The Entrepreneurs Aiming To Make Chocolate The New Coffee

L-R Jens Knoop and William Gordon-Harris
Brands are often born with the potential for global success, but for some, it takes a moment of serendipity to make it happen. Jens Knoop's passion for chocolate began as a child in his native Germany. In 2013, he decided to share his passion and opened his eponymous specialist hot chocolate store, Knoops, in Rye, East Sussex.
He spent the next five years focused on making that perfect chocolate drink for every person who walked through the door. The store's customer base was growing rapidly, and although fully aware of the brand's potential for growth, Knoop lacked the time to pursue it. He was on a mission to make every customer happy.
Then, in 2018, investor and serial entrepreneur William Gordon Harris walked into the store with his young children. After trying a hot chocolate and witnessing the store's popularity, he knew that Knoop had created something quite extraordinary.
'There were 21 of the finest, sustainably sourced chocolates on the menu, all very different flavors, from the very sweet 28% to the very, very dark 100%; something for everyone,' he says. 'Jens had understood that, while coffee is addiction, chocolate is love, and this is a powerful and totally different concept. So, I was wondering, if this is so popular in Rye, what would it do elsewhere?'
Convinced of Knoop's scalability he came up with an investment strategy and a proposal for a partnership with Knoop who was only too happy to accept. 'I knew the business had potential, but I was too focused on the customer in front of me,' says Knoop. 'I needed a partner who understood the concept, who had the drive, the know-how, and the future vision and who could connect us to the right people. In William, I had the perfect partner.'
Seven years on from that serendipitous meeting Knoops has established 27 stores in the U.K., with three new openings planned for every month. Significantly, revenue at the Rye store has increased fivefold since 2019.
Last year the brand began its global expansion, opening its first Middle Eastern store in the UAE in November, with a third due to open this summer. Later this year Knoops will launch in China via a joint venture partnership starting in Beijing. Crucially, Knoops is also making its U.S. debut, not in a major city, but in Utah, as a wholly owned subsidiary staffed by local teams on the ground.
The goal is to open 30 new international stores annually, and driving the brand's ambitious expansion plan is a high-profile leadership team with a vast cumulative experience in successfully scaling global brands across retail and food and beverage, including Lush founder Andrew Gerrie as chairman and NED, and Pret A Manger and Asian-inspired food brand itsu founder Julian Metcalfe as NED.
Gerrie says: 'It's very rare to see an opportunity of the size and scale that Knoops has to define the chocolate drinks category. Combined with William's vision and drive, I believe it is possible to build a once-in-a-generation brand.'
Barista-quality hot chocolate
The founder, meanwhile, became the 'sommelier', travelling the world from Colombia to Venezuela, to source the best bean-to-cup chocolate. In doing so, his aim is to bridge the gap between cocoa farmers and customers, working directly with producers to make a genuine impact in their communities.
'We're supporting specific projects in countries such as Ghana, the Solomon Islands, and the Philippines,' says Knoop. 'It is a global reach of interesting flavor profiles that enables us to include the whole world in our menu.'
The chocolate make-at-home products that Knoop had sold from his Rye store have also been developed into a fast-growing retail division.
'The market is entirely ready for this,' says Gordon-Harris. 'Barista quality chocolate drinks, hot and cold, have been entirely forgotten by the coffee industry. Tablet chocolate has a saturation level of 99% in U.K. homes; it is that ubiquitous. All we are doing is reawakening a very deep association with chocolate by elevating it to barista-level quality, just as coffee did.
And a key factor in the brand's growth is that alongside its specialist hot and iced chocolate, Knoops is also selling high-quality coffee, which previously represented 10% of sales.
'Knoops is picking up the coffee business through the lens of chocolate. The coffee industry has to pick up chocolate, but not through a lens of chocolate, because traditionally they have offered poor-quality chocolate,' says Gordon-Harris. 'The conclusion is that you pick up coffee to a level that allows you to essentially replace coffee shops. Look at Greg's and MacDonald's. They are two of the largest coffee sellers in the U.K., but that's not their core product, it's their outcome.'
While the front end of the business encapsulates the consumer's desire for an independent, bespoke chocolate drink, at the back end is a process-driven business that can be scaled to hundreds of stores very quickly. Revenue from stores, wholesale and DTC is on track to exceed $20 million this year.
NED Julian Metcalfe says: 'Knoops is a pioneering, confident brand with a sense of purpose and a passion for quality. They don't come around that often and I applaud their leadership and vision. I am hugely excited to be part of this story.'
For Knoop himself, there is a huge amount of pride in how far his lifelong passion for chocolate has come, yet the brand's birthplace, the Rye store, is never far from his mind. He says: 'We've had a loyal following since we first opened. It's a wonderful store, now known as the 'mothership'. That following is growing, with many Knoops fans making a pilgrimage to Rye and pursuing a goal of visiting every single U.K. store.'
How big can the brand grow? With the ongoing organic growth of coffee sales, he confidently predicts at least 300 stores in the U.K. and 3,000 globally in the next decade.
He says: 'You only get one opportunity to do something like this. Luke Johnson did Pizza Express. He's tried to repeat that many times, but you're never going to do two Pizza Expresses. Achieving that Apple or Facebook phenomenon requires a coming together of the right people and the right timing. We have that. Chocolate represents love in a cup, and people are loving it.'

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