TCHO: Redefining Chocolate

The majority of the growth in the premium chocolate business in the US over the past several years has come as a result of an increase in interest in artisan confections. This has led to dramatic growth in the number of artisan chocolatiers capable of commanding premium prices for their goods.

Less dramatic, but no less interesting, has been the growth of artisan chocolate makers in the US. In 2005 the list contained one name: Scharffen Berger Chocolate Maker.

Their success, however, encouraged a number of people to start seriously looking at getting into the business of making artisan chocolate. The purchase of Scharffen Berger by Hershey Artisan Confections validated their efforts as it signaled that there were possible exit strategies beyond passing the business on to family members.

2006 and 2007 have seen the introduction of a new generation of artisan (defined as batch processed as opposed to continuous processing) chocolate makers. Interestingly, they are all in the West and Midwest: Theo in Seattle, Amano in Utah, DeVries in Colorado, and Askinosie and Patric in Missouri. While all are still learning their craft, each of them approaches the art of making chocolate with entirely different purposes and different equipment. Where they may be most alike is in the way they were started and financed: They are the product of individual visions, they have all taken two or more years from concept to production, and they are all closely-held.

The new kid on the block, TCHO in San Francisco, is about to change much of that.

The brainchild of Timothy Childs, a co-founder of Cabaret Chocolates who used to work on space shuttles before he started making chocolates. After a disagreement about the direction of the company that led to his leaving Cabaret, Timothy started looking closely at getting into making chocolate rather than confections. That interest was driven, in part, by his original desire to limit Cabaret’s reliance on chocolate from a single manufacturer located in Venezuela. Although the chocolate might have been good, the political situation in Venezuela is unstable, to put it mildly. Timothy was encouraged along this path by one of the investors in Cabaret as well as a long-time friend, Louis Rossetto, who is probably best known as a co-founder of Wired magazine.

From the start, one of the more interesting aspects of TCHO’s development was the mashup of traditional chocolate-making technology and Silicon Valley-inspired innovation and entrepreneurialism. It was not just enough to buy old machinery and refurbish it, TCHO hired a master mechanic and roboticist to strip away all of the old electrics and replace them with state-of-the-art process control electronics. The old equipment links them to traditional methods of artisan chocolate making that is enhanced by an awareness of what is happening at every stage of the process – and the ability to control many of the variables – normally only available to industrial processors.

This blend of art and tech inspired by the lessons of Silicon Valley permeates everything TCHO does. It’s not just enough to make chocolate, they have to look at chocolate making technology and see how and where it might be improved. It’s not just enough to make chocolate, they have to re-think the way chocolate is being marketed and sold. Does percentage cacao really mean anything? What about origin? What about organic and “Fair Trade?” And (while they’re at it), why not think about the vocabulary of chocolate and see if there is a way to make it easier for people to understand?

This questioning of commonly-held assumptions is an integral part of many Silicon Valley startups. But it’s definitely unusual for the chocolate industry.

An example of just how different TCHO is going to be was revealed late last year when their first production was made available as a public “beta test.” A large chocolate company would have held focus groups and done limited distribution in test markets to figure out consumer reaction to their product – a process that can cost hundreds of thousands if not millions of dollars. Most artisan chocolate makers avoid any sort of market testing. They trust their instincts and the opinions of a few close friends.

TCHO, on the other hand, published an invitation on their web site for people who wanted to be involved in the development process. This is common in software and Internet development but highly unusual for food products.

Packaging of the TCHO beta bars.

It is an example of a brilliant marketing strategy. First, TCHO does not have to pay for expensive focus groups and market-by-market consumer testing. Second, they build buzz around a concept I call artificial scarcity. While anyone could go to the web site and order one of the beta bars, you actually had to go to the factory in San Francisco and pick the order up in person. TCHO would not ship the bars. The limited availability added cachet to the buzz, drove up interest, and led to people on the East Coast who wanted to get in on the beta test to get friends in the Bay area to place orders for them, go to the factory to pick them up, and then ship them back east. Think about it: people were paying for the privilege of tasting a product that was not ready to go to market. Then those who did get their hands (and mouths) on a bar were asked to provide their feedback about what they did and did not like – for free.

Not only did TCHO save a bundle but they were able to build an enormous amount of word of mouth at quite a low cost, leveraging their knowledge of the Internet by applying it in a food marketing context.

TCHO is also looking at ways to simplify the chocolate-buying experience by avoiding the chocolate marketing trend that is most in vogue this season, percentage, and placing lesser importance on origin. The designation of the current beta release bar is “Beta C Ghana 0.XX.” The ‘Beta’ designation means that the bar is still being tested, the ‘C’ stands for the flavor profile (chocolatey – as opposed to fruity, nutty, etc.), and the ‘0.XX’ is the ‘version number’ of the release. Ghana is the country of origin of the beans, and as the web site attests, “refers to the single source for our ‘chocolatey’ bar, a land known for deep, rich cacao.” TCHO runs a small test lab and can turn around new versions of a chocolate based on feedback from beta testers in as little as 36 hours.

In talking with Timothy about their naming process – finding ways to accurately and succinctly talk about chocolate has occupied a lot of my time over the past decade – one unanticipated side-effect of the decision to simplify the naming scheme arose. That is that TCHO’s choices for beans are much more tightly constrained than they would be if they were promoting origin and percentage. What Timothy (who does most of the bean sourcing) has to do is find beans that, when processed and made into chocolate, will deliver the particular flavor profile they are looking for. Usually, when making origin chocolate, the chocolate maker tries to express the varietal and terroir characteristics of the beans – whatever that happens to be.

