Since its acquisition by Turkish food manufacturer Yildiz Holding, Godiva Chocolatier has expanded its reach into new distribution channels and markets through premium product innovations featuring its upscale Belgian chocolate.



All that glitters is, in fact, gold … at Godiva Chocolatier, that is. Best known for its signature Gold Box or Ballotin, the Belgian chocolatier has been in the business of making premium, upscale chocolates since its start more than 80 years ago in Brussels.

“The Gold Ballotin, which we are so well-known for across the world, is certainly one of the most identifiable packages across the globe and was one of the early offerings,” says Godiva President and CEO Jim Goldman.

Godiva continues to produce its iconic Gold Box. Today, a traditional 14.6-oz. ballotin of assorted chocolates contains such rich flavors as Midnight Swirl, Open Oyster, Macadamia Mosaic, White Raspberry Star and Milk Caramel Embrace.

But the chocolatier has begun thinking outside the Gold Box, too, through increased innovation and expansion, especially since its acquisition by Yildiz Holding, parent company of the privately held Turkish food manufacturer The Ülker Group, which purchased Godiva from Campbell Soup Co. in early 2008 for $850 million.

The acquisition has enabled Godiva to aspire to its full potential, Goldman says, thanks largely to Yildiz Holding chairman Murat Ülker, whom he calls “a visionary business builder.”

“He quickly saw the potential for the business and the desire to grow aggressively,” Goldman explains. 

“Under new ownership, we have opted to broaden the footprint all over the world,” Goldman continues. Godiva currently has a presence in 60 countries, including China, where the company recently opened its first standalone store in a new geographical location in 10 years.

Moving forward, “we plan to expand quite dramatically in China,” Goldman notes, adding that it will launch the largest Godiva store in the world in Shanghai during the first quarter of 2010. The chocolatier just debuted a shop-in-shop with a duty-free customer in Sydney, Australia, and has strategic plans to expand in Turkey as well.

Anytime, Anywhere
In addition to broadening its reach globally, Godiva is focused on growing its product offering “to lead across a wide-range of chocolate indulgence categories” in response to consumer demand for items that aren’t just seasonal, Goldman says.

Take Godiva’s 3.5-oz. tablets or bars, which come in five varieties: 72% dark chocolate; 31% cacao milk chocolate, a creamy smooth milk chocolate accented with hints of caramel; 85% cacao extra dark Santo Domingo chocolate, with hints of spicy, berry top notes; 72% dark chocolate with almonds; and 50% dark chocolate with orange.

Then there’s the brand’s most exciting launch in recent years: Godiva Gems. The new product is designed not just for enjoyment on special occasions or holidays, but “anytime, anywhere,” according to the company. As such, it come in various package sizes and shapes, and sells at affordable price points, making it accessible to a larger consumer base. The chocolates are individually wrapped in jewel-tone foil and boxes, with a nod to Godiva gold. The line is made up of three varieties - Truffle Gems, Caramel Gems and Solid Gems - available in both milk and dark chocolate.

Goldman calls Gems “the most significant global launch we’ve ever undertaken.”  Although the product stays true to the chocolatier’s gold standards, “it is a different expression of Godiva,” one that can be enjoyed every day, he says. At a suggested retail price of just $4.99 for a standup bag - an “unheard of price for Godiva quality products,” Goldman notes - Gems are fit for individual consumption, sharing and casual gift-giving. Plus, they look fantastic in a candy dish, he adds.

Launched in September, Gems currently are available in distribution channels worldwide, including Godiva’s heritage wholesale accounts, department stores - after all, it was there that the brand first got its start back in 1966 at Wanamakers in Philadelphia.

“In the last three months, we’ve seen double-digit growth in department stores,” says Chris Mattina, vice president, wholesale. But the introduction also is driving sales in nontraditional accounts for Godiva. For example, Gems can be found in U.S. grocers such as Safeway, Publix and Wegmans, where consumers now shop for premium chocolate 12 months of the year, Mattina notes. This entry is made possible through Gems.

“In the last six months, we have put together a completely new network called the Grocery Channel, consisting of Godiva sales representatives, led by Director of Grocery Greg Woodhouse, a national broker network, gourmet distributors, independent grocers [and the aforementioned stores],” he says, “and we’re going to be branching out in other areas within grocery and drug.”

