The failure rate of businesses is horrific, so it’s refreshing to hear a small business success story from time to time.
Philip Ashley Chocolates’ Small Business Success Story
“Every chocolate has a name – little novellas in each piece. It’s one way I write and the ink is chocolate”
What would you do if Burson Marsteller called you to interview Philip Ashley Rix, master chocolatier and owner of Philip Ashley Chocolates? You’d jump on the opportunity to hear his story!
And as romantic as this all sounds, it’s no joke building a brand, growing buzz, attracting paying customers and managing expenses so the business can thrive.
Flavors Philip Ashley Chocolates engineers “little novellas”, history and romance in every bite. This is not your grandmas box of Valentine’s Day chocolates.
Hand crafted flavors include blueberry, balsamic vinegar and black pepper truffle mixed together in one luscious bite. Or how about Thai, lemongrass, and mint for a not too sweet palate cleanser?
He’s also not afraid to blend sweet and savory; unusual pairings that surprise and delight his customers like Capricho be cabra (goat cheese) with fig jam and port wine. I can’t even imagine how scrumptious that one must be.
The biggest mistake I made was not eating lunch before this interview.
Here’s Phillip’s Small Business Success Story
How did you get into this business and what experience helped you along the way?
I was into the culinary scene. I cooked all the time. I was the guy in college who cooked coq au vin for my frat brothers. I grew up around entrepreneurs. My uncle owned a graphic design firm. My dad was a contractor.
After working for FedEx and Apple in sales or service, I learned a lot about speaking to customers, solving problems and building relationships. That experience has served me well as a business owner.
In fact, FedEx could easily have been a career. Years ago, I just knew I knew I was born to build a business on my own that tapped into the cool culinary scene.
I started thinking about chocolate; even had a dream about it. How cool would it be to be a chocolatier?
There are many chocolate makers on the market, I didn’t want to be one of many. I wanted build my reputation as an expert. It was important the chocolate connoisseurs knew “this guy knows what he’s talking about”.
So I set out to find the traditional path to understanding chocolate’s origins, its historical significance to its basic molecular structure. I started researching. I didn’t want to invest big money before I knew this craft well.
This started as an idea that became an obsession.
I put together the history, chemistry and artistry of chocolate. I call it “Choc-history” which includes the science of chocolate. The first three years of this journey, I studied the history- where and how it was first grown to understanding what beta crystals mean.
Then the challenge became translating what I learned into a hand crafted product that could be engineered.
Nowadays people are doing all kinds of things with food. The biggest question in my mind was, “Why isn’t anyone doing anything outrageous with chocolate? Blend a good bit of savory. Even the sweet ones aren’t too sweet. Here’s our chance to use chocolate as our canvas.”
What makes Philip Ashley Chocolates stand out in a crowded marketplace?
Our chocolates not only tell stories, they are like little jewels. Every flavor has progeny from the finest ingredients we source from around the globe.
We have intimate gatherings at the store, invitation only, to introduce new flavors that pair well with tequila and beautiful wines to enhance the flavor on the tongue.
Every chocolate is made in small batches and we don’t offer all of our 200 flavors at the same time. The flavors follow the seasons when the core ingredients are at their peak. We don’t believe chocolate should be sickening sweet.
The high quality of our chocolate and the richness of our ingredients’ aroma and texture carry the natural sweetness and depth we’re looking to achieve. We have a high “surprise and delight” factor that makes our company’s product stand out. Our flavors and layers are like constructing a dish that hits all senses.
We did a lot of research on competitors and also thinking ahead five years about what trends are emerging and what trends we can lead. I always ask, “where’s food going; where’s chocolate going; how can we keep on our toes?”
We want to entice people to come back to experience the excitement of trying something they never taste anywhere else. We’ve even been able to convert non-chocolate lovers into Philip Ashley fanatics.
Describe your customer and what motivates them to buy?
Our clients are predominantly female in the 25-55 age group. They earn over forty thousand dollars a year or higher and are moderately to well-traveled. They are sophisticated people who appreciate creativity and quality.
