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Zoe’s Chocolate: The Profit Updates in 2020

by Molly Morrow
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THE BASICS

  • Company: Zoe’s Chocolate
  • Product: Handcrafted Artisan Chocolates
  • Problem: Declining sales, disorganization, crippling debt
  • Marcus’s Offer: $200,000 for 40% equity
  • Season/Episode: Season 4, Episode 18

All You Need Is Love…and Chocolate

Chocolate is thicker than blood, and in Waynesboro, PA, nobody knew this more than the Tsoukatos family. When the family patriarch, George Tsoukatos, lost his job as a chocolatier in the mid-aughts, his three adult children wouldn’t let him wallow. They encouraged him to put his baker’s mitts on and go into the chocolate business for himself. To prove a point, they quit their jobs and moved back home from Washington, DC. to help run the family business. The eldest child, Zoe, took particular interest in the project. Her vision? To save her father’s livelihood – and in the process, churn out exquisite, artisan chocolates inspired by the family’s Greek heritage.

In 2007, Zoe’s Chocolate emerged at the top of the chocolate game, quickly earning a prized partnership with Whole Foods and coveted celebrity fans like Martha Stewart and Anthony Bourdain. Their chocolates could be found in upscale boutiques, hotels, professional conferences, and gourmet restaurants across the country. But fast forward a decade, and exhaustion and burnout were running rampant. Their ambition diminished, and their sales declining, the company took on debt in a last-ditch attempt to save the company. It wasn’t enough.

Would Marcus and The Profit be able to save this talented family of chocolatiers? Read on to find out.

Zoe’s Chocolate Company on The Profit – Episode Recap

Zoe gives Marcus a tour of the confection shop and lets Marcus try a few samples. Impressed with the quality and the exquisite taste of the candies, Marcus can see he’s dealing with a truly extraordinary company. His one critique, as he looks around the shop, is that the counters and display cases aren’t full enough. “It looks anemic,” says Marcus.

In the kitchen, Marcus meets Zoe’s father (and master chocolatier) George, Zoe’s brother Petros, and Zoe’s mother Eleni. The family history is evident in the black-and-white photos on the walls and in the recipes on the counter. George has been in the chocolate business forty years, and it shows in his romantic philosophy: “The most important thing is to love each other,” he says, in a charmingly thick Greek accent.

Life Is Like A Box Of Chocolates…Without A Brand

Pennsylvania is the heart of the pretzel business in the United States, and yet Zoe’s isn’t selling any chocolate-covered pretzels. A chocolate company that doesn’t sell chocolate-covered pretzels is borderline criminal, in Marcus’s mind, and reveals quite a bit about the disorganization at the heart of the company’s marketing processes. Any good chocolate company worth its sugar should be offering chocolate-covered pretzels. When he sees that they’re not taking advantage of regional markets to make relatable products, he asks about research and development.

The family falls silent. There is none.

Marcus has a few bones to pick with the company’s packaging, too. They’ve got a fantastic family story, but they’re not telling it. Their packaging is bland and generic, and worse yet, it makes no mention of their proud Greek heritage or their father’s impressive career as a high-end chocolatier. This will all have to change if they are to succeed, Marcus advises.

In a heart-to-heart with Zoe, Marcus digs a little deeper into the sacrifices she’s made and the problems she sees with the business. Things are grimmer than they look. She knows they should be farther along for their age, and she’s disappointed that they’re not stable after so much work and time has been poured into the company. The previous summer, she says, they were forced to take out a line of credit. The company has $170,000 in credit debt – and sometimes the employees go without paychecks.

zoes chocolate marcus the profit - Zoe's Chocolate: The Profit Updates in 2020

Running the Numbers

Marcus digs into the financials with Zoe and the rest of the family. A precipitous drop in revenue between 2015 and 2016 has Marcus worried. Zoe’s lost their distribution deal with Whole Foods that year. When Marcus asks why, he reveals a fundamental flaw in the foundation of their company: crippling inflexibility. They’re not willing to follow the trends or make the products that are top-sellers for Whole Foods, they say, because it’s not in line with their brand or their preferred style of chocolate-making. Marcus is quick to impart some hard-earned wisdom: “There’s a point where protecting the brand becomes counter-productive.”

  • Line of Credit: $90,000
  • 2nd Line of Credit: $30,000
  • Car Loan: $30,000
  • Credit Cards: $12,000
  • Cash In Bank: $60,000
  • Net Worth: $-102,000

Despite the company’s dire financials, Marcus has hope for the company. The product is spectacular and the fact that the children of the family have sacrificed so much to keep the business alive speaks volumes. He makes an offer, and after a bit of persuading, the family accepts – handing over full financial and operational control to Marcus.

