Premium chocolate maker Scharffen Berger has returned to private ownership after The Hershey Co. sold the brand for an undisclosed amount. Paul Cherrie, a longtime exec with The Topps Co. and Concord Confections, is leading the company as CEO.
Other candy veterans have joined Scharffen Berger's leadership ranks, including Master Chocolate Maker Ray Major and Engineers Wade Latz and Peter Lord, all from Hershey. Chris Spirko, who served as a financial officer with M&M Mars, is CFO. The brand and its manufacturing operations have relocated to a new facility in Ashland, Oregon, where it will be producing the company's first batch of chocolate this month.
Last April, Hershey announced it was selling Scharffen Berger and fellow artisan chocolate brand Dagoba to prioritize its spending on salty snacks and nutrition bars. Scharffen Berger is making its debut under new ownership as consumption of chocolate has increased during the pandemic, with premium chocolate brands proving especially popular.
Established in 1996 by winemaker John Scharffenberger and chocolate connosieur Robert Steinberg, Scharffen Berger considers itself a pioneer of the bean-to-bar craft chocolate movement. The brand aimed to meld the disciplines of winemaking and chocolate, putting an emphasis on the sourcing of its cacao and picking beans that bring complexity and balance. Scharffenberger is serving as an advisor to help guide the brand back to those roots.
Hershey acquired the company in 2005. Best known for its mainstream chocolate brands, the candy giant's customer base was always much broader than an artisan brand like Scharffen Berger.
"These are great brands that continue to resonate with consumers, but they require a different go to market model that we believe is better supported by other owners," Hershey CEO Michele Buck told analysts during the company's first-quarter 2020 earnings call, after announcing plans to sell Scharffen Berger, Dagoba and jerky brand Krave.
Now that it is back under private ownership, Scharffen Berger will be able to refocus on its artisan origins and target demographic. The brand is starting a new chapter with seasoned leadership at the helm, which will undoubtedly prove helpful as Scharffen Berger navigates the increasingly crowded and diversified chocolate space.
With the pandemic spurring consumer curiosity around clean label, functional ingredients, sustainability and better-for-you foods, chocolate makers have been adding a variety of label claims to their confections in an effort to woo consumers. On its own as a privately held company, Scharffen Berger will face competition from scores of brands in both the artisan and mainstream segments.
This includes premium baking chocolate brands Guittard, Valrhona and Ghirardelli, as well as artisan labels Chocolove, Theo and Dagoba. Hu, which was acquired earlier this year by Mondelez, is another player in the premium space with its paleo diet-friendly, gluten free, organic and vegan confections.
In the mainstream, Hershey has doubled down on its low- and no-sugar options to capture consumers’ growing desire to control their sugar intake. It also recently acquired premium low-sugar candy maker Lily’s and launched organic and bite-sized options to tap into demand in the better-for-you category.
Beyond its connection to the art of winemaking, there are a few areas where Scharffen Berger can stand out. It already has a leg up as an artisanal chocolate maker with a range of fine baking and tasting chocolate bars and pieces, and cocoa powder, in formulations varying from 41% to 99% cacao. The brand also sources its cacao from Rainforest Alliance Certified farms, giving it a sustainability edge at a time when the wider cocoa industry has come under criticism for its labor and environmental practices.