An already successful entrepreneur hailing from Calgary Alberta, Churchill had just sold a thriving business he created and being a chocolate connoisseur, he wanted to celebrate and treat himself to a box of pure chocolates. All he could find, however, were giant brand-name North American chocolate companies like Laura Secord, and the box he ended up buying tasted nothing like the pure chocolate he was used to enjoying from Europe. Churchill was baffled and continued his search for a “real” North American chocolate company. His search turned into a research project that lasted more than two years and 3,000 hours. He discovered how real chocolate was made, along with the business opportunities around it. He decided the demand in the Canadian market was wide open for a high-quality craft chocolate company, providing an excellent foundation for him to start a craft chocolate company of his own.
Churchill started the company 12 years ago and named it Choklat. It is now Canada’s largest premier craft chocolate company. The factory is in Calgary and their pure chocolate is available in more than 150 stores across the country and online across the globe.
Now, Choklat is poised to become the largest licensed edible chocolate company in the world by early 2020, extending its pure chocolate brand to sell not only infused CBD chocolate bars, but separately infused THC bars as well.
I met up with Churchill and his associate partner, Meni Morim, CEO of Namaste International, in Calgary to find out and taste what the excitement was all about.
What prompted you to start a chocolate company when there are so many out there already?
Churchill: In the chocolate industry there’s essentially two businesses, companies that make chocolate from scratch with coco beans, butter, sugar, and vanilla. They roast the coco beans, remove the shells and grind all the ingredients down to make the chocolate itself. That’s exactly what making chocolate is.
Now a “chocolatier,” on the other hand, buys chocolate that’s already made, melts it down and turns it into bars, Easter bunnies, Easter eggs, etc. My business by comparison first and foremost, makes our own chocolate. We then turn it into the various confections that we sell, like our chocolate bars, truffles, etc.
What differentiates what we do is the specific fact that we don’t blend our coco beans to create a blended product. What we actually do is called a ‘single origin of varieties of beans.’ We make a single origin chocolate out of an individual bean strain and make a single origin chocolate flavor out of that. By doing so, we celebrate the unique flavor that each individual bean brings to that — just like grapes do in the wine industry, or coffee beans in the coffee industry... and it’s quite a startling difference.
You seem like a “chocolate crusader.” What was it like starting out?
Churchill: Back in 2008 when I started, I was the second guy in Canada to do this, and one of the first in North America. Back 10 years ago, the craft chocolate movement was in its infancy and I was already in business for a couple of years. I faced a very significant uphill battle. I wanted to advertise in newspapers and magazines and say, ‘Chocolate, period. Alberta’s ONLY chocolate maker.’ But because of what the public perception of chocolate was at the time, no media publication would allow me to pay for ads in their publications for that.
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What ended up happening, though, is I took to the internet. I used social media: Facebook, Instagram. I posted on a ton of different forums and helped incubate that craft chocolate industry until today almost every craft chocolate maker in the industry in the States, and most of them in Canada, use some part of a process that I researched and publicly disclosed online to make their craft chocolate.
It was a heck of a struggle over the next few years to get the community to accept a very significant change. So I guess you could call me, from a marketing perspective, a disruptor in that regard.
What happened, though, is because of my honesty, my integrity, the fact that I never said anybody else’s product was bad, I just said, “we do something different.” I maintained that from day one. It really built an incredible following of customers in this business, so much so that we’re selling chocolate bars now that are three times higher the price, than their highest price luxury chocolate bar. The thing is, though, that it’s not so much that we’re selling at that high price because we can — we’re selling at that price because the quality justifies it. And the customer likes supporting a business that is honest and has integrity.
Meni, what was the business reason for your company, Namaste, partnering with Choklat?
Morim: I’d like to talk about that. We believe that the cannabis industry is only going to grow. And even though our company’s roots came from the accessory devices, you can see from our progression that we’re really trying to be able to have a touch point with our cannabis consumers at every point in their journey. And part of it, we built our Uppy AI platform, that you and I discussed in our first Uppy interview for Maximum Yield.
With our medical cannabis license which allows us to sell medical cannabis, we saw the edibles legalization in Canada is approaching and we were looking for the right company to partner with. Our decision, which was led by our business development manager and Brad himself, was based on a very clear and strong synergy between the two companies.
We wanted to make sure we have access to literally the best product we can find for our customers. Our main lesson was from October of last year (2018) where everybody was scrambling to get product, to get flower. No one had access and you could just buy what you could, even though some of it wasn’t great. So we wanted to make sure our customers would have access to the best possible product, and the best product we could find on the edibles market was Brad’s Choklat.
And I think that decision has proven itself many times over because as far as we know, Choklat is the first company in Canada that has submitted its evidence package to Health Canada to obtain their edibles license. So not only is it the best product, but they have the ability to execute, move quickly, and be efficient. So from our side it was a high-quality product, a product that has an amazing following and has people who are willing to pay premium prices and something that we believe has a lot of value. From our side we saw that we could add value to Choklat by bringing to the table our experience and ability to e-commerce, meaning, we can make sure we can attract the right customers and that we convert them online.
We also, by creating a family of companies, can make sure that Choklat always has access to the raw materials they need. For example, from our CannMart lab which is an extraction facility, we can make sure that no matter what happens, Choklat has access to the raw materials that they need at a reasonable price and they never run out of anything so that production can continue. We can provide field channels through the medical side. We also have a relationship with the province through labs, etc., so it really did create a situation of one plus one equals three where Choklat helps us expand our product offering to our customers, and we benefit Choklat by bringing a channel where Choklat can reach those customers, and guarantee supply.
Before you start Brad, what is the actual size of your chocolate bars?
Churchill: Our base chocolate bars when they’re done will be 25 grams and then we’ll have five grams of inclusions in the bar such as peanuts or toasted coconut, sweetened coconut or hazel nuts or score bits or whatever. So the end weight of the chocolate bar will be 30 grams.
The reason that I chose that was for a number of very significant reasons. So first off, Health Canada has been very prohibitive with respect to packaging products in multiple doses. So you have one single dose, one single serving and that’s all you’re allowed to have in each individual package. Not like the States where you can do a whole package of chocolate squares or a chocolate bar that have 100 grams and you just bite off a couple of squares of it.
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So here’s the thing: I know for a fact that edibles are going to be fairly costly in the stores just because of packaging constraints, labeling, and a whole myriad of costs that go into it. At the end of the day, a consumer is going to open up one package and get a gummy bear! That’s it — like one tiny little jujube!
I know from experience that the average customer of mine eats approximately one ounce of chocolate which is 28.5 grams. They’ll sit down and break off a third of a bar and over the course of 20 minutes and very slowly consume 30 grams of chocolate with a glass of wine or their coffee, or whatever the case may be and that is their snack. And they limit themselves to that.
So I’m going to make a bar that, when the customer opens it up, goes through all this prohibitive packaging and goes through all the price points and what not, they’ll go, “ok, there’s a whole chocolate bar here!”
What stores are you planning to sell your edibles in?
Churchill: Every single one of them!
Will you be making an infused edibles chocolate product with CBD or THC or a combination of both?
Churchill: Usually you get into blending in a medicinal environment because you have CBD which works hand in hand with THC as a medicine. But in what we call the adult market or the recreational market we’re going to do a THC-only product and then we’re also going to do a CBD-only product. That will come right out of the gates from our facility. But we won’t do a blend.