was created (‘Rabot 1745’).

In an interview to BBC News, Thirlwell explained the reasoning behind the name — at start there seemed to be no logical relation to hotels. As for the choice of ‘Hotel’, Thirlwell replied: “It was aspirational. I was trying to come up with something that expressed the power that chocolate has to lift you out of your current mood and take you to a better place“, like going on vacation where one would stay at a hotel. As said above, seven years later and Thirlwell materialised the symbolic idea of Hotel into physical reality. Regarding the French wording ‘Chocolat’, he said that “everybody agreed ‘chocolat’ sounded better than chocolate”, which is hard to argue with, and added that the sound of the word almost suggests the sound of how chocolate melts in the mouth (he used the Latin term ‘onomatopoeia’) (BBC News: Business, 27 October 2014).

As reflected from his interview to the BBC, Thirlwell is a devout chocolatier, completely enthusiastic about chocolate. This impression is also supported in a personal page about Angus Thirlwell on the website of Hotel Chocolat. He continues to taste products every day and approves every recipe the company produces. A guiding principle that appears highly important to him is using more cocoa in chocolate products and less sugar. It is said that people started to crave cocoa long before anyone added a grain of sugar. This principle was practised, for example, in a product called ‘Supermilk’ that contains 65% cocoa, emphasises the ‘smooth creaminess of milk’, and includes less sugar than a dark chocolate — a feel of milk chocolate that is nearly a dark chocolate. In ‘Our Story’ webpage, Hotel Chocolat laments the overemphasis on sweetness in British chocolate: “Today, sugar is 20 times cheaper than cocoa, and a typical bar of milk chocolate contains more than twice as much sugar as cocoa”. Conversely, the mantra of Hotel Chocolat is explicitly: ‘More Cocoa, Less Sugar’.

A notion of this motto is felt very present indeed in a number of chocolate products of Delicious Orange Tangs by Hotel ChocolatHotel Chocolat, and it is probably at the root of the magic of their chocolate, and their business success. Just for instance, take their chocolate shells filled with Salted Caramel Cream, or Orange Tangs (orange-filled chocolate sticks) that are truly special and delicious (based on the author’s experience). It is all about the pleasure of eating genuine and fine-flavoured chocolate.

Formally, according to the website of Hotel Chocolat, the company operates 93 shops as well as cafés and restaurants. The Telegraph (24 January 2018) tells us that in the weeks running to Christmas 2017 and New Year of 2018 Hotel Chocolat opened ten new shops, bringing their total number to 100 across the UK. The store locator on the website (provided with an interactive map) suggests, however, that the company may have an even larger number of establishments in the UK — 153 locations are designated as ’boutique’ (shops). There are specifically 26 locations of café-bars, and the restaurant in London. It should be noted that café-bars are mostly (or always) integrated with shops, and Rabot 1745 is a complex including the restaurant, shop and café-bar. The brand is also represented in concessions (51 in total). The conflicting numbers are confusing and make it hard to determine the true current number of outlets of the company (could be a result of duplication in the counts of location types in ‘Our Locations’, apparently mainly due to concessions counted as boutique shops). Hotel Chocolat also has two stores in Copenhagen, Denmark, and several outlets in Ireland (seem to function mostly as concessions).


  • The revenue of Hotel Chocolat Group in the financial year 07/2016-06/2017 amounted to £105.24 million, an increase of 15.5% year-on-year; the net income in that period was £8.76m, an impressive rise of 114.6% year-on-year.
  • Hotel Chocolat Group was incorporated in 2013 and is listed on the London Stock Exchange since 2014 (the founders exchanged a third of their holdings for cash, receiving each about £20m, while in total raising £55m).
  • In the past six months the share price shifted between 240p and 380p, standing in late January ’18 at 333p; market capitalization: £375.5m.
Source:  FT.com, (Market Data)
Sales received a lift of 15% during the 13 weeks to 31 December 2017, attributed mostly to a special package in advance of Christmas (a gin ‘advent calendar’ package), a 100% cocoa collection, and the introduction of no-sugar milky chocolate range. Hotel Chocolat makes 40% of its annual sales in the run-up to Christmas and New Year (The Telegraph, 24 Jan. ’18).

