Chocolate fix: resurrecting Koko Black

Luxury chocolate chain Koko Black was in bad shape when Simon Crowe bought the business out of administration three years ago.

"It was more broken than we thought, there had been no investment in equipment," Crowe says. "There was a lot of passion but not capability at a senior level."

Koko Black owner Simon Crowe has been on a mission to turn around the luxury chocolate chain.Credit: Simon Schluter

Crowe, co-founder of the Grill'd burger chain, has been on a mission to turn around Koko Black, which he says "could be an iconic Australian brand".

Last week, Crowe opened Koko Black's "first new store in years" in Melbourne's city centre, bringing the chain to 13 stores, with a further four slated to open this year across Australia.

The business employs 300 staff and turned over more than $24 million last year, up from $18 million the previous year.

'Sleeper brand'

"Koko Black has been a sleeper brand," Crowe says. "Those who know it, love it, but not many people are aware of it."

He says turning the business around has been tough, with "a lot of blood, sweat and tears".

"Even when we bought it, you think 'Wowee, is this worth doing?' To build a house, to build one day a castle, there is a lot of remedial work that needed to be done."

Crowe has invested more than $6 million in Koko Black's manufacturing facilities and says keeping chocolate making in-house will enable the business to differentiate itself from its competitors.

Koko Black has opened its first new store in years. Credit: Craig Sillitoe

"Everything is all natural and hand-crafted and made in Melbourne," he says. "We have not outsourced manufacturing because we believe in the artisan way. That creates challenges but it is part of the success that will be Koko Black - in a day where everything is mechanised, imperfections are part of perfection."

Koko Black's products have a maximum shelf life of 16 weeks and Crowe says this is in marked contrast to larger international chocolate brands.

"The international players can only be here by putting a truck-load of artificial preservatives and flavours to get a shelf life of a year," he says.

Crowe has revamped Koko Black's packaging and undertaken collaborations, including with top chef Dan Hunter of Brae, with a focus on native ingredients.

Limited-edition chocloates Koko Black x Dan Hunter.

"We are dialling up the spirit of Australia in how we produce our chocolates but not in an old-fashioned or, dare I say it, boganistic way," Crowe says.

Focus on Asia

By celebrating Australian ingredients and Koko Black's heritage, Crowe hopes to make headway in the Asian market.

"We find through our city stores [that] while we are appealing to a local clientele, we over-index with international guests, primarily Asian," Crowe says. "Pleasingly, [Chinese online platforms] Tmall and JD.com both want to do work with us."

Simon Crowe says Easter Thursday is Koko Black's busiest day of trade for the year. Credit: Simon Schluter

Crowe says Australian food products are in demand in Asia as they are seen as safe, fresh and clean.

"We are going to walk a path less travelled and so air freight [products] over," he says.  "We would love to be a contemporary Australian chocolate artisan."

Koko Black's products are aimed at the premium end of the chocolate and confectionery manufacturing market, which Ibisworld values at $5.7 billion for 2017-18. The research firm says consumer demand for premium chocolates and confectionery is projected to support industry growth.

Ibisworld analyst James Thomson says Koko Black's turnaround has been going "reasonably well".

"Koko Black has been trying to differentiate itself through premium products with a collaboration with Dan Hunter from Brae and initiatives like that to stand out from competitors," he says. "It's got a focus on the high-quality premium customer experience in store."

Easter rush

For now, Crowe is focused on making the most of the busy Easter period.

"Easter is our moment because we have complete relevance at Easter," he says. "Easter Thursday is our busiest day of the year."

Crowe says the weather can impact on chocolate sales and they suffer if it is too hot over Easter, or Koko Black's other busy period, Christmas.

"If I could change one thing, I would move Christmas and Easter to winter," he jokes. "Easter and Christmas are fundamental to the business but we want to make them less significant to build up daily usage."

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