Life after Dragon’s Den. Coffee & Cocoa with James Cadbury

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Our roving reporter, Tanya Beckett follows young entrepreneur James Cadbury as he follows in his great, great, great grandfather’s footsteps.

James Cadbury’s great-great-great-grandfather, John Cadbury, established a confectionery manufacturing business in the early 1830s that made the family name synonymous with chocolate.

Some century and a half later, James himself grew up in Edgbaston close to the Bournville village where the Cadbury empire was based. As for many children, the factory was a source of wonder for him.

“I used to go there all the time for kids parties, or we had a school trip there as well. And was always fascinated about mainly eating chocolate at the time, but also about how the company got set up and the ethics behind it really. So from a sort of very young age, I was very much fascinated about creating a business and how that worked 200 years ago when the Cadbury’s had their first grocery shop.”

James says he has always had a broad interest in commerce and trade and started in a small way when he was a student.

“I used to sell stuff on eBay and made a fairly decent amount of money doing that. It just sort of took me through university and gave me some beer tokens to go and drink with.” 

Entrepreneurism is most certainly in the genes in the Cadbury family, but James says, in fact, his ancestors had no choice but to establish businesses because as Quakers, they were social outcasts.

“Quakers at the time were seen as weird thinkers. They couldn’t get jobs in the police, for example, or the army or any traditional jobs, so a lot of them had to set up businesses.”

By contrast, James had a few avenues open to him. He started in banking but says he lacked the passion for it. The impetus to get a business started came on his mother’s birthday.

“I used to always get her flowers, and at the time it was the normal thing to do to get flowers left by the letterbox. I wanted to do something different and saw that there’s no-one doing chocolate through the letterbox. And that was my first idea – to basically create chocolate bars in nice packaging which would fit through the letterbox and come with a handwritten note.” 

Once the idea had crystallised in James’s mind, things moved quickly.

“I quit my job, and it took another six months to get everything set up and ready to launch the business. So we’re coming up for four years since we launched.”

James said his parents, neither of whom have been involved in the family business, were sceptical at first as to whether James could make it work.

“My Father was a lawyer, my Mum’s a lawyer as well actually. And they are very risk-averse. And they told me not to do it and said I already had a good job and was well paid. But then they saw that I was unhappy in what I was doing, so eventually were supportive, but it took a bit of time.”

One of the first things any company selling physical goods needs to do is find a suitable manufacturer. James had an exacting list of requirements.

“It was very important to make a difference in the UK and for the product to be handmade. And so we started looking at lots of different ones and finally found someone in Northampton.”

James wanted control over every aspect of his chocolate, from the beans to the packaging, so he was drawn to this particular manufacturer because they were willing to work with him. 

“Often the way manufacturers work is they just want to supply you finished products, and you don’t really know what’s going into the ingredients and where the chocolate is coming from. But this one said we could supply everything from the packaging to the raw ingredients and they would just charge us to make the chocolate bar. I was excited with the transparency. I could select the products and suppliers I wanted to work with.”

The next step was to find where to buy the raw ingredients.

“It took me a bit of time to find them. The normal supply chain is buying beans from West Africa. So the Ivory Coast, Cameroon and Ghana, for example. They’re the three biggest in the world with about 70 to 80% of the world’s cocoa. Then it is shipped to the likes of Belgium or Switzerland and it gets processed there, so a lot of the value in the supply chain is taken away from Africa.”

But James decided he wanted to go down a different route. One in which the community that grew the cocoa beans could derive more of the economic benefit.

“So we use this small supplier based in Colombia. And they actually make the chocolate in Colombia. So they pick the beans, they dry them and then put them through a fermentation process – which is where the flavour comes from. And then from there, it goes to Bogota, where they’ve got a big factory and it’s semi-processed into something like Cadbury’s buttons. Then we would import that to the UK, melt it, add flavour, add a few ingredients and form it into a chocolate bar.”

This way, says James, there is a lot of wealth creation in Colombia derived from his business. 

“This company we work with, they support local schools and communities in areas which have been affected by the coca leaf, where there’s traditionally been a lot of crime. So we’re sort of really, really happy to be supporting suppliers like that.”

Having been fortunate enough to taste James’s products, I can confirm that the love and thought that goes into them comes through in the flavour and look of the product. Even the packaging is modern, fresh and very striking.

