I learned that soon after creating Pete’s Wicked Ale in 1986. Now, I’m focused on chocolate via Cocoa Pete’s Chocolate Adventure. With our new chocolate company, we want to do basically the same thing we did with Pete’s Wicked Ale—create a nationally distributed brand, educate Americans about an indulgent category to help drive category growth and have some fun in the process. If we play our cards right, we may be able to create a company with projected revenues of US$ 50 million in five to seven years.

Luckily, most of the business and marketing education I learned at Pete’s Wicked Ale still applies.

Lesson #1: Most companies that target a generic, homogenous, mass-market focus on volume or units shipped.
Many of these companies employ advertising as the communications vehicle of choice. Now, that’s fine if all your company wants to do is sell X number of units in Y time. But that strategy doesn’t build brand loyalty among target audiences, particularly for premium products.

In the US, chocolate is a US$ 14 billion a year market. The premium segment is about 10 percent of that, or about $1.5 billion. The growth rate of the overall market is low, about two percent. But the premium chocolate segment has been growing 17, 18 and 19 percent respectively over the last three years. At Cocoa Pete’s, we think the premium segment can grow to $3 billion by 2008, if the current growth rates continue. So, we think we’ve got a good chance of changing the chocolate game by focusing on what builds a brand and brand loyalty from the onset.

Lesson #2: Focus on building notoriety into your product for brand recognition.
What we elected to do at Pete’s Wicked Ale and are doing at Cocoa Pete’s is build notoriety into the product, not just into the advertising. That means that we have to create a recognizable icon for the brand, something or someone who has credibility and will make the brand stand out on retail shelves. That brand cornerstone is me, Pete Slosberg.

Lesson #3: Simple is often most effective in consumer products.
The consumption of chocolate in Europe is twice that of the US, where Americans average about one pound per capita consumption per month. Europeans consider chocolate a food group consumed as part of daily life.

Local chocolatiers in small Belgian towns seem to take particular pride in the freshness of their product. When I asked one chocolatier to tell me what “freshness” meant, I was presented with a molded piece of chocolate with a whipped crème center. It startled me with its simplicity. You don’t have to get wild and crazy with spices or fillings; you just put some basic wonderful ingredients together and you can create “magic.”

Lesson # 4: Don’t push your specific product, push the segment or category.
Create credibility for the genre. At Pete’s Wicked Ale, I learned that the best way to raise awareness and ultimately adoption of our product was to raise awareness and credibility for the entire category. We’re applying that same thinking and approach at Cocoa Pete’s. We’ve got to educate the target audience to start thinking about chocolate differently— demanding better tasting and higher quality American chocolate.

Lesson # 5: Use commonly available tools and seek out more information first hand.
What’s the first thing a person does when he wants to find out something he knows little or nothing about? He gets on the Internet and searches the Web, figuring there must be a website somewhere. Well, I got on the ‘net and started finding out who was making chocolate and who I could talk to. One thing led to another, and I ended up going back to Belgium to learn from a number of great Belgian chocolatiers. I also studied and took training classes with the CIA [Culinary Institute of America] in chocolate. I even visited cacao plantations.

Learning lessons from those who have preceded allows one to build off existing knowledge.

Lesson #6: Experience is the best teacher, but a fool learns by no other.
We want to use Pete’s Wicked Ale as an example and apply a number of the same marketing concepts to Cocoa Pete’s Chocolate Adventures. Therefore our qualities will be similar to Pete’s Wicked Ale: fun, whimsical, very high quality and taste for the general population. We want to be approachable and not take ourselves too seriously. Arrogant and finicky or pretentious behavior is not a prerequisite for enjoying good chocolate. General availability is.

Lesson # 7: Don’t overlook the importance of innovation as a branding tool.
A good example of this is Cocoa Pete’s 3-D, spherical bar. The reason most chocolate bars are one-dimensional and generally flat is for manufacturing purposes—flat bars are easier to make. Making a 3-D bar increases the level of difficulty for everyone throughout the supply and distribution chain: mold maker, manufacturer, shipper distributor, and retailer. But it sure gets noticed and connotes a sense of quality.

Lesson # 9: You can enter an already crowded market—if you find a specific niche and compelling point of difference.
When starting Cocoa Pete’s Chocolate Adventures, I figured maybe there was an opportunity for us to show the world that Americans can make great chocolate, too. In fact, we think there is a big opportunity.

The overall markets for food and beverage categories are flat or growing in the low single digits, but the premium segments are growing substantially, some in the double digits. For instance, in the US, the premium category represents 40 percent of the total ice cream market; premium beer represents 19 percent, which is up from 10 percent when we started Pete’s Wicked Ale. (And this is at a time when recent reports state that the overall beer market actually shrank.)

Lesson # 10: Don’t take yourself too seriously—that should be reserved only for your product.