Ethical chocolatier Tony’s Chocolonely is slashing its prices.
In a bid to broaden the appeal of its bars and take its messaging about slavery in the supply chain to a wider audience, the brand is cutting 50p from the rsp of its bestselling 180g bars.
The brand’s UK boss Ben Greensmith told The Grocer the move represented an “investment” into consumers that would “close the gap” between Tony’s and the biggest confectionery brands – despite facing the same cost pressures as those other suppliers.
He said the business wanted to “use this as a chance to get more bars into people’s hands and drive awareness, and show people there is an alternative, delicious-tasting chocolate that doesn’t involve exploitation”.
It came at a time when “we should be putting through a 10% or 11% [cost] increase”, he said. To manage the impact, Tony’s was “going to cut our P&L slightly differently, reducing operating expenditure and a little less on marketing”.
The price paid to the brand’s farmers will not change.
Retail prices were ultimately set by the retailers themselves, he stressed, but he said he hoped the move would mean shelf prices fell from around £3.50 to £2.99 for the 180g bars, which Greensmith said represented 80%-90% of the brand’s business in the UK. The price of the brand’s smaller bars will not change.
“We have said to the trade ‘help us do this’ – it is taking a big chunk of gross margin out of our business. But customers and some retail partners are saying yeah, it is the right thing to do. It has a hit on the percentage but the way I’m looking at it, it’s just going to help us grow faster.”
Indeed, the brand said the move had been supported with more distribution in some major retail accounts, helping “to offset some of the gross margin reduction in Tony’s P&L in absolute terms”.
Greensmith said the reduction would lower the price differential between Tony’s and similar-sized competitor bars from about 155% to 66%.
“I firmly believe, giving [shoppers] the opportunity to buy a bar at a premium for a much better product with no palm oil, no plastic and higher cocoa content – plus we’re paying a bloody fair price for our cocoa – we can bring a lot more people in. And ultimately the more chocolate we sell, the more cocoa is going to be fairly traded.”
He added the move could also challenge the idea that consumers should bear the brunt of inflation in the supply chain.
“Profit is a means to achieving a goal. There is more than enough value and money in the value chain of chocolate, it’s just going to the wrong place,” he said. “If you look at the operating margins and profit the big chocolate companies are making, these are some of the richest companies in the world.
“It is a choice. If we can continue to do what we’re doing and show it is possible, it does send a message and put other companies under pressure.”
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