Making It with Jon Davids: Episode 178 - Building a $340M Chocolate Brand by Accident | Hu Chocolate
Overview
In Episode 178 of Making It with Jon Davids, host Jon Davids delves into the unexpected journey of Hu Chocolate, a brand that transformed from a small restaurant dessert into a $340 million chocolate empire. Through a compelling narrative, Jon explores the pivotal moments, strategic decisions, and underlying philosophies that fueled Hu Chocolate's meteoric rise. This detailed summary captures the essence of the episode, highlighting key discussions, insights, and lessons for aspiring entrepreneurs.
1. Introduction to Hu Chocolate
Timestamp: [00:00]
Jon Davids sets the stage by introducing Hu Chocolate, emphasizing its remarkable growth from an accidental creation to a multi-million-dollar brand. He highlights the founders—Jason, Jessica, and Jordan—and their initial venture into the food industry.
“These three turned a little restaurant into a $340 million chocolate brand. And they did it by accident.”
— Jon Davids [00:00]
2. The Founders’ Journey
Timestamp: [00:45]
Jon recounts the origins of Hu Chocolate, beginning in 2009 when Jason, a hedge fund professional, faced health issues due to his demanding job. This health crisis spurred him to adopt a cleaner diet, leading to the creation of healthier food options.
“Jason is drowning in spreadsheets and late night takeout. And his health is paying the price.”
— Jon Davids [00:45]
Determined to improve his well-being, Jason collaborates with his wife Jessica and brother-in-law Jordan to establish Hu Kitchen, a paleo-focused restaurant in New York City. Their commitment to clean eating and minimal ingredients quickly resonated with customers.
3. The Accidental Breakthrough
Timestamp: [02:30]
The turning point for Hu Chocolate came unexpectedly through one of their dessert offerings. A particular chocolate recipe became exceptionally popular among restaurant patrons, prompting the founders to consider spinning it out as a standalone product.
“They spin out the chocolate and turn it into its own bar so people can buy it individually.”
— Jon Davids [02:30]
This decision to focus on their signature chocolate laid the foundation for what would become Hu Chocolate's flagship product.
4. Scaling the Brand
Timestamp: [04:15]
By 2013, Hu Chocolate had made its debut in Whole Foods, quickly selling out and generating substantial buzz. The brand's commitment to simplicity—avoiding dairy, palm oil, refined sugar, soy lecithin, and other additives—differentiated it in the crowded chocolate market.
“It doesn’t have no dairy, no palm oil, no refined sugar, no soy lecithin. Just simple dark chocolate.”
— Jon Davids [04:15]
This minimalist approach appealed to health-conscious consumers, facilitating rapid expansion across multiple retail locations.
5. The Movement Formula
Timestamp: [06:50]
Jon introduces his "Movement Formula," a concept from his book Marketing Superpowers. This formula—Unifying Belief × Faith = Action—played a crucial role in Hu Chocolate's success.
- Belief: Clean eating as a unifying principle.
- Faith: Reinforcing clean eating through product attributes and brand messaging.
- Action: Encouraging purchases through trusted, high-quality products.
“When you are the leader of a movement, you can sell a whole lot of product because people will know you, they will like you, they will trust you, and they will keep buying what you're selling.”
— Jon Davids [06:50]
By aligning their brand with the clean eating movement, Hu Chocolate harnessed collective consumer values to drive sales and loyalty.
6. Strategic Funding and Acquisition
Timestamp: [14:20]
Jon discusses the critical role of funding in accelerating Hu Chocolate's growth. Prior to its acquisition, Hu secured a Series A funding round led by Sonoma Brands, attracting notable investors like Mark Hyman, Tim Ferriss, Nelson Peltz, and Peter Attia.
“Hu did secure funding... Mark Hyman, Tim Ferriss, Nelson Peltz, Peter Attia.”
— Jon Davids [14:20]
In April 2019, additional investment from SNAC Futures, Mondelez International's innovation hub, paved the way for the eventual acquisition by Mondelez in January 2021 for $340 million.
“Mondelez themselves went ahead and purchased the brand thereafter in January 2021.”
— Jon Davids [15:00]
7. Lessons in Focus and Customer-Centricity
Timestamp: [18:10]
Jon emphasizes the importance of focusing on core strengths and listening to customer feedback. Hu Chocolate's decision to hone in on their popular chocolate bar, rather than diversifying excessively, was pivotal in their exponential growth.
“They zoomed in on the product that everybody was asking for, the chocolate. And they knew they could be unique there.”
— Jon Davids [18:10]
He contrasts this with common entrepreneurial pitfalls, such as trying to please everyone and diluting the brand's mission.
“Do more by doing less. Focus.”
— Jon Davids [22:00]
8. Reflections and Entrepreneurial Insights
Timestamp: [21:30]
Jon shares personal reflections on leadership and the importance of not idolizing successful entrepreneurs. He highlights that success often stems from assembling the right team and leveraging diverse skills rather than solitary genius.
“Entrepreneurs and people who are business builders are basically just gathering resources and maybe they have some insight.”
— Jon Davids [21:30]
He advocates for analyzing successful strategies and applying best practices while avoiding others' mistakes, fostering a humble and pragmatic approach to business growth.
9. Funding Details and Clarifications
Timestamp: [16:40]
Addressing listener comments, Jon clarifies details about Hu Chocolate's funding rounds and corrects earlier misstatements regarding the founders' relationships, emphasizing the importance of accuracy and transparency.
“Jessica is Jason's wife. I get it. Sorry, I made a mistake.”
— Jon Davids [16:40]
He reiterates the significance of strategic investments and the role they played in positioning Hu Chocolate for a successful acquisition.
10. Conclusion: The Power of a Movement
Timestamp: [23:50]
In wrapping up, Jon reinforces the central theme of the episode: the synergy between a strong, customer-aligned movement and strategic execution can lead to extraordinary business success.
“When you also have an underlying movement, you can scale at hyperspeed.”
— Jon Davids [23:50]
He encourages entrepreneurs to develop and refine their own movement formulas, focusing on doing less to achieve more, as exemplified by Hu Chocolate's journey.
Key Takeaways
- Customer-Centric Focus: Prioritize what customers truly want and excel in delivering it.
- Movement Formula: Harness a unifying belief and reinforce it through faith-building actions to drive consumer behavior.
- Strategic Investment: Secure and leverage funding to scale operations and seize acquisition opportunities.
- Simplicity and Quality: Maintain a streamlined product offering with uncompromised quality to build brand loyalty.
- Team and Leadership: Assemble a capable team and lead by empowering others, avoiding the pitfalls of over-reliance on individual brilliance.
Final Thoughts
Episode 178 of Making It with Jon Davids offers an insightful exploration into how Hu Chocolate's accidental yet strategic pivot led to unparalleled success. By combining a strong movement-based approach with focused execution, the founders achieved a remarkable $340 million exit. Aspiring entrepreneurs can glean valuable lessons on the importance of listening to customers, maintaining focus, and building a brand that resonates deeply with its target audience.
For more insights and in-depth stories of entrepreneurial journeys, tune into future episodes of Making It with Jon Davids.