To do that, TCHO is working very closely with the farmers from whom they purchase their beans in a program that TCHO calls “Smart Sourcing.” Where I can appreciate the technical and market innovation TCHO is committed to, in the end, it is probably their approach to bean sourcing that will have the most profound and lasting impact on the chocolate industry.

The best parallel that can be made is the application of technology to the California wine industry. Prior to the development of the wine industry in California, high-end wine making was pretty much an art form based on hard-earned knowledge passed down as oral tradition through apprenticeships from previous generations. What really kick-started California’s growth as a major wine producer was the use of technology to deconstruct how great French wines were made and then to develop methods for understanding – and ultimately controlling – every aspect of the wine-making process.

By comparison and in the most fundamental and important ways, cacao post-harvest processing remains in the stone age. For example, very little is actually known about what variables affect fermentation and drying, and farmers, who are mostly responsible for doing the fermentation and drying, do not have access to accurate thermometers, moisture meters, and pH meters. While $300 for a moisture meter may not seem like a lot to you or me, in many cacao-growing countries it can represent the entire value of the cacao crop for a farmer for a year and so is simply beyond reach. For a chocolate company looking to source quality beans, the investment is trivial compared with the potential return.

But can’t co-ops afford technology like this? In many cases, yes, but often they lack the sophistication and the will to make these sorts of community investments, even though everyone would clearly benefit. One of the best examples of this I personally came across was in a loosely-knit community of 90 farm families in Barlovento, a region in Venezuela known for its cacao (the Hacienda Concepcion, made famous by Cluizel, is in Barlovento). Even though the community had been organized for a decade, as a group they had never been able to agree to pool their profits to build a community fermentation center and drying pad even though doing so would be an invaluable resource to the community on many different levels, not least of which would be improving the consistency and quality of the cocoa they produced. As a group they lacked the will to do this and if even one farmer declined to contribute, the rest would not go ahead without that family’s involvement.

Unfortunately, this is all-too-common behavior in many cacao-growing countries. (Come to think about it, it’s all too common here in the US, where entrenched self-interest often trumps community investment.)

Eventually, Timothy envisions a mesh of sensors that evaluate and record every aspect of what’s going on in and around a fermentation box, correlating (for example) changes in ambient temperature and humidity with changes in chemical and thermal activity in the heap of fermenting beans. By doing so they hope to be able to develop reliable guides for optimal fermentation and drying, by varietal, by country. Better fermentation means better cocoa, which also means better chocolate. More importantly, by focusing on product quality issues, TCHO fully expects the farmers to start charging them more for beans, creating what is called a “virtuous cycle” (in TCHO-speak, a ‘spiral of quality’). Investing in farmers to improve quality results in an increase in bean quality that results in the farmer being able to earn more for their labor which results in improving the quality of life for the farmer and his family which will lead to continued improvement in the quality of the beans because the farmer gets a tangible – and meaningful – return on his investment of labor.

In typical TCHO style, Timothy is committed to innovating the cocoa supply chain into a “supply loop.” TCHO plans to take a percentage of revenues and reinvest them in hard tangible improvements in the cocoa processing facilities of their farmers. They also plan to invest early, before seeing finished crops, working with any person or entity that is interested to develop low-cost fermentation, drying, and other equipment and techniques and then transferring what they have learned to the farmer.

But how is the chocolate? It’s still in Beta so it’s really too early to tell. I was fortunate enough to get my hands on a couple of bars from two earlier beta releases, and while there was definitely room for improvement, the initial results indicate that when they finally settle on a recipe they’ll have achieved something remarkable from bulk West African amelonado Forastero beans.

Here are my initial impressions that I made on the TCHO chocolate bars I beta-tested. (I can’t believe I just wrote that.) In this e-mail I sent to Timothy, I am using for the first time some new language of my own to describe the flavor profile of a chocolate based on a music analogy in an attempt to reduce reliance on terminology borrowed from the wine world. (I’d like to hear your thoughts on this analogy – pleae comment.)

When I think of chocolatey when it comes to chocolate, one of the common flavor profiles that comes to mind is “baked brownie” and both the 0.18a and 0.18b batches have traces of this flavor in them.

Where the two batches differ most is in the “attack/decay/sustain/release” profile of the fruit acid flavors. In the 0.18a batch the fruit acids come to the front more quickly and are “sharper” (the attack) than in the 0.18b batch. The fruit acid notes – which don’t really have a distinctive flavor although they are probably more red fruit without any “drying” flavors (astringency) in them – diminish more slowly (the decay) and stay around slightly longer (the sustain).

Both batches have lightweight but quite long “releases” (or more commonly, finishes) to them in which the baked brownie flavor predominates but is joined by some other flavors. I detect virtually no astringency in either sample, which is pretty remarkable for typical Ghanaian beans – amelonado Forastero genetics feature quite heavily here. This lack of astringency from tannins and accompanying bitterness suggests that you are getting better than average fermentation delivered by most Ghanaian farmers. Careful roasting prevents the formation of bitter and tannic compounds from the flavor precursor components that are the result of fermentation and drying.

The very long aftertaste on both is very clean which is a strong sign of good quality control all the way through the process.

The relatively complex nature of the flavor profile is interesting for a chocolate using beans of West African origin. Normally I find the flavors of West African chocolate more monotonic, so being able to balance the fruit acid with the chocolatey flavors is something of an accomplishment.

The TCHO beta has now been opened up and they are accepting orders from all over the country and shipping them. For more information and to order, visit

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