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Home / Business / Small Business

Dunedin chocolate company Ocho moves on Cadbury closure 'opportunity'

Aimee Shaw
By Aimee Shaw
Business Reporter·NZ Herald·
20 Nov, 2019 04:45 AM5 mins to read

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Dale Clements, who was appointed general manager of Ocho last month. Photo / Supplied

Dale Clements, who was appointed general manager of Ocho last month. Photo / Supplied

Chocolatier Ocho was virtually unknown in New Zealand - that was until Cadbury announced it would shut its Dunedin factory after 88 years in business.

On the back of the outrage that followed, Ocho announced a crowdfunding campaign.

The small company, that was founded in 2013 by Dunedin local Liz Rowe, raised $2 million on Pledge Me - the limit for the site - in 30 hours.

A year after Mondelez closed its Dunedin Cadbury factory to move production to Australia, Ocho opened its approximately 2000sq m factory in March.

The factory was an instant hit, and it began offering tours to "demystify" craft chocolate in an attempt to fill the void for the estimated 122,000 annual visitors who flocked to the Cadbury factory.

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READ MORE:
• Dunedin chocolate company OCHO pitches to Supersize SME panel
• Dunedin chocolate factory wants to 'demystify' craft chocolate
• Plans for new Otago chocolate factory shape up
• Otago Chocolate Company expects new factory to be running by July

Chocolate has been manufactured in Dunedin for 150 years.

Ocho general manager Dale Clements, who started in the role last month, and is ex-Cadbury himself, has been tasked with ensuring the 10-people-strong business turns a profit. It forecasts it will move into profitability next year.

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While Ocho wants to fill the physical void of Cadbury, it has no interest in becoming a mass-produced global player. It has left that to Whittaker's, British-born Clements says.

"The way we are going to grow the business is by almost educating the consumer on how chocolate can be made," Clements says.

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Ocho has 3500 shareholders, though remains majority owned by Rowe, and is gearing up to expand into retail outlets nationwide. Auckland is next on the cards. After that, it wants to export, including to Japan.

"Had Cadbury carried on, Ocho would have remained a small artisan business, which would have ticked along nicely, but the announcement of Cadbury closing did seem like an opportunity to keep New Zealand's chocolate-making heritage in Dunedin," Clements says.

"Ocho, with the funding, was able to move from Vogel St into Robert St, a bigger site with bigger equipment; moving from, really, a commercial kitchen-based business to a small handcraft business with greater capacity."

Ocho now produces "a couple of hundred tons" of chocolate each year, and Clements says there is enormous growth potential at the premium end of the market, both within New Zealand and overseas.

The company will next year look to raise additional capital of $2m to $5m to expand its visitor centre and start exports, he says.

"Cadbury used to have 122,00 people through its [factory]. All of a sudden as a tourist attraction that's gone. There's no reason why we can't get 122,000 people - that's the aim. It may take us several years to get there, but we'll be kitting it out to make it attractive."

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Ocho anticipates its annual turnover will be between $10-20m in the next five to 10 years. Photo / Supplied
Ocho anticipates its annual turnover will be between $10-20m in the next five to 10 years. Photo / Supplied

Ocho holds two tours each day, six days a week. Over summer, during cruise ship season, it will extend this to seven days a week. More than 100 people currently do the tour each week.

The company is also looking to introduce chocolate-making classes.

"Cadbury was more like a Willy Wonka experience, very child-orientated, like a playground. Ours is going to be serious chocolate," Clements says.

"I'd like it to be a totally immersive experience."

The bean-to-bar chocolate maker specialises in darker varieties and sources its cocoa beans from Papa New Guinea, Fiji and the Solomon Islands.

Clements says Asia could be its first export market, along with the West Coast of America. It anticipates it will be exporting within two years.

"Some of our chocolate is so pure and unusual tasting, especially at the 100 per cent cocoa end, it is suited to Japan and China and other South East Asian countries.

"The obvious market is Australia, but why not be bold and try somewhere like Japan."

Ocho wants to increase the capacity of its chocolate factory tours. Photo / Supplied
Ocho wants to increase the capacity of its chocolate factory tours. Photo / Supplied

Clements worked for Cadbury in Bournville, Birmingham, for six years as a brand manager for the Crunchie, Curly Wurly and Turkish Delight brands.

Ocho anticpates it will have annual turnover of between $10m to $20m in the next five to 10 years. It currently produces about a ton of chocolate each month.

Cadbury's withdrawal from Dunedin last year hit its bottom line; revenue slumped more than $80m and before-tax profit more than halved to $31.1m. The closure of its Dunedin factory resulted in the loss of 350 jobs.

In a statement, Cadbury said it "continued to make a significant contribution" to New Zealand through its partnerships, and was growing its team in the country.

Mondelēz New Zealand managing director Cara Liebrock said Cadbury recently relocated its call centre from Australia to New Zealand.

She said Mondelez had invested $2m in the redevelopment of Cadbury World before the attraction and factory site was acquired by the Government for the Dunedin Hospital rebuild.

"While we unfortunately couldn't complete this work and launch an amazing new attraction, it's great to see Ocho offering people a chocolate experience not too far from where generations of locals made our much-loved Cadbury products," Liebrock said.

Cadbury donated memorabilia from its Dunedin site to Bill Richardson's Transport World in Invercargill for the launch of its chocolate room attraction, she said.

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