A STUDY OF BRANDS / Godiva’s chocolates offer taste of luxury

Written by Meenaa on Wednesday, November 19th, 2008

Godiva, an upmarket chocolate brand originally from Belgium, made a new start in March when it came under the umbrella of a major Turkish food manufacturer.

Ahead of this year’s Christmas shopping season and St. Valentine’s Day next year–the sweetest parts of the year for chocolate makers–Yomiuri Shimbun Staff Writer Masufumi Miyoshi interviews Jim Goldman, president and chief executive officer of Godiva Chocolatier Inc., in this 19th installment in a series on the world’s high-end brands.

Speaking during a recent visit to Japan, Goldman talked about the company’s future business strategies.

Born in Connecticut in 1958, Goldman earned an MBA at Cornell University. He has served in executive posts responsible for North American operations at leading U.S. food groups, such as Nabisco and Campbell Soup Company. He assumed his current post in March 2004.

The Yomiuri Shimbun: What are Godiva’s strong points?

Jim Goldman: Godiva has been leading the premium chocolate market for more than 80 years. Of the chocolate brands that uphold Belgium’s traditions, Godiva is the most iconic. Customers sometimes buy our chocolates for the luxurious packaging. What’s more, our customer base is global and we have a massive network of shops. As a considerable amount of investment and strong determination is required [to succeed in this business], it isn’t easy [for many of our rivals] to establish an international network of shops.

What is Godiva’s strategy for St. Valentine’s Day?

St. Valentine’s Day is important for our shops worldwide. Of course, we’ll make every effort to have yet another successful St. Valentine’s Day–particularly here in Japan. About 30 percent of our sales in Japan occur during this special occasion.

At the same time, I think we can increase sales in Japan during the rest of the year. In fact, we’ve already introduced a series of new products, and our sales have been on the rise during periods other than St. Valentine’s Day.

Can you elaborate on those new products?

For example, we’ve introduced ice cream products, which are selling quite well. As a result, we can attract more customers when the weather is warm. We’ve also added a collection called Chocoiste, which is a variety of packaged bite-sized gourmet chocolates. You can easily take the pack wherever you go.

How has Godiva been performing globally?

We now have shops in a large number of countries. Our largest market is North America. In Asia, we’ve been experiencing our most rapid growth. Currently, our annual worldwide sales are about 500 million dollars (about 50 billion yen). But given the strength of our brand, I expect our global sales to surge to 1 billion dollars in three to five years.

Which markets does Godiva plan to focus on from now on?

We want to establish a widespread presence in China, where we currently have shops only at airports. We also plan to start business in South Korea.

Our group now has shops in 60 countries. This means we have shops in most major markets. From now on, we’ll focus more on deepening and widening our existing presence rather than simply tapping new markets.

How do you see the Japanese market’s growth potential?

I think the potential is high. In Japan, we’re accelerating the pace of new shop openings. In the coming year, we plan to open 10 new shops with traditional Godiva configurations and 12 new outlets that will exclusively deal with private consumers [looking to treat themselves]. In terms of numbers, these plans are unprecedented in our history.

When we look far ahead in Japan, I think there is room for us to add 50 locations to our network of traditional shops in five years’ time. We expect the network of shops exclusively for private consumption to increase to 50 to 100 outlets in the years ahead.

Does such an ambitious expansion strategy reflect the change in company ownership?

I envisioned such a plan, and I was convinced that Godiva would grow considerably along with the plan. However, under the leadership of the previous owner [Campbell Soup], we hardly had any opportunities to proceed with our own plans. At that time, Godiva was merely a tiny part of a huge business group. For [Campbell Soup], Godiva was a low priority unit.

Is the global recession affecting purchases of Godiva gift products?

Godiva provides products that are a luxury within reach. Unlike high-end material products like bags and accessories, Godiva customers can readily enjoy a taste of luxury with our products. Of course, prevailing economic circumstances are severe. But they may ultimately provide stepping stones for Godiva.

Woman on horseback rides high in Japan

In 1926, Brussels chocolatier Joseph Draps opened a chocolate company and named it in honor of the legendary Lady Godiva. His products, innovatively designed with beautiful packaging, immediately gained popularity as upmarket chocolates in Belgium.

In 1958, Godiva opened a shop in Paris, its first foreign outlet. It then extended its international reach to New York and Tokyo–at Mitsukoshi and Takashimaya department stores in Nihonbashi–in 1972.

In 1974, Godiva moved its head office to New York after it was acquired by Campbell Soup Co., a major U.S. food company.

In March this year, Godiva Chocolatier Inc. was purchased for 850 million dollars by Yildiz Holdings S.A., which runs Turkey’s largest confectionery company, the Ulker Group.

Today, Godiva chocolates are on sale at about 10,000 shops in about 60 countries. In Japan, Godiva has more than 230 points of sale, many of them in department stores.

A major portion of Godiva’s annual sales are in winter, when chocolates are traditionally favored as gifts. To generate sales evenly throughout the year, the group started focusing on non-gift areas about three years ago, offering so-called self-treat products, including ice cream and chocolate drinks.

In January 2007, Godiva opened a boutique exclusively for self-treat products at Shinjuku Station. The boutique is the first of its kind in the world. Aiming to attract young customers, Godiva Japan Inc. now has six of these outlets. The products typically range in price from 350 yen to 700 yen apiece.

The Godiva brand was named after the 11th-century wife of Lord Leofric. According to legend, Lady Godiva protested to her husband about the heavy taxation he had imposed on his tenants in Coventry, England. Leofric offered to lower the taxes if she rode naked through the streets of the town, which she did.

Joseph Draps’ praise of Lady Godiva for her spirit of sacrifice and passion is embodied in the Godiva logo–a naked woman riding a horse.
(Nov. 19, 2008)