A Sweeter Business Model
September 6, 2010 § 1 Comment
What I really like about Josef Zotter is that he not only created an environmentally friendly, socially conscious fair trade business, but that he also does not desire to advertise (advertising is huge mental pollutant in my opinion) nor does he wish to expand to become global company. Simple is better in his world. Too bad I would have to go to Austria to try his chocolate!
The Zotter factory in Bergyl, Austria, produces more than 200 varieties of organic chocolate.
By ALICE PFEIFFER
Published: September 2, 2010
BERGL, AUSTRIA — In 1996, Josef Zotter’s bakery business in Graz, Austria, was floundering. Facing bankruptcy, he decided to close shop and go back to his roots, a village named Bergl in the Feldbach district of Styria. There, with 2 of his 40 former employees, he set up a tiny chocolate factory in a converted cowshed on the farm where he had grown up.
His plan was to build a microbusiness, buying “fair trade” chocolate beans from smallholder producer cooperatives in Nicaragua and Brazil for the small-scale production of chocolate confectionery using local produce, for local consumption.
Turning out bars with flavors like apricot and sheep’s milk, he built a following among customers who liked the concept of Austrian specialty chocolate made in an environmentally conscious way.
Today, the factory has grown to cover more than 5,500 square meters, or 60,000 square feet, from its original 200 square meters. The company, Zotter Schokoladen Manufaktur, employs 112 people producing as many as 50,000 to 80,000 bars a day in a range of more than 200 classical and exotic flavors.
Among the odder ingredients: Fish; soy; green tea; açaí berry; and ketchup and peanut butter — a tongue-in-cheek celebration of American taste, for President Barack Obama’s election victory.
Sales have grown by word of mouth. “We don’t advertise whatsoever,” Mr. Zotter said in an interview last month.
The company organizes factory tours, however, that bring about 150,000 visitors a year to taste and smell and also to sit on cocoa bean bags in the on-site “Cocoa Cinema,” where they can watch presentations on the brand’s history and ecological principles.
Other attractions include a “Drink Chocolate Online” room where a small cable conveyor system, like a miniature ski-lift, trundles bars of chocolate around the room, waiting for visitors to pick them off and turn them into cocoa drinks at an adjoining hot chocolate bar.
A recent visitor found crowds of children drinking from cocoa fountains at the entrance to the factory while their parents cut chocolate chunks from brimming samplers.
But behind this playful, almost whimsical, presentation lies a strong commitment to sustainable production and equitable trading relations with the company’s suppliers.
The company’s chocolate beans have been certified as “fair trade” products since 2004, meaning that it buys directly from the producers, offering them a higher price by cutting out middlemen. Mr. Zotter said he traveled regularly to Nicaragua and Brazil to meet with the producers, for whom he has financed the purchase of machinery and the construction of storage space.
“I know how much they earn, and how much of their salary such equipment represents,” he said.
Residues from grinding the beans are fed into a biomass converter to produce heat, power and fertilizer. Between the biomass plant and solar panels, 60 percent of the energy required by the factory is produced on the site. “We aim to reach full energy autarchy in the next 10 years,” Mr. Zotter said.
Since 2006, the factory’s output has been certified organic. Mr. Zotter uses dairy products from organic farmers in the mountains of Tyrol and specialty organic products, like seeds, fruit and nuts, from local farms. “I want to use as many local specialties, and specialists, as possible. Steiermark needs the jobs,” Mr. Zotter said, using the German name for Styria.
Mr. Zotter has also established an organic canteen on the factory site for his employees “so they get used to quality,” he said. “Also, I want them to work not just for money, but in a place they feel good in.”
Other environmental gestures include using water from local springs only, which is then recycled for cleaning; and using environmentally friendly packaging, without glossy coatings.
“You can make changes by paying attention to the smallest details of everyday life,” he said.
Applying the same principles to his private life, he says he has driven an electric car for the past 15 years and powers his home with a domestic solar/ biomass generator that produces more energy than he needs.
“My home energy production is really efficient,” he said. “I actually produce too much, so I wind up reselling it.”
In an extension of his fair-trade principles, Mr. Zotter is also involved in several social projects, including one in Colombia that aims to wean coca growers onto cocoa as a substitute crop, and his product line includes fund-raising chocolates, like the Zuki bar, a flavorsome blend of açaí, mango and brazil nuts.
The company says it donates 30 percent of Zuki bar sales to an aid project for Calcutta street children.
Mr. Zotter says he is not interested in developing a global presence or selling through large distribution chains. Franchising has no place in his strategy, and faster growth is not an object.
“I’ve reached my ideal size,” he said. “Plus, I don’t think we need yet another global brand. The world needs a completely new approach to making the economy work. I find it so frustrating to see the same products in every corner of the globe.”
“The world is changing,” he added. “There is a return to simplicity. Greed is over.”
Source: The New York Times