A clear, well-stated and meaningful vision must have helped Hotel Chocolat considerably in its evolution and expansion. It stands on three values people in the company believe in: (1) Originality — not playing by the rules, rather doing things differently, and being creative and innovative. (2) Authenticity — growing cocoa, making and retailing chocolate, being true to cocoa and using natural ingredients (not letting sugar dull the flavour of cocoa itself and not mask the nuances from other ingredients, in line with the mantra cited above), and developing their own recipes in-house at the factory in Cambridgeshire (award-winning). (3) Ethics — committing to a deep sense of fairness that extends to farmers, customers and future generations (i.e., not spoiling the environment with waste in all stages of production).

The description of these three values or principles seems elaborate and specific enough to offer very clear guidelines for all managers and employees in the company to go by. They are accompanied by two business or marketing goals set by Thirlwell: excite the senses with chocolate and making it widely available. The two goals help to add focus to the mission of the brand: the first seems to pertain primarily to the products, the second underlies the network of retailing through physical shops and an online store. Other activities of Hotel Chocolat (e.g., hotel,  restaurants and café-bars, Tasting Club, School of Chocolate) contribute in enhancing the brand: deliver its message across and strengthen closer relationships with customers.

The business revolves around the brand ‘Hotel Chocolat’ and its development as it is their face and voice to the world. That is how customers and other stakeholders recognize everything they do. The more prestigious image of the brand is expressed through their products and packaging, primarily with their premium collections (‘tables’ — e.g., 86 pieces £65, 179 pieces £100). Pricing is also part of supporting the image, though Hotel Chocolat tries not to be excessive (e.g., one can find small-medium packages and boxes for prices in a range of £5-25). The concept of Café bars is gaining weight in aim to come closer to consumers — creating a venue where they can relax and enjoy a good chocolate drink with something light to eat (e.g., brownies) from Hotel Chocolat. The company may tap on a desire of Britons for high-quality chocolate, having a better own experience with chocolates from countries like Switzerland and Belgium. The founders protect the brand from dilution by avoiding, for example, displaying their products on shelves in supermarkets for sale (but their products are sold through concession in departments stores of John Lewis which fits better their brand image). The brand is taken care of meticulously by the founders to maintain an image they worked hard to instill: “a necessity of life, albeit a luxurious one” (Kate Burgess, opinion column, FT.com, 13 March 2016).

The brand of Hotel Chocolat has built its strength in quality of products and the expanse of its brick-and-mortar shops in addition to online retailing, supported by further activities or services. But attention must be paid to challenges ahead. First, how to balance resources correctly between keeping the quality of products and the expansion of the retail network — not falling to the trap of sacrificing the pleasure from the chocolates to their increased availability in the retail chain. Second, how to manage wisely and responsibly reaching out to other countries. In the interview to the BBC News (2014), Thirlwell concluded: “If you are specialist you have got to be absolutely specialist. There is a lot of competition and we want to be in the driving seat.” Consumers who appreciate and love genuine chocolate would surely hope that Hotel Chocolat succeeds in its mission so they can continue to enjoy their delicacies, and be excited.

Ron Ventura, Ph.D. (Marketing)

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Our sweet delight for the day is the macaron. In basic terms, a macaron is made of two rounded meringue-based biscuits that hold between them, like a sandwich, a creamy filling. Macarons may come in various flavours (e.g., lemon, coffee, strawberry, caramel-fleur-de-sel) and appear each in a colour associated with its flavour. But from here on, the whole difference lies between a good-quality Macarons by Ladureemacaron and a mediocre one: How brittle are the top and bottom biscuits, finished with sugar glazing on surface and crispy edges? How soft and tasty is the filling in match with the biscuits? And how well does the whole composition melt in your mouth? A fine colourful arrangement of macarons on display in-store can be a visual celebration to our eyes; and the choice of flavours for making them is an excellent ground for creativity and ingenuity.

Macarons were developed in the form we know them today in the 1950s and 1960s. However, they have become so popular and ubiquitous in just the past five to ten years. The macarons are French in origin; according to some differing narratives they have gone through a few forms since the 18th century and until reaching the one most familiar now. The traditional fillings were ganache, buttercream or fruit jam, but the range of flavours currently available is much broader.

