A Foothold on the British Market
Within five years the Dutch social activist start-up Tony’s Chocolonely grew to be a major player on the local market for chocolate. Promoting the fight against slavery on cocoa plantations in West Africa as its sole reason for being, the company conquered a 20% market share for chocolate in the Netherlands. In 2018 Tony’s set its sights on the United Kingdom, one of the biggest chocolate markets in Europe and home to Cadbury’s. Unlike many other companies, Tony’s did not send a trusted Dutch employee to the other side of the North Sea to establish a foothold in the land of after-dinner mints. They hired an Englishman, Ben Greensmith.
Rather read the article in Dutch? Go to the Dutch version: Een bruggenhoofd op de Britse markt
8 kilos of chocolate
42-year-old Ben whose extensive experience in the food and beverage industry includes eight years as a senior manager for innocent drinks now proudly carries the title of Lord Chocolonely III, which perfectly fits Tony’s playful business culture. What he brought with him was an in-depth knowledge of the British market, its regulations and its idiosyncrasies, including the prospect of Brexit which was looming over the project from the beginning. Ben continues: “Some people said we were crazy to start this business right before Brexit was originally due to happen, but the appeal of the British market and making an impact in the UK was too strong. The British are amongst the biggest chocolate consumers in the world. We consume, on average, 8 kilos per person per year."
Most entrepreneurs who expand their business abroad either set up a branch themselves, or send someone out to do the work. But doing what most people do is not standard for Tony’s Chocolonely. After all, the company was founded in 2005 by a journalist, Teun (Tony) van der Keuken, who knew more about the fate of enslaved people in West Africa than he did about chocolate. And the wayward company itself was more about making a statement than making chocolate bars. And that translates into everything they do, including dividing the bars into uneven sections, because ‘the world of cocoa isn’t fair either, is it?’
‘In the UK, we consume on average 8 kilos of chocolate per year’
Where Dutch entrepreneurs experience all kinds of problems when they set up shop abroad, Ben never did. Nor did he run into misunderstandings, cultural or otherwise, with his employers in the Netherlands. “Those guys knew what they wanted. And don’t forget that we are only 45 minutes away from each other and the time difference is only one hour.”
Ben is convinced that it would have been much more difficult for a Dutchman to navigate his way into the British market. “You have to know the regulations, the structure, find people and partners to work with.” In short, everything that NLinBusiness and the NL Business Hub in London, the Netherlands British Chamber of Commerce (NBCC) offers support with to Dutch entrepreneurs trying to start a business abroad.
In fact, Tony's Chocolonely is a member of the NBCC too. "The NBCC helped Tony's with valuable input for our launch plan: contacts of UK retailers, information on the chocolate market, market trends and requirements and possible scenarios of Brexit."
Armed with his experience in British retail, Greensmith helped set up the local company, recruited his team and secured the distribution network and strategy in the UK. The entire operation was self-financed. “We had no involvement with external investors of banks." In fact, the only possible hurdle was Brexit, which seemed imminent at the moment when Tony’s opened shop in Britain. The fact that it would be postponed and postponed again, and again, gave the company a good practice-run for 2021, when the split will finally happen. I
“We buy our cocoa in West-Africa, which is the main market for cocoa. It is then shipped to Belgium where the chocolate is produced. We import it from the Netherlands. We do not have local production here in the UK”, said Greensmith.
What is unclear at the moment is what will happen when the current transition period after Britain’s official departure from the European Union ends on December 31, 2020. The EU and the UK aim to reach agreement on a new trade agreement before that date. If they don’t, all trade between Great Britain and the European single market will be governed by the regulations of the World Trade Organisation.
These are uncharted waters for Ben too. “There may be unexpected delays in customs and new administrative hurdles that will hamper our work,” he says. Ben will do this year what he already did a couple of times before: make sure that he is completely stocked up before the day when customs officers will once again be supervising the loading and unloading of the North Sea Ferries.
Tony’s Chocolonely is ready to repeat its expansionist exercise. Working with a local manager in the UK was a success because of the short distance and the ease of communication. Tony’s now has a vacancy for a country manager in a second neighboring country, which not surprisingly is another giant on the European market for chocolate: Germany. Germany, even closer than the UK, is already the Netherlands’ largest trading partner, and the chance that it will leave the European Union is zero. The only potential obstacle can be the communication between the Dutch head office and the German management.
Good business management abroad requires a perfect mutual understanding, both literally and culturally. But the Dutch generally do not speak German very well. And Germans who speak Dutch are rare. To avoid that hurdle, Tony’s has added an extra requirement to the profile for the country manager: Wanted is a German who is fluent in English.
Starting a business in the UK?
Are you considering to expand your business abroad, but having trouble finding the right contacts? NLinBusiness and the NL Business Hub, the Netherlands-British Chamber of Commerce, are here to help you. Fill out the contact form and we will contact you as soon as possible.