Changes & Adjustments

Marcus thinks the business has plenty of room to improve in just about every area of operations. In exchange for his help, he wants to see major changes. Specifically, he wants to see:

  • New Products – the product offering is much too narrow
  • New Storefront – including a new retail experience
  • New Online Presence – including increased order capacity
  • New Strategic Partnerships – including expansion plans
  • New Brand Identity – the business needs to tell their story: their heritage, the incredible sacrifice the children made, their father’s career and credibility, etc.

In order for the business to really turn a profit, Marcus knows the business will need to thrive online and get a serious organization makeover. To put the business to the test, he hosts a Facebook live video, calls for orders, and sees how the team measures up. The video racks up 8,000 views in 15 minutes, and generates 150 orders. More orders, it seems, than the confection shop can actually fill.

Hectic footage reveals cluttered back rooms full of boxes and random assortments of packing materials, no discernible system of organization, and an atmosphere of weirdly casual chaos. The crew scrambles to find basic items and trips over each other trying to get through the work.

Marcus ends the segment by reiterating the importance of organization, cooperation, and innovation – particularly when it comes to developing new flavors, new products, and new systems for filling orders.

Flex Chocolate

With construction and new product development underway, Marcus pairs up the chocolatiers with the makers of Flex Watch. Flex Watch, he says, have proven themselves to be masters of marketing and branding. He suspects they can lend Zoe’s Chocolates a much-needed hand.

The Flex team reveals that the Facebook live event ultimately racked up 150,000 views, two thousand comments and six thousand likes. (Not bad for an old-fashioned chocolate company, right?) One of the most common questions the video raised was, unsurprisingly, what’s the story of Zoe’s Chocolate? Where’s all the info about the company? How did this amazing product come to exist?

Zoe and her brothers tell the story of the company again for the Flex watch team. Nobody can quite believe how special the children are, and how much they were willing to give up to rescue their father’s career. (This reporter does have a moral obligation to point out, however, that the children were all living and working in Washington, DC at the time of their father’s career crisis. Which means there’s a 90% chance they were absolutely miserable in their own careers and looking for any escape they could get their hands on. But I digress.)

“People buy from people they connect with, and stories they can relate to,” says Marcus. (We couldn’t agree more.)

The Flex team has clearly done their homework. Inspiration boards display bright Mediterranean frescos, white church spires, and pretty shades of Grecian blue. But what seems like a fresh, modern take on the chocolate brand feels off-base to Zoe. “I don’t see that for our company. It reminds me of going to church,” she says, and in her laughter there is mockery.

“What’s the story to this? That we’re Greek?” (She has a point.)

Marcus is shocked by her reaction, and discouraged that she saw nothing worth pursuing in the Flex watch pitch.

Reorganizing, Renovating and Adding Final Touches…Above Deck

Marcus inspects the back office and finds that Zoe’s brother has failed pretty spectacularly at his reorganization tasks. Things aren’t clean, papers are still stacked in messy piles, no real systems have been put in place. The only way to get it done, Marcus realizes, is to start doing it himself and pray that the family picks up no his clues.

Marcus takes Zoe’s brother on a tour of Joe’s Stone Crab so he can see, firsthand, how a first-rate company sets up its shipping department and stays organized through every step of production. As the second-largest restaurant in the United States, it has a phenomenal shipping department and world-class organization — two things Zoe’s Chocolates could use in spades.

New customer seating, brightly lit candy displays, a beautiful dynamic color scheme, a new logo (featuring pretty blue and pink Grecian colors), and family photos on the walls complete the renovation in the retail space.

The finishing touch? A trip to Miami, where Zoe’s Chocolates will pitch themselves as the new gourmet chocolate aboard Norwegian Cruise Lines around the world.

When NCL finds out that Zoe’s largest order is only 7,000 chocolate bars – the equivalent of just two ships’ demand – they grow weary of committing to anything on paper. Still, the chocolatiers walk away with a handshake and a chance to design a program for the cruise line in the future.

Zoes Chocolate The Profit 300x300 - Zoe's Chocolate: The Profit Updates in 2020

Where Are They Now? Life After The Profit

The re-branding done for this episode was one of the most successful in the show’s history. Zoe’s Chocolates was able to recover from the brink of bankruptcy, stabilize revenue, and eventually open a second location in Frederick, Maryland.

In November of 2019 the chocolate company hosted a Women for Shepherd community event in their home town of Waynesboro, where they handed out delicious samples and led attendees through a brief educational presentation on the chocolatier process.

Their website is sleek, fresh and active, with links for corporate and wholesale purchasing. On Instagram, Zoe’s Chocolates boasts more than 4,200 followers and tons of yummy pictures. (The elegant design and artisan craftsmanship of Zoe’s Chocolates lends itself perfectly to food-obsessed Instagram fans.)

For now, it seems, life can sometimes be sweeter than chocolate.

Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Zoe’s Chocolate, The Profit, or any of its subsidiaries.

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