Strategically, “we are basically going where our consumers are and have told us they would like us to be.” Mattina explains. “As our customers have changed their buying patterns, we’ve also moved in those areas.” This includes lifestyle accounts such as booksellers Barnes & Noble and Hudson News, Victoria’s Secret and Peet’s Coffee as well as club stores like Sam’s Club. 

“We have a very deliberate merchandise approach,” he continues. While Gems will be placed in the premium chocolate section of a store, they also will have secondary permanent locations and fixtures in baking, floral, wine and greeting card areas, he describes.

Finally, Gems are part of the product offering at Godiva Boutiques, which Goldman calls “an important piece of the DNA of the brand.

“When you run your own stores, you have an opportunity to connect with the customer,” he says. “We focus on creating an experience.”

The first Godiva Boutique opened in the United States in 1972, the same year that the company launched in Japan. Godiva hit the Hong Kong market in 1998.

“Asia is a very important market to us,” Goldman notes.

Today, Godiva boasts 260 boutiques in the United States alone; it operates another 200 stores internationally.

Golden Moments
In its efforts to expand, Godiva has created a marketing campaign that repositions the brand first by highlighting its origins (Belgium 1926) and the Lady Godiva logo, according to Lauri Kien Kotcher, senior vice president and chief marketing officer.

Advertisements also draw attention to the chocolate itself, with a focus on the quality of ingredients and not just the packaging.

Third, they play on “the emotional connection our brand brings,” Kien Kotcher notes, adding that these “Golden Moments” include instances of celebration, love, temptation and personal indulgence between a couple, platonic friends and family, and even a woman and herself.

The fourth element still is Godiva gold, she says. The modern definition of luxury has changed, being less about possessions than about what kind of person you are, Kien Kotcher says, and as such, Godiva remains a luxury brand.

The new ads appear in print media such as Vogue, Vanity Fair, Elle, Wine Spectator and New York Magazine, and in major outdoor installations at airports such as LAX and JFK. Internationally, the campaign will hit Hong Kong and Japan in advance of its two major candy-buying holidays: Valentine’s Day and White Day, one month later, when women do the giving.

Gift-giving is very important to Godiva, Kien Kotcher says, which is why the brand offers gifts at every price point, from $5 to more than $100.

“During the holidays, we also know that consumers like to treat themselves,” she adds.

In an effort to drive candy dish behavior, Godiva built The World’s Largest Candy Dish, filled with 25,000 Gems, for display at the Times Warner Center in New York City last October, notes Rich Keller, Godiva’s business director.

Although the company uses Facebook and Twitter, it’s also developed social media site, www.idratherhavechocolate.com, which brings together chocolate lovers.

“People who love chocolate want to talk about chocolate,” Keller says.

The private community features photos, comments and personal anecdotes from consumers. Every day, one winner receives 100 free Gems.

In addition to its social media site, Godiva taps into behavioral trends via a private online space of 600 women, Keller adds. Through daily exercises with this group - diaries, shop-alongs, mystery surveys - the company discovered demand for more approachable price points for premium chocolate that is convenient for everyday eating; it also learned just how challenging the economy has been for consumers.

What kind of impact has the recession had on Godiva?

“The truth is, there are very few businesses that are immune to what’s happened in this global economy,” Goldman says. “It has been a challenge for everyone. We feel like things are improving out there, but it’s not going to go back to bright overnight.”

However, the premium chocolate category continues to grow, he notes.

And although Godiva’s products are premium-priced, “at the end of the day, we’re still pretty accessible,” Goldman says. “For a little bit of money, people can really enjoy our chocolate and give it to others to show they care.

“We’re not re-gifted,” he continues. “People love getting it, and they love eating it … even in recessionary times.”

As its marketing campaign for Gems indicates, consumers can enjoy a little Godiva every day.

“Now’s a great opportunity for us to take advantage of the fact that the consumer is more and more interested in premium chocolate year-round,” Goldman says.

Make that a golden opportunity.

Sidebar: For Every Season ...
Godiva Chocolatier offers “a variety of seasonal truffles that people love during that special time of year,” says President and CEO Jim Goldman. For example, during the recent winter holiday season, the company produced candy cane, eggnog and gingerbread truffles. And for Valentine’s Day 2010, it will introduce the following:
• Sparkling Heart Collection of effervescent chocolates that pop while they melt in your mouth, featuring Sparkling Mimosa, Sparkling Classic, Sparkling Bellini and Sparkling Rose.
• Fabric Heart Gift Boxes, made with crimson pleats and a voluminous rose layered in satin and chiffon, in two sizes.
• Paper Heart Gift Boxes, featuring beautifully illustrated floral motifs formed from heart shapes, in three sizes.
• Limited Edition True Love Gold Heart Assortment, in tribute to Godiva’s partnership with the Elton John AIDS Foundation, containing ganaches, caramels and pralines in milk, dark and white chocolate.
• Keepsake Tin and Truffle Gift Box, featuring signature truffles favorites and limited-edition flavors.
• ”Valentino” the Bear, Heart Goody Bag and Heart Lollipop novelties.

