By Sam Bradley • December 11, 2024 •
Ivy Liu
Premium chocolate brand Tony’s Chocolonely harbors grand hopes.
For the last 19 years, the Dutch chocolate-maker has grown gradually, utilizing bright packaging and an anti-exploitation narrative to establish itself as the thoughtful shopper’s chocolate of choice. It’s been active in the U.S. since 2015, and in sweet-toothed European markets such as the U.K. and Germany since 2019.
Its CMO, former PepsiCo marketer Sadira Furlow has the task of building on recent commercial momentum while shepherding a smaller media budget than competitors such as Hershey or Cadbury’s. Her plan – which focuses on paid social activity and retail media – offers a contemporary playbook for smaller brands looking to grow rapidly in tough markets.
Global revenues in 2022-23 increased to €150.2 million ($158.49 million) in revenue, up 23.2% on the previous year’s €121.9 million ($128.63 million), according to its latest annual report. It’s now the fourth-most popular chocolate in Britain, according to Nielsen, and it holds an estimated 4.5% U.S. market share in the premium chocolate category, up from 2.7% in 2021-22 and 1.5% in 2019-2020.
Furlow said the brand “started to hit accelerated momentum,” following its debut in Walmart this year; the brand was already available in Whole Foods, Target, CVS and Safeway.
‘Surgical and precise’
Furlow, who did not share precise details of the brand’s media budget, estimated that Tony’s Chocolonely’s CPG rivals typically spent between nine and 15% of their net revenue on marketing.
By contrast, she said, Tony’s only spent 2-3% of its net revenues on marketing (given the company’s 2023 net revenue of $158 million, that translates to an approximate budget of $3.1-$4.7 million). She said the firm had to be “surgical and precise” with its media investments.
“I won’t be able to outspend the share leaders. I can’t afford to do that,” Furlow said. “Punching above our weight,” she added, was “a great source of pride” to the CMO and her team.
Tony’s Chocolonely previously leaned heavily on organic social activity on Facebook and Instagram. But, Furlow noted, the channel doesn’t easily scale and her team is reviewing its approach. “Social, for sure, will be a part of [the media mix]… how we show up on social in what ways, I think is still TBD.” Its paid social approach focused principally on Facebook and Meta, as well as YouTube, a spokesperson for the company said in a follow-up email, without providing a precise breakdown.
The company had “dibbled and dabbed” in retail media previously but following its appointment of Total Mediaplus as global agency-of-record in October, Furlow expects to step up its usage of the channel.
The company already makes use of Walmart and Target’s ad inventory while its work with Kroger is at a more nascent stage, she said, without providing a precise breakdown.
“There’s an abundance of places to go… [but] retail media networks stand out. Their ability to help you in the lower funnel is quite impressive,” she said.
Blended approach
Total Mediaplus, the media arm of German agency network Serviceplan, was tapped to develop those retail media plans as its global agency partner. The agency’s CEO Tom Laranjo noted that retail media could suit brands such as Tony’s Chocolonely because customers frequently buy chocolate on impulse.
Used correctly, retail media ads could increase the chance a customer would add a bar of Tony’s Chocolonely to their online shopping basket in the same way a traditional point-of-sale installation in a store would, said Laranjo.
As such, he expected the brand to build on previous inroads and increase their spend on Target, Walmart and Kroger. “They’ll want to have a higher level of penetration across those three… it will be a significant investment,” Laranjo said, without naming a specific figure.
Zach Ricchiuti, associate vp of client solutions, at media agency Kepler, said it was a “sound” approach for a company in Tony’s position. “Chocolate is a natural kind of add-on to a grocery basket. It’s easy, impulsive… those tend to be products that do very, very well in retail media,” he said.
Focusing on both paid social and retail media – Laranjo said he expected TikTok to be the priority platform – and would help increase the brand’s U.S. bridgehead, despite the increasingly shaky status of the platform’s American business.
“They are in a fantastic place, but I think that they know, if they want to grow even further…retail media and social media is a great way to do that,” he said.
Beyond chocolate
This approach isn’t limited to confectionery. Tim Hurd, vp of media at Goodway Group, said his agency’s clients were utilizing a similar combined approach to that of Tony’s Chocolonely.
One Goodway client – a brand in the dairy sector with a media budget in the low millions of dollars, which he declined to name – had begun using paid social channels to for higher-funnel messaging, paired with performance-oriented retail media activity. “The combination works really well,” he said.
Though retail media spending as a whole is rising rapidly, marketers haven’t yet found the channel of great use for growing brand awareness.
Furlow said she wasn’t planning to depend wholly on the channel. Ultimately, her brand’s ethical positioning and creative activity were its “biggest competitive advantage,” she said.
“Our mission is our mission… using media is in service of that,” she concluded.
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