Note: Minimum word count for each numbered question is 200 to 250 words.
What is a market niche, and how does it apply to Taza's business model? What types of companies compete with Taza? What role has technology played in Taza's success?
Describe the entrepreneurial profile. In what ways does Larry Slotnick display these entrepreneurial attitudes and characteristics? Be sure to include examples from the video in your response.
Taza Chocolate is an up-and-coming bean-to-bar chocolate manufacturer located in Somerville, Massachusetts. Founder Alex Whitmore got the idea for the company when he made a trip to Oaxaca to experience the history and traditions of Mexico. In particular, Whitmore was fascinated by xocoltl, the ancient Mesoamerican practice of using the cacao plant for drinks. The traveler was so enchanted with Mexico’s chocolate history that he decided to launch a Mexican-style chocolate company back in the United States.
As a tribute to the Mexican chocolate making tradition, Taza uses an artisanal stone-ground manufacturing method. Chocolate making involves roasting, winnowing, and grinding coco beans, and Taza’s unique stone-ground method produces chocolate with a distinctive texture. After Taza grinds and processes its coco beans, the raw chocolate is mixed in a variety of forms and shipped out to customers. “We manufacture chocolate bars, Mexican-styled chocolate discs, and chocolate covered nuts,” Whitmore says. Although Taza was founded only recently in 2006, the company’s chocolate appears in nearly one thousand specialty and natural-foods stores in more than 40 states.
Taza began with a good idea, but it was the founders’ tireless determination that successfully peddled the first Taza bars into stores. Larry Slotnick, the company’s cofounder and director of sales, helped launch the startup by selling bars to mom-and-pop shops around Boston and San Francisco. “I spent the early years just walking around to local stores with samples of ourproduct,” Slotnick recalls of his first attempts to market the Taza brand. “After Boston was getting going with 40 or 50 retailers, I started doing some traveling to San Francisco. I’d do some research and have a list of the stores I wanted to visit, and I’d usually borrow a friend’s bike so I could get around from store to store and neighborhood to neighborhood.”
In the United States, iconic chocolate producers like Hershey and Mars dominate the market, leaving little room for new competitors. However, the founders of Taza believe that all-organic Mexican-style chocolate is unique enough to become a breakout success. Unlike Hershey’s creamy, smooth, chocolate bars produced in the familiar European style, Taza’s Mexico-style chocolate is bold and coarse in texture—a difference instantly recognizable to the palate. In addition, Taza’s all-natural ingredients are harvested through sustainable business practices. As a result, Taza discs taste great while being extra good for farmers and the environment—a plus for eco-minded consumers.
Another distinction between Taza and the top brands is distribution. Taza sells products in a variety of specialty and natural-foods stores. And although consumers can’t get Taza discs at big box retailers or national grocers, they can buy them directly at TazaChocolate.com. According to marketers at Taza, the online store is an affordable way to sell to consumers and remain connected even after the purchase. To maintain contact with chocolate lovers, Taza sends engaging content over Facebook, Twitter, and e-blasts. “We try to provide actual information and news,” says Stephanie Larason, Taza’s manager of customer outreach.
As a manufacturer of premium confections, Taza must sell large quantities to stay in business—and that means selling in bulk to wholesalers and distributors. When selling to these customers, price is important. Taza charges 40 percent less to its bulk-buying distribution partners. “Say we sell a chocolate bar for $4.50 as the retail price,” Whitmore posits. “The wholesale price is going to be somewhere around $2.70 per unit, which is a big difference.” According to Slotnick, the discounted sale is worth it; not only do middlemen buy Taza chocolate in large quantities, but they also provide long-term refrigeration, storage, and affordable shipping. Such services add value to Taza’s business process. “Having distribution be a component of our overall sales and marketing is critical to the type of product we’re selling,” Slotnick states.
At the end of the day, Taza’s sustainability ethic and direct trade agreement with suppliers may provide the greatest contrast with the Hersheys of the world. Green marketing and direct trade are appealing brand features among today’s eco-minded youth, and small chocolate makers are paying attention to trends. Nevertheless, while green marketing helps Taza earn scores of new trials, Larason insists that it is the brand’s irresistible chocolaty goodness that ultimately keeps people coming back for more. “One of our great successes,” boasts the outreach guru, “is that we have managed to combine the healthful and sustainability angle with ‘this is just straight up delicious and you want to eat it because it’s the best chocolate out there.’”