Sidebar: Made to Order … Online
Consumers worldwide can get into some Godiva at www.godiva.com. There, shoppers can purchase the company’s core products as well as seasonal items, gift baskets and towers, and wedding/party favors.

New additions to the site include gift sets such as Chocolate For Breakfast and a Chocolate Tea Party Basket, a Fondue Dipping Set and coordinating Chocolate Fondue Basket, Caramel Pecan Bark and Gourmet Fruit & Nuts.

For baked goods lovers, Godiva’s new online Bakery Shop offers visitors a chocolate ganache layer cake, assorted chocolate cupcakes, chocolate chunk brownies and chocolate coconut macaroons, all of which are shipped and handled with care for freshness.

Godiva directs consumers to the site through various vehicles, including two targeted e-newsletters containing special discounts for shopping online and in boutiques as well as coupons for free gifts with purchase, like chocolate-dipped strawberries.


Hidden Gems

The formulas used to produce Godiva’s premium chocolates are kept behind closed doors … literally. In fact, when Thierry Muret, executive chef chocolatier, set out to create the Legacy Truffle Collection, which debuted last summer, he actually retrieved recipes (some handwritten) from a vaulted safe at Godiva’s Brussels plant, bringing them back to the 175,000-sq.-ft. U.S. facility in Reading, Pa. It is here that many of the industry leader’s chocolate, truffle and caramel products are born.

Caramel Confidential
Godiva knows caramel. Just ask Jeff Rhoads, processing area manager at the Reading plant.

“You will not find a better caramel,” he asserts. “Ours is the best in the world.”

Although it makes a variety of product fillings, including hazelnut, “Godiva is really known for caramels,” agrees Brett Barnello, vice president, North America supply chain.

All caramel is made with the same ingredients, Rhoads notes, but Godiva’s secret is in the recipe and the ratio of dairy and sugar.

After cooking (a proprietary process) and conditioning, the caramel is conveyed and deposited into a hopper atop an extruder. The extruder pumps out 24 ropes that are transported through a cooling tunnel to a guillotine cutter, which slices them into individual pieces. The pieces then head toward one of two enrobers on the line. Each piece receives two coats of chocolate and is automatically decorated or strung on top with chocolate in a cross-hatch pattern.

“Attention to detail is paid to every one or our caramels,” says Chris Mattina, vice president, wholesale. “Stringing is part of the artisanship.”

Altogether, the caramel line produces 17,000 lb. per shift. It also has the ability to produce co-extruded products, creating dual layers of caramel and dark chocolate, milk chocolate or raspberry, for example. In addition to producing Caramel Gems, the Reading facility turns out Solid Gems and Truffle Gems, which it began doing in June 2009.

Truffle Gems are, essentially, miniature versions of Godiva’s famed full-size truffles and, thus, produced in a similar manner, Rhoads notes.

First moulds set in an 8x14 configuration are tempered so as not to shock the chocolate, which is deposited into the moulds. The moulds then are vibrated to remove excess air. Next, they are turned over and oscillated so that the chocolate completely covers the shell moulds. The truffles’ centers are deposited into those shells, and the moulds are booked together and sealed by heat. Finally, the moulds are separated and the truffles demoulded into plastic trays. The entire line runs 22 moulds per minute.

If you look closely at the finished product, Mattina points out, you can see that each Truffle Gem has Godiva written into the chocolate, an example of how much thought went into the line’s creation.

Under Wraps
High-quality Belgian chocolate is Godiva’s calling card, to be sure, but so is its packaging. According to Jim Snyder, manager of production and packaging, it’s the Gold Box that gets consumers to purchase Godiva the first time, and it’s the taste that keeps them coming back. 

Godiva’s packing room consists of four lines, two of which use pick ‘n place robotics. Each of these latter lines features a bank of robots in two lanes made up of nine cells, each of which place 18 pieces of candy into Godiva’s signature Gold Box; a finished unit is packed every four seconds. (Heavily decorated products cannot be placed robotically).