Much of the credit for the rise in demand for macarons in recent years, so it appears, belongs to the French patisserie and confectionary maker Ladurée whilst being under the ownership and leadership of the Holder family since 1993. Louis-Ernest Ladurée originally founded his tea room and patisserie in Paris of the late 19th century; the founding Ladurée family developed its successful recipe of macarons sometime before or around the mid-2oth century. Their single venue was located on rue RoyaleLaduree flagship shop and cafe, Champs Elysees, Paris near Place de la Concorde. The acquiring Holder family relocated its flagship venue in 1997 to the Champs Elysées and established under one roof a shop, a café next to it, and a restaurant (on its second floor). Moreover, the new owner has been investing with dedication in elevating the Ladurée brand. Their international expansion started in 2005 with London and have since spread to cities in Europe (e.g., Milano, Dublin, Zürich), the United States (New-York), Middle East (e.g., Beirut, Doha), Asia (e.g., Seoul, Hong-Kong, Shanghai) and Australia (e.g., Sydney), covering nearly 30 countries aside from France. They have, furthermore, a strong presence on the Internet in a fine brand-designed group of websites with vending functionalities.

It would do unjust, however, to suggest that good macarons in Paris come only from Ladurée. Fine and tasty macarons may be easily found in numerous venues across the city, particularly at chocolatiers and patisseries (e.g., Pierre Hermé, Fauchon, Maison du Chocolat). Some are better known confectionary and pastry makers, others may be less specialised vendors, so one has to try a few macarons to find out which he or she likes best. The increase in popularity, nevertheless, has motivated bakeries and confectionary makers in other countries to produce locally their own macarons, and there indeed consumers should take greater care to find truly good-quality macarons. There is also a bundle of recipe suggestions for macarons on the Internet.

  • Macarons have become particularly trendy in the United States. It is said that Americans welcome them as a replacement for cupcakes that went out of favour. But then the question is: Are macarons adopted in the US just as a hip that will fade away after a couple of years or are they there to stay. Macarons are most likely to stay popular in their home country, France, and probably also in some of the European countries, depending on how deeply such treats are rooted in those countries’ culinary cultures.

What probably makes Ladurée different, except for the high-quality of its macarons, pastries and other treats, is the carefully built strength or equity of its brand. It is created and maintained around the prestigious decorated flagship venue, the selection of its physical locations, and its websites. People stand in line outside its main shop to buy their macarons. Alternately, connoisseurs may sit in its café on Champs Elysées, enjoy some of their delicious pastries, and order a take-away pack of macarons, chosen from a special menu card, to be carefully packaged and brought to the table. They have a boutique shop-in-shop at Printemps upscale department store. Ladurée also collaborated in the past few years with well-known fashion designers to enhance its prestige image, especially during fashion week fairs (e.g., in New-York and Milano).

There is yet a variant form of macarons, famous of its own merit, known as Luxemburgerli by the Swiss chocolate specialist and patisserie Sprüngli. Their recipe was brought-in in the late 1950s from a confectionary maker originated, as the name suggests, in Luxemburg, who collaborated with Confiserie Sprüngli. The Luxemburgli is somewhat taller than the classic macaron with more filling — it feels like a richer combination of biscuit and cream. Like many of Sprüngli’s chocolate and bakery treats, their Luxemburgerli is an artisan delight. It would be interesting to find out how Ladurée succeeds against Swiss veteran makers of chocolate confections or pastries like Sprüngli, Teuscher or Läderach.

Consumers often do not feel comfortable to indulge themselves with products or services that are discretionary, and furthermore a luxury, whether it is specialty chocolate pralinés, a dinner at a top-class or luxury restaurant, or a holiday on a cruise ship. People want to feel they deserve it beforehand. In some cases, when heavier spending is required on a luxury, consumers appear to have a greater difficulty permitting themselves to enjoy an expensive luxury than resisting such temptation; they may need to precommit themselves to make the indulgence (e.g., going on a cruise for vacation versus replacing an old dishwasher)(1). The contemplation over smaller indulgences, like a sweet treat, is less demanding, yet people want to feel somehow entitled, so as not to suffer guilt and regret after the act.

Consumers may consider spoiling themselves in different circumstances. The occasion may simply arise when people are on vacation, indulging on premium chocolate or macarons as a way of enhancing their enjoyment, making the best of the holiday. But for many consumers such an occasion may not account for a reason concrete or good enough to indulge. (Celebrating a public holiday or a birthday make a notable exception.) Consumers are likely to expect indulgences to be more appropriate as a reward for an achievement or good performance (e.g., completing a tough assignment, a high-grade in an exam). Conversely, it may be justified as a consolation for bad or disappointing performance (e.g., failing an entry exam, losing a client). There is also an expectation of consumers that an indulgent experience will be more enjoyable when it comes as a reward than as a consolation. However, all this effort of justification may be an outcome of misconception and insufficient learning by the consumers. Xu and Schwarz show that consumers indeed have such expectations, that may drive their decisions, but they are inconsistent with what they reportedly feel during the experience episode or shortly after it. Differences in emotions expressed in their predictions (expectations) were not reflected in their episodic memories. (2)

