Elliot Moss
The inimitable sound of Mr Albert King with Kansas City. Good morning this is Easter Weekend and it is Jazz Shapers with me, Elliot Moss here on Jazz FM. Thank you so much for joining me. It is the time for Jazz Shapers which is the place where you can hear the very best of the people shaping the world of jazz, blues and soul, alongside their equivalents in the world of business, a Business Shaper. And very fittingly thanks to the wonders of modern science and Dom, producer, we have Angus Thirlwell here who is the co-founder of the chocolate business, he is a chocolatier, the business called Hotel Chocolat. You will have seen it on line, a crackling somewhere beautifully with beautiful chocolate or you would have seen it on a High Street near you. You will be hearing lots from Angus and some good stuff to it will be. In addition to hearing from Angus, you will be hearing from our programme partners at Mishcon De Reya some words of advice for your business and then there is the music here in Easter Saturday and we are going to be hearing from James Taylor and his Quartet, Frank Sinatra and this from Stan Getz & Joao Gilberto.
Stan Getz & Joao Gilberto, and here comes my rather poor Portuguese, wish it was in Spanish, I am going to try this Sό danço samba, it’s very nice anyway. Angus Thirlwell as I said earlier is my Business Shaper today; co-founder of Hotel Chocolat. They have been making chocolate for many many years, the brand Hotel Chocolat you may know since 2004, there’s beautiful shops, you can go on line, you can do all sorts of things to enjoy phenomenal chocolate. Thank you so much for joining me Angus.
Angus Thirlwell
It’s my pleasure Elliot.
Elliot Moss
Now this chocolate obsession, this thing – when did it start? And then let’s get into what this business is about.
Angus Thirlwell
Well the thing is with chocolate and cocoa it sort of sneaks up on you and gets its tentacles into you and if I am being really really open and honest about this, we were in love with peppermints first and…
Elliot Moss
You’ve committed chocolate blasphemy.
Angus Thirlwell
I know, I know.
Elliot Moss
He’s done it so early, he’s gone early.
Angus Thirlwell
And it was really a business that we had that was all about little packs of peppermints and we were completely consumed with the idea of, you know, fresh, clean mints and our customers kept saying to us ‘don’t you do anything else apart from the mints?’ and I must admit, rather reluctantly I started having a look at chocolate but once I, I researched it and got to know a bit about it I realised just how creative you can be with chocolate. You know, you can add other flavours, you can make it multi-layered, you can use different origins of cocoa, you can sculpt it into different shapes and I very quickly forgot about mints and after that I was a very sort of immersed chocolate person.
Elliot Moss
So 1988 it starts with mints and a bit of chocolate. By ’93 you are focussed on chocolate and by, I imagine by 2004 is when you launched the Hotel Chocolat brand and business. Tell me in a nutshell what the Hotel Chocolat brand and business looks like right now?
Angus Thirlwell
Right now we are, well we are what’s called vertically integrated so we, we grow cocoa on our plantation in St Lucia. It is really rare and amazingly flavoured cocoa. We also manufacture our chocolate in the UK in Cambridgeshire and we distribute our chocolates directly to our own customers through on line channels, we have a tasting club as well with 70,000 members and eighty four shops and we really declined to distribute our chocolates through supermarkets for example because we believe that the environment within which you begin the relationship with the chocolate is as important as how it tastes when it melts in your mouth. So we wanted to I suppose you know, call us control freaks, but we want to make sure that the whole environment is as nice as it possibly can be and you know, Hotel Chocolat is meant to be an escapist proposition so it’s intended to take you out of yourself and you can check-in to this amazing world where you know, the humdrum just melts away and you are in this amazing space.
Elliot Moss
And this amazing space that you have created for the great people of Britain and beyond. Over a thousand people work for you, coming up twelve hundred people and you’ve got revenue of around ninety million pounds, is that right?
Angus Thirlwell
Yes it is yeah.
Elliot Moss
Not bad hey. We will be hearing lots more from Angus, my Business Shaper today; co-founder of the fantastic business Hotel Chocolat. Time for some music and this is Kyrie from the James Taylor Quartet and the Rochester Cathedral Choir.
That was Kyrie from the James Taylor Quartet and the Rochester Cathedral Choir. Angus Thirlwell is my Business Shaper and he is the co-founder of Hotel Chocolat and it is a small business, over a thousand people Angus. As we said around ninety million pounds of revenue, news relatively hot off the press, pretty recently – you are looking to float an IPO? How did you get to this point of deciding this was the right thing to do? What’s that all about?
