IQ Chocolate: What’s essential to ensure a start-up survives – and thrives?

By Caroline SCOTT-THOMAS contact

- Last updated on GMT

The company uses a variety of Peruvian cocoa, which they chose for its nutritional profile as well as its taste
The company uses a variety of Peruvian cocoa, which they chose for its nutritional profile as well as its taste

Related tags: Chocolate

Four years ago two Scottish women with little experience of the food industry started developing a gourmet chocolate brand. Now they are moving into export markets – so what were the ingredients of success?

Part of the answer was complementary interests and skills, says co-founder and client services director Jane Shandley. She says she is more of a words person while her business partner Kate Hamilton is more analytical and figures-oriented.

“We are very different people, but when you boil it down, our values are very aligned,” ​she told FoodNavigator.

They were both in their late 50s and working at the University of Hertfordshire when they noticed their peers starting to retire, and Shandley said she was not ready to stop working.

“I got to the age and stage where I had the feeling I was running out of road for doing something that I could be really proud of. I started looking into trends in terms of health foods, and there were things that kept coming up – superfoods and nutrients.”

Meanwhile, Hamilton had developed a strong interest in single-origin chocolate.

“Kate was fascinated by the whole thing about the provenance of the beans and the beauty of the chocolate-making process,” ​said Shandley. “We felt we could bring the two together, chocolate and superfoods.”

Differentiation in a very crowded market

Vital elements for their early-stage survival included excellent market research, product differentiation, and support from the Scottish government, she said.

“We realised that if we were going to enter a very crowded market then we would have to differentiate ourselves so we decided to go down the verified health benefit route,”​ she said.

This was back in 2011, and Hamilton rigged up a chocolate-making contraption in her back yard, with a couple of tin buckets and a hairdryer. The company is still working toward an EFSA-protected health claim, but the chocolate instead carries general claims linked to specific nutrients that have been checked by a government-funded consultant, including for the health of hair, bones, skin, overall strength and energy.

Scottish support for healthy foods

Shandley explained that the Scottish government was particularly supportive of companies looking to develop healthy foods that could help improve the country’s reputation for quality food – like its seafood, for example – while moving public perception away from deep-fried Mars bars and Scotland’s high heart disease rate. IQ Chocolate gained funding from three different academic institutions.

“We decided to go down the route of making sure we had a very superior health profile…Nobody else in Scotland was doing it and we became Scotland’s first bean to bar chocolate maker,”​ said Shandley – but there were hurdles ahead.

The pair found a bean from Peru with very high antioxidant content, which they selected it for its flavour as well as its nutritional value. But the verdict from professional tasters was poor.

“Originally we were told we couldn’t possibly charge a premium,”​ she said. However, that was a very early version of the product – it was recently awarded two gold stars in the UK’s Great Taste Awards and currently retails at £2.49 for a 35 g bar.

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‘This had to work because we had literally put everything into it’

The laborious process of verifying health claims was also more difficult than they had anticipated.

“I had no idea about the amount of science that was involved,” ​said Shandley. “…It took much longer, was much more expensive and was much harder than I thought. In a way I’m glad I didn’t know that. I’m 61 now and we are regularly working 70-hour weeks.”

Still, the company has come a long way from its earliest days, when Hamilton took a prototype bar to each of the health stores and delicatessens in Scotland in turn. London is now the company’s largest market, the brand is listed in all its target retailers in the UK and in January, Shandley spoke to potential distributors in Qatar.

Apart from marketing the original dark chocolate varieties in new regions, the next step is expanding into the much wider market for milk chocolate. “The challenge for us is we don’t want to undermine our positioning as a health chocolate and the minute you go into milk or white chocolate you could do that,”​ she said.

“This had to work because we had literally put everything into it,”​ she added. “I put my pension into it.”

“There’s times we are battling with utter exhaustion – but we have such fun.”

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