One-on-one with Thompson Brands’ CEO Gene Dunkin
Thompson Brands’ CEO Gene Dunkin reveals how this midsized chocolate novelty company has capitalized on its heritage and its all-natural formulation philosophy.
When Gene Dunkin took over Meriden, Conn.-based Thompson Brands (Thompson Chocolate) more than six years ago, he came to realize that this 137-year-old company was actually still ahead of its time.
“It was clear that Thompson Chocolate’s core go-to-market principal was the delivery of a quality product that was made with all-natural chocolate,” he says. “Our niche was in the more premium segment. We were not the low-cost producer in the chocolate novelty segment. We weren’t going to compete on price like compound chocolate products.”
In addition, all of the company’s products were produced in its 130,000-sq.-ft. plant in Meriden…in Connecticut…in the United States. Moreover, that Made-in-the-USA heritage dated back to 1879, the year founder William Thompson started producing chocolates with no “artificial ingredients.”
Those two intrinsic elements immediately set Thompson Chocolate apart from other competitors. Once Dunkin finished rebranding the line in 2011, which included a variety of packaging upgrades, he took the Thompson story to several larger retailers.
“I received an interesting reaction from them,” Dunkin says. “They found our product line very appealing, but told me that their stores weren’t ready for it. But they told me to keep doing it since that’s where the future is.”
And guess what, they were right.
As Dunkin says, “We’ve found our sweet spot. Sure, we have some distribution in major chains, but we really do well in premium grocery outlets and in the natural space, as well as boutique stores.
“The idea of better-for-you novelty chocolates seems to resonate with consumers,” he continues. America’s mothers are now more concerned about the quality of food that they give to their children and that concern even extends to seasonal novelty chocolates.
“The market is moving toward clean products, clean labels,” Dunkin says. “Consumers don’t want artificial ingredients. They are interested in organic items, in Rain Forest certification. And they’re willing to pay a little more for that.”
So it seems that the marketplace has moved to Thompson Chocolate’s point of view.
The results have been impressive. Following the rebranding effort, which included switching to more premium foils as well as making smaller and larger moulded items more merchandisable, the company has realized double-digit sales gains for all three segments of the business.
“In addition to producing branded novelty items, we also do contract and private-label products for customers,” Dunkin says. “And we also produce Adora, our chocolate calcium product. We’ve seen double-digit growth in all three segments. Now mind you, it doesn’t always occur at the same time for all three, so it’s been balanced growth.”
Naturally, the Easter and Christmas seasons have been key to the growth of novelty seasonal chocolates. At the same time, the company has experienced a nice uplift in the fall/harvest/Halloween/Thanksgiving time frame.
“We experienced growth in these products and have developed a nice base,” Dunkin says. “Of course, we’re not doing trick-or-treat items for Halloween. But we are doing small and large moulded items for parties.”
As Dunkin points out, the company offers retailers more “relevant, merchandisable items, all of which have driven growth.”
In addition, he says the company has established a real reputation for quality customer service.
“We ship on time, all the time, thanks to a small but very passionately committed service team,” Dunkin says. “We’ve gotten out of the over-promise business.” That coupled with ongoing upgrades to foils has expanded Thompson Chocolate’s customer base.
“We’re growing our sales with smaller and midsized retailers,” Dunkin explains.
Then there’s Adora, the company’s chocolate calcium supplement.
“It’s the only calcium supplement product on the market that uses real chocolate as a delivery system,” he says. “Unlike other products, which can be compared to chocolatey chews, we used real chocolate, which makes them twice as expensive.”
That doesn’t diminish the appeal, however. As Dunkin explains, Adora’s consumers tend to be more affluent, health-conscious consumers who are willing to pay for a better tasting product. And, surprise, surprise, “We do a nice business with teenagers.”
As the chief executive explains, there are plenty of teenagers who are lactose-intolerant, which means they are not getting enough calcium.
“And Adora is a wonderful way to supplement calcium,” Dunkin points out.
The product also has a big following in the medical community he adds. One of the big reasons for the appeal involves patient buy-in.
“Dosing calcium is a bit tricky,” he says. “It’s all about getting the proportions right. In the end, Adora tastes like very good chocolate, be it milk or dark. Texturally, you’re unable to discern that a calcium supplement has been added.”
Two years ago, the company upped its game with Adora, relaunching it as an organic and Rain Forest certified product. The move boosted sales.
Of course, that begs the question, are there Adora-like hybrids in the works? Dunkin says yes, admitting the company is working on “other likely vitamin supplements where chocolate is an appropriate delivery system.”
The company also plans to launch two new innovations next year in the chocolate moulded novelty arena, but the head of Thompson Chocolate wouldn’t elaborate further.
As Dunkin explains, “Everyone’s moving toward where we’ve been. But that’s OK. Collectively, we’ll expand that category. We have the benefit of being there first.”
At-a-Glance: Thompson Brands, LLC
Headquarters/Manufacturing: Meriden, Conn.
President and ceo: Gene Dunkin
Plant: 130,000 sq. ft.
Employees: 100, two shifts
Products:Moulded novelty chocolate items, chocolate calcium supplement
Brands: Thompson Chocolate, Adora