Upmarket and ethical retailer Hotel Chocolat is defying a volatile cocoa market by offering its growers a premium far above current spot market prices. Sue Scott reports

The cocoa growers of St Lucia will do well this year.

The City has developed a taste for chocolate. Hedge fund trader Anthony "Choc Fingers" Ward and his speculator friends drove cocoa prices to a 33-year high of £2,732/tonne last month. But St Lucian suppliers will see an even tidier increase in the premium they're paid by one of the world's most exclusive chocolatiers. They could fetch as much as £3,600 per tonne of beans an eyewatering sum on a Caribbean island where the average wage is just £100/month.

The buyer is Hotel Chocolat the trendy online and high-street retailer whose ethics are as pure as its up to 80%-cocoa couverture.

The hefty price conscience-led chocoholics pay for Hotel Chocolat's super-premium Purist Range is partially founded on a price pledge made to its 80 independent cocoa growers on the island when chief executive Angus Thirlwell set out five years ago in partnership with finance director Peter Harris. It promised to pay 30%-40% above the market price and, despite the current spike, Hotel Chocolat is sticking to its word.

"If you look at the percentage of your costs associated with cocoa in terms of being a retailer and a manufacturer, it's at a manageable level even now," says Thirlwell. "But excessive interest in speculation in cocoa is completely unhelpful. The people it hurts are not the people like Hotel Chocolat, it's the cocoa growers. Having a volatile market in a raw material like that does not provide a good basis for long-term investment and prosperity. What goes up with a sharp spike always comes down and leads to heartache and misery."

Hotel Chocolat is looking to take some of the misery out of the market by upping production at its Cambridge plant and building a "bean-to-bar" factory on its own cocoa estate in St Lucia. It was here that the brand laid down its own rules of ethical engagement with suppliers after Thirlwell opted out of Fairtrade, having decided the movement's "one-size-fits-all" model didn't best suit the cocoa market.

Capital for investment in the new factories, as well as for extending the number of branded high-street outlets currently 40 in the UK and four worldwide was raised through the issue of the first-ever chocolate bond earlier this year. It yielded £3.75m £2.25m better than Thirlwell's worst fears and £1.25m less than his wildest expectations. But it's enough to fund expansion without going to the bank.

Ubiquity is not the aim, however. "We're more interested in quality than quantity," says Thirlwell. "We do not aim to have a massive empire. We are interested in being places where our consumers want us to be. The ceiling in the UK isn't too much above 40 stores. Most of the expansion is going to be concentrated abroad. We've had inquiries from just about every country you can think of."

Hotel Chocolat is many things grower, manufacturer, online seller, retailer with branches in the States and the Middle East, and even Borough Market stall trader since the opening of the Rabot Estate pitch three months ago. With an eponymous hotel opening in December on St Lucia, is there any diversification they won't attempt? "It's not diversification," says Thirlwell. "It's chocolate-led and that takes us into different areas. We're having great fun."