“We’re aiming at the premium end of the market where you know, you’re buying as a gift or a nice treat. So packaging is really important to sell the products and make it very appealing to customers. So we’ve got lots of good feedback on that as well.”

James says the thought that goes into the chocolate is replicated in the packaging and he has been adamant that the wrappers must have sustainable credentials.

“Rather than the inner fillable foil being a plastic, we recently changed it to wood pulp. So it looks exactly like plastic. We had to print on the back to tell people that you could compost it. And lots of people are very happy that we’ve made that, especially being at the premium end of the market. I think people are still expecting those sustainable credentials. And it did take a bit time to find it, and it is double the cost of a plastic film, but I think it’s worth it. I think after Coronavirus there’ll be again a big focus on sustainability.”

I wondered how the modern ethos in terms of ideas for the product translated into James’s management style.

“Everybody in the team has a voice, which I respect and listen to. I give lots of responsibility to everybody, and we expect them to use their own brain. When we started, we got a few people who came into the team who were wrong. The culture wasn’t quite there; I was doing pretty much everything. Whereas now I have a team of five people and everybody thinks for themselves, and that makes my job a lot easier. And that’s why we’ve had a couple of record years. So that’s my real philosophy.”

The other question I discussed with James is the demand for high-end chocolate products. There is certainly no lack of competition with Hotel Chocolat and such like gracing the high street. Are people now more aware of the dangers of consuming too much sugar and reluctant to indulge in chocolate?

“I think people are eating fewer bad things and if they want to have a sugary treat, then they want to go for something which is a bit better quality, with a lot of meaning behind it.” 

I asked James what impact he thought the economic after-effects of a pandemic might have on his business. He is optimistic.

“Chocolate is very good for recessions, because previously people might have bought their partner a nice watch or whatever it might be, which is more expensive. But rather than that, they give a box of chocolates, which still looks nice and makes them happy. A lot of premium chocolate companies last recession actually did super well.”

The demand for affordable luxury, even during lockdown has been surprisingly strong.

“Before lockdown, 20% of our business was online. So we lost 80% of our business straight away in terms of revenues. But in May we sold a lot on websites, with our own website sales increasing 10 times compared to last year. And we’re also selling to other e-commerce businesses who seem to be doing very well. It was a record month for us.”

It’s obvious talking to James that he draws heavily on his banking background and can move numbers around in his head very quickly. Perhaps that’s why he decided to turn down the investors from Dragon’s Den so resolutely when they offered to buy a share of his company last year.

James felt the deal offered did not justify the true valuation of the business, as he had raised money a year before at a much higher valuation.

“I think my strong points are sort of the vision for the company. I can do the maths and have a good understanding of profit margins, and where we’re spending our cash and what sort of investment return we’re getting for each different part of business we do. I think that really, really helps and I have a real eye for that. I think a lot of chocolate businesses are probably set up by chocolatiers, who are super passionate about the chocolate, whereas I’ve come in from more of a business perspective. I’ve had that passion since when I was young, but I’ve never trained to make chocolate. Though there are claims that I am the best chocolate maker in the world!”

The final and of course most important question is what the future holds for Love Cocoa. Where does James see the business in the next five years? James set up the business online – chocolates that could be posted through the letterbox. But since then he has gained retailers in the UK including Liberty, Harrods and Fenwick and also sells to Japan and Germany.

“Longer-term we really want to be more like Hotel Chocolat. We see there’s an opportunity to compete with them in the future. So our goal is to really to increase our online presence, which at the moment equates to about 30% of our business. We really want to increase that further and offer a lot more products.” 

Ultimately, this means James wants to decrease his dependence on other retailers and have more presence online and also his own shops on the high street. The role of the high street is in flux at the moment, especially in view of the pandemic, but the central premise of Love Cocoa was always that it was a gift that could fit through the letterbox. James very clearly has the measure of what chocolate lovers are looking for.

ABOUT THE AUTHOR

Tanya Beckett

Tanya Beckett

BBC journalist Tanya Beckett is a banker turned broadcaster who shares our passion for entrepreneurs. When not presenting the business news, Tanya is our roving reporter getting us the backstories behind many of the UK's fantastic Founders and CEOs.