Hotel Chocolat hails evolution to ‘digital-led brand’ as profits soar

The premium chocolate brand says “strong digital growth” more than offset disruption from store closures during lockdown.

Hotel Chocolat says it is “performing strongly” against its goal to evolve from a “UK store-led brand to globally ambitious digital-led brand” as profit growth has exceeded expectations.

The premium British chocolatier saw revenue increase by 21% to £164.6m in the 52 weeks to 27 June, 70% of which was generated through “digital, partners and continuity products”. Pre-tax profit rose from £2.4m in 2020 to £10.1m, while statutory profit after tax hit £5.7m compared to a loss of £7.5m during the same period last year.

Following a year of “strong digital growth”, which the brand claims more than offset disruption to physical retail, sales growth accelerated further from April with the re-opening of UK stores post-lockdown. Hotel Chocolat says these results indicate the “effectiveness of the multichannel sales model”.

Hotel Chocolat’s boss on the value of customer insight in driving digital growth

The company experienced a 31% increase in its active customer database to 1.8 million, while its in-home hot chocolate system Velvetiser is said to be offering a high lifetime-value subscription model.

The brand also pointed to success in the US market, where it has pivoted from a store-led to digital-led strategy, and the growth of its Japanese joint venture, which is now trading from 27 Hotel Chocolat stores. From a global wholesale perspective, the business claims its strategy of creating capsule ranges tailored for each partner retailer is driving strong growth.

I am confident that the strategic progress we have achieved over the past year has improved the performance and prospects of the business for significant years to come.

Angus Thirlwell, Hotel Chocolat

Hotel Chocolat says it is continuing to strengthen its brand, for example through the launch of its Gentle Farming Charter. The charter enables every farmer suppling the brand to earn a ‘living income’ by further increasing the price paid for cacao to better reflect local costs of living. In return farmers commit to sustainable farming practices, zero deforestation and zero illegal child labour.

The business is also pressing ahead with innovation, including introducing new Velvetiser flavours, enhanced gifting ranges and a new Rabot Estate Coffee range. Some 94% of all Hotel Chocolat product packaging is now ‘widely recyclable’, on track for 100% recyclability by the end of 2022.

The brand plans to ramp up investments to enhance its digital customer experience, including improved VIP Me loyalty capabilities in-store launching in the spring. In addition, tech upgrades will be rolled out to support “scalable multichannel growth” and improved CRM and subscriptions.

Hotel Chocolat cofounder and CEO Angus Thirlwell says the company has improved on many fronts over the past year, with digital and subscription-continuity models surging ahead and its global aspirations ramping up.

“The continued challenges of Covid-19 pushed us to accelerate many of our existing plans and strategic initiatives, helping to strengthen our financial position, improve our multichannel capability, deepen customer engagement and loyalty, and accelerate the rate of product innovation, while continuing to make good progress in our two new and sizeable markets of the USA and Japan,” he adds.

“I am confident that the strategic progress we have achieved over the past year has improved the performance and prospects of the business for significant years to come.”



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