Tuesday, January 25 2022

Luxury brand Hotel Chocolat, which helped lift pandemic gloom during the dark lockdown days, is seeking to prolong a surge in sales through its subscription service.

Lovers of the chocolate signed up in droves for regular deliveries to raise spirits and treat their loved ones. Subscribers pay £20-£30 each month and membership has risen by over 300 per cent over the past year. Gift sales meanwhile have more than tripled.

The UK group, which began as an online business nearly three decades ago, adopted a chocolate subscription model in 1997 to boost loyalty from its customers keen to receive regular deliveries of its products. The service has buoyed the business during the Covid-19 lockdowns.

“Chocolate is a happy product and, boy, do we need a bit of happiness,” says co-founder and chief executive Angus Thirlwell. “We saw so many lovely, heartwarming and tender messages being sent from one group of people to another. Our role in making those connections is a privilege.”

Subscription models have proliferated during the pandemic with peddlers of everything from toilet paper to petcare reaping the rewards. GlobalData estimates that the UK’s recipe box market grew 347 per cent between 2017 and 2020 to £578m. The Royal Mail’s subscription box market report said the UK market is estimated to be worth nearly £2bn in four years’ time.

For Hotel Chocolat, founded in 1993, a focus on online retail allowed the company to take advantage of a global pandemic-driven ecommerce boom as lockdowns took hold last year. Its shares have risen 17.8 per cent over the past 12 months.

The increased demand for its premium product has strengthened its financial muscle to enable the chocolatier to expand its physical presence and accelerate some of its growth plans. In Japan, it opened a store a month during the pandemic when rivals, such as Godiva, “went quiet”.

Our competitors “hid under a rock during the pandemic”, which meant that Hotel Chocolat could swoop in on preferential locations, says Thirlwell. The group now boasts 22 sites across Japan.

Hotel Chocolat’s products do not carry a fair trade designation, but the company says it has sought to mitigate the impact of Covid-19 among its cocoa suppliers in the Caribbean island of St Lucia. The company plans to launch a “gentle farming” charter this year to “ramp up” its engaged ethics programme.

“We’re clear about our purpose,” says Thirwell. “We’re not as essential as a vegetable, bread or milk but we are performing a purpose. We’re not just a frivolous thing that no one needs.”

This is an article in a series for the blog that explores the effects of the pandemic on people, communities and businesses around the world


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