Wednesday, July 29, 2009

The business of cooking: How Eutopian Chocolates made a market for marshmallows

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[This article is part of a series. If you like it, click here for the story of Salsa Senorita.]

Like many food businesses, Eutopian Chocolates was more or less founded by accident. After years of working 50-plus-hour weeks and traveling often for her job, Sherry Smith-Noble was tired. She scaled back to part-time and started down her to-do wish list, which included learning to make marshmallows. Friends loved them, asked if they could buy them, and a business was born.

So how did Sherry's gourmet marshmallows end up in stores? Here's an inside look at the growth of her business.

Why marshmallows? The candy market is saturated. Even in Grand Rapids, where Sherry lives and runs her business, there are many local candy businesses. That's why she chose to focus on a niche product. She started with a recipe she found online, then experimented with flavors: strawberry, orange, mint, lavender, chai, coffee (one of her best sellers). At this point she's sticking with a small set of flavors as she learns to balance her inventory.

Going commercial: When it came time to find a commercial kitchen, there were lots of choices. Restaurants that go belly-up often rent out their kitchens after closing their doors, but those are expensive, and Sherry didn't need that much space. She ended up in her commercial kitchen through a friend of a friend. It's small, but there's room to grow.The best part of her work kitchen: industrial baking racks, storage, and the chocolate tempering machine (I want one of those too!).

Unpleasant surprises: Eutopian's December 2008 sales were through the roof. Sherry thought she had it made. And then came January - nothing. She hadn't anticipated the holiday bump. That's when she started looking for retail outlets who would carry her products year-round. She looks for upscale shops, and based on their feedback she's changed her packaging, portion sizes, etc.

Marketing: Lots of word of mouth, particularly from locals who find her products in their regular shops. All the shops in which she sells came via referral. She also does wedding favors, which bring in large chunks of cash and help spread the word about her products. Her company name had marketing implications, too - she purposely left "marshmallow" out of the name, in case she decides to branch out later. But her secret sauce (no pun intended) is her husband, who works as a marketing director and has helped tremendously with that aspect of building a business. And he works for free. (Or for marshmallows.)

The future: New flavors, new retail outlets, building her online sales. But Sherry is taking it slow. The business is self-funded, so she's careful about hiring (she uses temps during crush periods) and investing in expensive equipment. She's hoping word of mouth will help her grow organically.

For more information about Eutopian Chocolates or to order online, visit www.eutopianchocolates.com.

4 comments:

Anonymous said...

What a great success story of a small business innovating to beat the tough economy. Plus the chocolates are REALLY good! My favorite is dark chocolate with cardamom:-)

Dawn Longcore said...

I've tried the chocolates, they are amazing! My favorite is coffee marshallow with dark chocolate.

Mary Jane said...

Sherry is amazing and so are the chocolates. My favorites are the ones she makes especially for the out-of-doors treat, "S'mores."

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