“We have the ability to combine both robotic lines for larger production,” Snyder adds.

Just past the bank, Godiva’s more experienced workers examine the candy before it’s boxed to “ensure Godiva quality,” Snyder notes. This includes looking to see that each piece has been placed right-side up. Additional workers then hand-place top pads, nutritional panels, lids and tamper-proof gold seals on the boxes, as needed; in some cases, they hand-tie the boxes with ribbons. The packaged products go up a spiral center tower to an overhead conveyer that takes them to the shipping area.

On a daily basis, Godiva’s quality-control team manually reviews samples of all candy made in the last 24 hours, checking weights and doing visual inspections of coating and centers. The group also conducts chocolate tastings in the plant’s lab/kitchen, home to the company’s senior chief chocolatier (and secret weapon).

Secret Weapon
Belgium-born Thierry Muret has spent half his career (21 years) with Godiva, creating recipes for its leading products, including Gems. Today, he splits his time between the North American kitchen in Reading and a fully staffed European kitchen in Brussels, home to Godiva’s original plant, which opened some 60 years ago. All products are hand-created and -cast without support equipment in one of the two 1,100-sq.-ft. kitchens as part of the company’s “international R&D” group, Muret says.

The Reading “research facility,” as he calls it, features 12 linear ft. of bluestone marble tabletop to temper the chocolate; the room is kept at 70-72° F and 50% humidity year-round. Two other chefs share the U.S. kitchen with Muret: Anthony Polakowski, a four-year veteran, and David Funaro, who has two years at Godiva under his belt and focuses on  the Asian market.''

But before heading to the kitchen, all three chefs meet in a mini conference room that follows the Feng Shui design philosophy, featuring a bamboo floor and pillows in the corner, among other details. There, the chefs informally exchange ideas about new products based on need statements it receives from Godiva’s marketing team. It then creates a prototype to present to marketing before testing on consumers, who provide feedback to help modify the innovation as needed.''

For example, the 20-piece Legacy Truffle Collection was the result of a request from the international marketing team to address Godiva’s 60-year Belgian chocolate tradition. It features select pieces from the past, including Original Dark Chocolate (1946), Belgian Premiere (1950), Royal Mathilde (1980), Grande Truffle (1986), Praliné (1988), Harvest Spice (1992), Pabana (2004) and Crème Brûlée (2008).

Inspiration for new products comes from different sources, including the fashion industry, says Muret, who regularly receives reports on what’s happening on the catwalk, including colors, textures and “the mood of the people.” He also follows ingredient trends.

As Godiva expands, Muret and his fellow chefs always keep “the style of the brand” in mind, Muret notes. Although they give new products modern twists, gold remains a tradition, he asserts.

So does variety. When it came to the creation of Gems, the goal was “a little bit of Godiva, every day, everywhere,” Muret says. Unlike Godiva’s boxed chocolates, Gems were meant to be small, portable and individually wrapped, he explains.

“But it’s still Godiva,” Muret states, adding that the company uses the same high-quality ingredients in all its products. Gems simply capture the essence of Godiva in miniature.

Now that Godiva’s latest secret is out and in stores, Muret and his team are looking ahead to the next five years. What’s next for the premium chocolatier? That’s classified.

At a Glance
Godiva Chocolatier
Headquarters: New York City
Annual Sales: More than $500 million
No. of Global Employees: 4,000+
Products: Chocolate assortments (including individual chocolates and truffles), freshly dipped in chocolate (strawberries, dessert cups, marshmallows, chocolate coconut macaroons, etc.), home entertainment (biscuits, coffee and cocoa), self treat (chocolate bars, tablets, chocolate-covered pearls, Gems) and baked goods (chocolate cupcakes, brownies, chocolate ganache cake, chocolate cheesecake)
Major Brands: Godiva and Godiva Gems
Plants: Two (Reading, Pa., - 175,000 sq. ft., and Brussels, Belgium, - 250,000 sq. ft.)
Management Team: Jim Goldman, president and ceo; Lauri Kien Kotcher, senior vice president and chief marketing officer; Dave Marberger, senior vice president, chief financial officer and chief strategy officer; Donna Edbril, senior vice president and chief legal counsel; Wayne Puglia, senior vice president, research & development and quality; Bill Kornegay, senior vice president, global supply chain; Ed Jankowski, senior vice president and general manager, North America; Kris Breuer, senior vice president, global human resources; Nicholas Bouve, managing director, Europe