  • More elaborately, the evidence indicated that consumers feel similarly positive (e.g., enjoyable) about an indulgent experience, and incur similarly negative feelings (e.g., guilt), whether they have had a “legitimate” reason or not, and whether it occurred as a reward or as a consolation. Furthermore, as consumers get more distant in time from affective episodes they report on, such reports are more in accordance with their predictions than with their episodic memories. The prior expectations and the late reconstructed reports of consumers similarly draw or rely on global beliefs and general knowledge, unlike reports of episodic memories when consumers have “lively” access to specific memories of attributes of the product or event they indulged on and their evoked feelings. Nonetheless, people are not very good at reconciling their beliefs, predictions and experiences and hence their learning is impaired.

Consequently, for indulgences that are not really luxurious, rather discretionary, consumers seemingly worry too much about being “justified” or “deserving”to indulge, and what would be their feelings thereafter, as these concerns do not coincide with how they really feel while indulging; hence they may be encouraged just to enjoy the indulgence (e.g., macarons) as it happens.

Consumers may rightfully wish to relish their hedonic experiences later in time, beyond the momentary pleasure, but it may turn out to be more effortful. When they are engaged with the product of indulgence, their attention is focused on its attributes and how they enjoy them (e.g., texture, taste and appearance of the macarons). But as time passes after the hedonic experience, its details fade in memory and so the benefits may also be lost. (Hedonic experiences may have to be more profound, with stronger emotions, than having chocolate truffles or macarons, to have a more lasting effect on happiness.)

The smaller types of indulgence usually do not have significant financial consequences as a barrier, but they could have other negative consequences like damaging health implications — in the case of chocolate or macarons, it could be related to high sugar levels. A consumer considering this kind of indulgence may be stopped by concern for his or her health and seek a reason to justify this “irresponsible” behaviour.

Feeling sadness due to a previous event can especially attenuate such a concern before committing the indulgence, and thereof avoid it. However, not in all cases of sadness it should impede indulgence. If one’s goal is explicitly to indulge for the sake of it (e.g., having a festivity on a generous steak or a pack of chocolate truffles), sadness is more likely to highlight to the consumer the potential damages; in desire to prevent further losses to one’s well-being, the consumer is more likely to cancel the intended indulgence. If on the other hand the consumer had no such hedonic eating goal at the time he or she became sad, the indulgence is likely to be applied as a tool for moderating emotions. Specifically, it allows indulgence (e.g., eating macarons) as a consolation, helping to make one feeling better, less sad (3).

Facilitating or even encouraging consumers to indulge, as in buying and eating macarons, could mean making them feel more comfortable, reduce pressure from them that could make them feel in conflict — by using messages like “enjoy the moment”, “do it just for fun”, “carpe diem”, and “it is OK to indulge even without a reason”. Yet there are additional factors that can give an advantage to a particular brand. A strong brand of fame, as demonstrated by Ladurée, has the power to cause consumers to perceive that its macarons taste even better than they may objectively be judged (notwithstanding that Ladurée’s macarons are of high-quality, nice looking and tasty). There are social effects to account for, as when people stand in-line in front of a shop, visible to others who may join them. Furthermore, an artistically impressive display of colourful macarons, in-store or better in the front window, can create the visual inducement necessary to persuade consumers to accept the temptation.

Actually, having chosen the right macarons, you will not regret it.

Ron Ventura, Ph.D. (Marketing)

Notes:

1. Self-Control for the Righteous: Toward a Theory of Precommitment to Indulgence; Ran Kivetz and Itamar Simonson, 2002; Journal of Consumer Research, 29 (Sept.), pp. 199-217.

2. Do we Really Need a Reason to Indulge?; Jing Xu and Norbert Schwarz, 2009; Journal of Marketing Research, 46 (Feb.), pp. 25-36.

3. Hedonic Eating Goals and Emotion: When Sadness Decreases the Desire to Indulge; Anthony Salerno, Juliano Laran, & Chris Janiszewski, 2014; Journal of Consumer Research, 41 (June), pp. 135-151

Further reading on pleasure and hedonic consumption:

Pleasure Principles: A Review of Research on Hedonic Consumption; Joseph W. Alba and Elanor F. Williams, 2012; Journal of Consumer Psychology, 23 (1), pp. 2-18 (http://dx.doi.org/10.1016/j.jcps.2012.07.003).

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