Angus Thirlwell
Well we feel you know, we are ready to enter the second chapter of Hotel Chocolat. We spent the first decade getting the brand built up, creating a good customer base and things are going well. We could do with some more investment capital to put into our chocolate making facility in Cambridgeshire and we really want to step up the rate of our store openings and also our website’s pretty good and we want to make it really excellent so wrap all those things up and it’s, you know, if we can float the business we can raise some extra capital and inject it in and take Hotel Chocolat into its next chapter.
Elliot Moss
And I envisage, imagine you want to be part of that next chapter too. This isn’t about you going ‘oh I think I am tired Elliot’. You don’t look like you are tired of this?
Angus Thirlwell
Oh absolutely not, no I am… anybody you know, who knows me will tell you, you know, I sort of live and breathe cocoa and Hotel Chocolat.
Elliot Moss
He has a massive smile on his face by the way at this point, it is just like he is beaming. This man is a happy man.
Angus Thirlwell
And you know, one of the pre-requisites for sort of doing this float was we stayed in control so we are only floating a minority of the business and together with my long-term business partner, Peter Harris, we are going to own the majority of the company for a long time.
Elliot Moss
Okay.
Angus Thirlwell
So it’s very much business as usual, same brand, same leadership team, you know, same quality, it just gives us the ability to do our exciting things, you know, faster and sooner.
Elliot Moss
Now many years ago I recall you were the guys behind the chocolate bonds, weren’t you? You raised money before kind of crowd funding and all those other things were fashionable. Just tell me a little bit about that and what led you to that decision at that time. Was it purely a PR play or was it a bit more than that?
Angus Thirlwell
No it was really just a bit of brain storming. We were thinking… it was a similar moment where we were at the time investing quite heavily into our chocolate making factory and we were thinking ‘okay well we could do with some more capital where are we going to get it from?’ and we thought well wouldn’t it be great if we could actually pay the interest to our own customers rather than to a big bank and you know, that brain storming led to well if we are going to pay the interest, why shouldn’t be pay the interest in chocolate as well, it sounded like a funny idea but then we realised that actually we had a very strong and loyal customer base who were spending that money on our chocolates anyway and what we could offer them was really a way to buy their chocolates more efficiently in return for giving us the money rolled up in advance and we would then put it to use as an investment and after a while we would repay the money to them. All the while we were using the money we would pay the interest in chocolate. So it sounded like a funny idea and there was a lot of media speculation that it would fall flat on its face, actually we raised 3.5 million pounds and it was covered in the press all the way from, you know, America through to Australia and everything and then a few years later we did a second one and also raised another 3.5 million and we, you know, really forever grateful to our bond holders who, and a vast majority of them have still rolled over the bond investment with us as well, so they seem to be enjoying the return in chocolate and it has enabled us to really power the business ahead and it put off for several years the time when we would actually need to float the business.
Elliot Moss
So you see, sometimes brain storms do throw up fantastic ideas and in this case it did. Much more coming up from my Business Shaper today, that’s Angus Thirlwell; he’s the co-founder of Hotel Chocolat. But before that, for the first time ever, it’s a premier here on Jazz Shapers, we are featuring people who are going to be shaping the world of business in the future, we are calling them Future Shapers and here’s the very first one.
This is Jazz Shapers with me, Elliot Moss on Jazz FM. Every Saturday I get to talk to someone who is shaping the world of business. Doing an interesting thing that we all listen to and go ‘I wish I did that’. My ‘I wish I did that person’ today is Angus Thirlwell and he is the co-founder of Hotel Chocolat. Now we were talking about earlier, about your partner, very briefly, Peter Harris. You and him go back almost thirty years now. Partnership is obviously critical to what you do. How does it work between the two of you? Who’s good at what?
Angus Thirlwell
Well it’s a bit of a stereotype but Peter is more rational, he’s a chartered accountant and tends to be the one who, you know, brings that side to it. I am more excited by ideas and concepts, together we sort of argue things through but for quite a few years now the leadership team has been you know, much more than just me and Peter. We’ve been able to attract some amazing talent into the business and they’ve really contributed so it’s a long time since it’s been the Angus and Peter Show and I can’t make that point more clearly really. No, it’s, you know, like most things in life, if you, you know, you get back what you put in and having a, you know, long-term relationship on a business level with somebody like that is built on respect, a great sense of humour and you know, I wouldn’t be in partnership with him if I didn’t think he was actually good at what he does and hopefully the same thing.
Elliot Moss
When you set off, did you envisage that you would be talking about this almost thirty years later and it would be a wild success or was it more, it just felt like the right thing to do at the time?
