Chocolate enterprise far from a fantasy

By PAULA OLIVER

Willy Wonka never had to worry about worldwide price increases for cocoa, or how the Employment Relations Bill might affect his chocolate factory.

But a modern-day version of the children's book hero is living proof that owning a chocolate factory is far from being just a fantasy.

Allen Peters, who opened Glen Innes-based chocolate manufacturer Nice and Natural in 1985, last week became this country's first recipient of the Alfred Stauder Award.

Presented by the Australasian Confectionery Manufacturers' Association, the annual award recognises the major contributor to the sugar-coated world of candy and chocolate.

Part of the reason Mr Peters received the award is that he increased business by 30 per cent last year, in the face of huge increases in the cost of his core raw material - cocoa.

"We did it through taking on new products, improving our distribution network, and improving our manufacturing facility," he said.

"The exchange rate has definitely helped with exports, but we are niche marketers who have to be innovative to compete with the big guys."

Mr Peters was 40 years old when he and his wife, Barbara, decided to sell their family home to start Nice and Natural.

Tired of working in middle management in the food industry, Mr Peters said the thought of failure never entered his head. "You do it on the basis it's going to be successful. If I ever thought something wouldn't be a success, it wouldn't get to first base."

Mr Peters did not invest in machinery in the beginning, preferring to do everything by hand to keep costs down. With the help of his contacts in the food industry, his business grew rapidly, and within two months he employed a further two people. He now employs 40.

As his business grew, Mr Peters moved into larger premises and developed new product lines. He was very careful in the early days about investing too much money in a new product, but has since learned to invest more in a winner.

"We tended to grab for business just to keep busy, and that sometimes meant we had no profit margin at all. But we don't do that any more - why be a busy fool who makes no money?"

Mr Peters said that over the years he had structured Nice and Natural's product range carefully, focusing on high-quality, short-run products and making sure that he could always be flexible.

Originally focusing on health bars, the company now emphasises chocolate products, exporting boxed chocolates to Japan.

Mr Peters said being able to meet special requests during the high seasons of Christmas and Easter was also an advantage.

"We need to do that to compete with the big guys like Cadbury and Nestle. We have to be different, and to be able to meet a request quickly and positively is part of that."

Staple products like rocky road and chocolate almonds still continue to be winners, but innovations are carefully launched each year.

An example is his giant toastie, a chocolate marshmallow bar that is twice the size of any other on the market. A giant chocolate fish has just been launched.

Seventy per cent of the chocolate market is based on impulse buys, so it is inevitable that packaging has become a large part of the business. Trying to sell a luxury product to a public increasingly aware of the need for good health requires careful thought.

Mr Peters said it was possible health additives could go into chocolate in the future to avoid that problem, if the demand was there. But he insisted chocolate was the most popular flavour in the world, and as a comfort food it would always enjoy high sales.

"When something goes wrong in the country, our sales fly," he said. "But obviously we can't just rely on that."

Nice and Natural's export products have been carefully considered, including boxed sets of New Zealand-oriented chocolates in airports and gift stores.

Some of the sheep-shaped chocolates are moulded by hand in the factory. But while many tourists buy them here, Mr Peters says an innovative move to sell via a catalogue in Japan is another example of being different.

"It means they can buy the boxed product before or after they visit New Zealand, and avoid having to cart it around during their holiday. We can see further markets opening up in the North-west Pacific and England, but we'll only move when we're ready."

Each time Mr Peters expanded the company to cope with larger demands, overheads and staff numbers also had to increase. A period of consolidation followed, where products were not altered until the costs could be covered.

Mr Peters said employing a good accountant was the best advice he could give a budding entrepreneur.

"Knowing when you can afford to improve your manufacturing facility is a big thing, and we could have been spending outside our means without the hard-nosed accountant we have. But our house and lifestyle were always on the line, and always will be."

While the struggling dollar makes exporting an attractive prospect, Mr Peters said many businesses still had problems with the set-up costs for exporting. Distribution networks, and travel costs to establish relationships, can run to huge amounts, and Mr Peters would like to see more Government support in this area for people with a good track record.

"Even if the costs could be partly recovered from the sales, it must work," he said. "And I would love to see more support for the local industry from supermarket chains."

Mr Peters has picked every member of his staff carefully, and he is proud that many of them were hired after being made redundant from another company, which meant they were experienced and dedicated.

The main challenge Mr Peters faces in the short term is a rapid increase in the price of cocoa. Diseased crops overseas have forced the price to a premium, and Mr Peters said some manufacturers' costs will increase by as much as 25 per cent.

He has long-term contracts in place, but knows the effect will hit in a year, when they come up for renewal.

Meantime, he is happy with the launch of his latest product, the New Zealand Olympic Bar. Based on the same concept as the hugely successful America's Cup Bar, Mr Peters says he hopes it will follow a similar pattern.

If it does, he will be a happy man.

And even though he knows he sells more chocolate when people are unhappy, this real-life Willy Wonka prefers to have a smile on his face.