Angus Thirlwell
A bit of both really. I mean, when you are starting something as an entrepreneur you, you know, you’ve got to have big ambitions you know, you really think that you can conquer the world but you are also are caught up in the moment of just wanting to get started and do it. So it’s a bit of a balance of the two things. So it hasn’t, no it hasn’t really surprised me that it’s worked. I was absolutely you know, and I am still am, very obsessed about you know, making it work and keeping it working and it’s been huge fun so far and you know, we all feel that we are only you know, like two chapters through out of ten chapters of Hotel Chocolat. So there is a long way yet to go.
Elliot Moss
Now one of those first chapters was being on the Internet before really people took the Internet seriously back in the early ‘90s. Very innovative. We’ve just talked, I am jumping a few years back to the chocolate bonds, incredibly innovative. Your father was one of the founders of Mr Whippy which people of a certain generation will go ‘wow Mr Whippy, no way’ and others that are younger will think ‘I have no idea what he is talking about’. But the serious side is this entrepreneurial thing, this innovative drive, this desire to as you said, kind of think big and be ambitious, is it in the DNA do you think? Is there a truth in that or is it just that Angus himself was going to be this kind of person or was your father an influence?
Angus Thirlwell
I know lots of other entrepreneurs and there is not a particular definite set of skills that you have to have. I think you, you know, you can become an entrepreneur you know, even if you are not extrovert or you know, not a good communicator or anything like that. All shapes and sizes of people can become an entrepreneur. The influence of my father has been quite significant and in fact continues to be there because he is in his early eighties now and he is still working hard and enjoying what he does and that made business look interesting and exciting to me when I was a boy. That was very very influential I think in forming you know, my opinion that I wanted to get into something similar.
Elliot Moss
Stay with me for more from Angus, my Business Shaper today. Time for some more music, this is Rebecca Ferguson with What Is This Thing Called Love.
You are listening to Jazz Shapers and this is Angus Thirlwell’s time, he is my Business Shaper today; co-founder of Hotel Chocolat, the business that will very shortly be all being well, listed on… where are you listing actually out of interest?
Angus Thirlwell
On the AIM market.
Elliot Moss
On the AIM market. Is that okay at the moment because the AIM has gone through a bit of a, you know, it had its moment and then it went a bit quiet. Why AIM for you?
Angus Thirlwell
No its doing, its doing well.
Elliot Moss
Doing well again?
Angus Thirlwell
It’s doing well yeah, I mean it seems very stable. There is a lot of other good brands on AIM, you know, Majestic Wine, ASOS, you know, companies that we really respect and have grown to be quite, you know, significantly sized as well so the AIM market is intended for fast growing, new businesses and that fits the profile of Hotel Chocolat. It’s less expensive from a regulatory point of view than the main market as well so again we would rather save our capital and put it into some you know, amazing new chocolate making piece of kit than spend on regulatory fees.
Elliot Moss
The growth of the business over the last few years, it looks like it has been pretty well managed. It’s not out of control, it’s significant, you’ve scaled. How have you managed to do that in such a, what appears from the outside, a controlled way. Because that’s one of the hardest things people always talk about, that moment from going from one or two to five or ten and then suddenly you are really now a significant sized business. What have been the key traits or not just you in the team leading it but obviously of your team. What have you managed to capture inside that team that has enabled you to achieve success?
Angus Thirlwell
I think one of the things is that we don’t move on from a particular part of our business model until we have made the current one work and under the hood of Hotel Chocolat there’s quite a few different business models we have had to master. You know, the first one was Internet retailing and that’s quite hard when you have got fundamentally something that even though it is a luxurious product it is quite a low ticket item. It’s nowhere near as expensive as say fashion, you know, you are not spending a hundred or two hundred pounds. You might be spending twenty or fifty pounds so that took me quite a few years to get that working. We then moved on to find out about physical retailing – how do you become, you know, a successful shop keeper – completely different set of skills. Some of them are portable across and some are not. Then more recently we have been working on trying to develop a café in a shop format in the same space. Again, you know how do you operate effectively a food and beverage business - new set of skills – and along the way becoming a manufacturer as well and…
Elliot Moss
This is a lot, I mean, and you haven’t done these completely sequentially. They’ve had to have kind of inevitably crossed over so is that about bringing in new, new people literally to kind of take charge or is it slightly different?
Angus Thirlwell
It’s a little bit but also just having the discipline that you don’t allow yourself to start the next thing until…
Elliot Moss
You’ve really bedded it down?
Angus Thirlwell
…the plate of things that you are working on at the moment are yeah, exactly Elliot, are bedded down and on the right trajectory so the, you know, the graphs are pointing the right way then you can then say ‘right I’ve made that begin to work, I am now going to pass it on to the rest of the team because it’s in a fit state that it can now benefit from professional management’ and it’s gone, if you like, past the entrepreneurs input to, to shape and make it begin to work and then it can benefit more from you know, just good and consistent management.
Elliot Moss
And that moment I imagine is critical to know when you need to transition from I am creating into this is now stable.
Angus Thirlwell
Yes.
Elliot Moss
And it must be a craft skill that you have developed along the way?
Angus Thirlwell
I think inside the business we have become quite good at that and we’ve become a sort of incubating ground for, you know, new concepts that are united by the Hotel Chocolat brand.
Elliot Moss
Very smart hey, it’s a bit of a lesson in how to grow a business up to a significant size and then all being well, float. Final chat is coming up with Angus plus we will be playing a track from Frank Sinatra. That’s after the latest traffic and travel.
Frank Sinatra and I Get A Kick Out Of You, hard not to smile when you listen to that. Angus Thirlwell is my Business Shaper just for a few more minutes. It strikes me you are able to time travel a little bit Angus, you can look at the same situation and project forward where you need to be and at the same time sort of be in the present and when we talk about the sparks of the business and then professionalising those businesses then are beyond the spark session. How have you developed that? I mean, have you done it intentionally. Have you had to pull yourself out of being super busy and say ‘no this isn’t working’ or is this just part of your predisposition?
Angus Thirlwell
A lot of it is by making mistakes and you know, you tend to find by doing that that you, I mean it’s an old cliché, but you learn so much and you find where your own limitations are and when is the right time just to stop. If you have got the best interests of the brand and the business at heart you learn quick. If you are planning a different agenda which is all about you know, perhaps ego or some other you know, thing that you are trying to do that’s actually against the best interests of the business then you know, that could create conflict.
Elliot Moss
Looking forward, obviously you have got this extraordinary exciting thing happening and all being well, kind of life changing, business changing as well as other things. You said you want to have and you will have a controlling stake in the business and you will still be driving it. What does the future look like? What will the next few years look like for your business do you think all being well?
Angus Thirlwell
I think we pretty much set out our train set. We’ve got our café and shop format beginning to work well and we see significant opportunities in the UK market for that. The digital side of the business is getting very strong growth and we have a load of new innovations around that, that we want to bring to the market. And then turning to I suppose our recipes and our products, we, we just have a pipeline full of the you know, some of them are admittedly are slightly crazy ideas but we are going to bring to market and just as we have done over the last ten years, they are going to shake things up a bit and you know, make people think. One example is we just last year, we brought out a milk chocolate that has more cocoa in and less sugar than a high cocoa dark, called Super Milk so it’s got 65% cocoa, about 15% sugar and 20% milk so its creamy and its mellow but it’s just got a lot less sugar in and it’s a real crossover between milk and dark and it’s got a real fan base but it was new in the market and it is taking a while to, you know, to do that, to plough a new furrow.
Elliot Moss
Well I am going to be trying it because that sounds really good and I like milk chocolate but I always know that it is meant to be healthier to have the dark one. So you are like Willy Wonker over here, you have just solved a problem.
Angus Thirlwell
Well that’s where we have most of our fun really, conjuring up new ideas that are going to just, you know, play with people’s minds as well as their taste buds.
Elliot Moss
Thank you so much for joining me Angus and sharing so much with me and really good luck. I genuinely mean that, good luck with the float and everything else. I am sure it’s going to go great.
Angus Thirlwell
Thank you, I appreciate that.
Elliot Moss
Just before I let you go, what’s your song choice and why have you chosen it?
Angus Thirlwell
It’s a song by Art Tatum called Too Marvellous for Words and it’s really dedicated to my amazing wife who is the power and in many ways, the genius behind the throne. So we, you know, we enjoy going on big walks and I share ideas with her and she has really, you know, shaped my business career and well, this song is all about her.
Elliot Moss
Fantastic, here it is for her. Thank you.
Art Tatum and Too Marvellous for Words, the song choice of my Business Shaper, Angus Thirlwell; dedicated to his wife. An incredibly innovative man, an incredibly innovative business in fact. They were the first on line really doing what they did with the chocolate business, they were the first people to raise money through chocolate bonds and they are going again, they are about to IPO. Really interesting stuff. Structured approach to business, there are many moving pieces in this man’s business but they have managed to work out when to drive the spark and when to bring in professional managers and not to confuse the two. An ambitious but in a really appropriate way, they keep going again because they keep believing there is more just around the corner and it’s really really nice to hear. Do join me again, same time, same place, that’s for another edition of Jazz Shapers, here on Jazz FM. But don’t go away right now because coming up next it’s Mr Nigel Williams.