They typically work in a professional capacity and see the chocolate artistry we create as an approachable luxury.
Our customers will send out gifts to corporate clients or gifts to special friends or loved ones during peak seasons. Now we have gifts for every month and season.
FedEx has done an amazing job developing unique packaging for us to the product arrives at the destination as perfectly as when it left our shop. That’s no small feat when you’re shipping cross country in the hot summer!
We also have men that buy from us. They are buying for clients or a woman who loves our chocolates or for a girlfriend or clients he wants to impress.
Our repeat customers are women who come in two three times a week. We are attracting a lot more millennials in their early twenties; the ones really into edgy and cool new trends who have a little more discretionary income.
How did you get the word out initially that these hand-crafted artisan chocolates were available?
At first I started doing trunk shows to generate revenues and build buzz. We told the story every time. We did pop up shops in bank lobbies, at bridal showers and ask high profile buildings if we could set up a stand to test our product.
We also tested product at charitable events. We knew everyone would like it when it was free- but the big question always is- will they pay money for this and will they buy ten times a year not just once?
We invested a solid two years building the brand, testing product and building strategic partnerships. It’s an 18 hour a day job. And when the problems come, and they always do, you’re the owner, you signed up for it.
What are some milestones you’ve reached with Philip Ashley Chocolates?
We’ve had some amazing successes. Neiman Marcus now carries our line. That provides an aura about what we do. We were featured at the Grammy Awards and the Oscars so our star has risen dramatically in the last year.
We’re recognized in discerning circles. It’s evidence that we’re doing something very special and that fuels our creativity even more.
What sacrifices have you made to launch this small business and grow profits?
No one tells you about the long hard nights or the cash crunch that always comes when you expand. At every growth inflection point, there are more responsibilities to take on and you have to be ready.
You have to better than anyone in the company on dealing with stress, taking on risk and dealing with problems. In 2013 we opened the store. It’s doing well. We brought on a few partners to help with the visual marketing and with our online presence.
The marketing is very expensive, but it’s the most important part of what we do. Our Instagram presence really showcases who we are, our visually gorgeous product line and where we’ve been featured. Follow us there and you’ll see our famous fans too.
Looking back, what would you do differently?
I would have approached cash flow more differently. As much as I wanted to hire great people and pay them great wages, the business has to dictate that. It’s also important that everyone who is working in the business has clear goals and contributes every day they show up.
I would have been more structured and more mindful of when to hire new people and how to manage their efforts.
I’d also be more judicious of how I invested marketing dollars. It’s one of the biggest expenses when you’re launching a product and a concept that is unknown and new to the market.
One of the most expensive things in the world is to educate the market. Looking back, there are ways we could have eliminated some of the learning curve. You never know what’s going to catch on until you test it.
What are the benefits and challenges of selling retail and running a store?
We opened the store in 2013. It’s more work than anyone will tell you! It does provide a way that clients can find us when it’s convenient for them.
It’s also hard to find people who are as dedicated to the business. There’s high turnover when you own a retail store.
My goal was to generate good paying jobs but the cash has to be there. Jobs are created because we’re doing a great job serving customers who become big fans and tell all their friends about us. While the fixed expenses can be high when you build out a retail space, it does enable you to sell directly to the customer.
There’s no substitute for face to face relationship building. It also allows the business to capture all the gross margin which the owners can plow back into improving the business operations, new product development and online promotion.
The store helps reinforce our brand. In order to invest time in new product development, research and promotion, we scaled back retail store hours. We’re only open to public Thursdays, Fridays and Saturdays. By only offering seasonal flavors which are available a few days a week, we create a sense of urgency and scarcity.
We look like a specialty jewelry store. We can create an atmosphere and a customer experience that is hard to replicate without a physical space and location. We are a luxury boutique.
What is FedEx’s role in your business and how has it accelerated revenue growth for you?
FedEx has been a very important strategic partner for us. Our product is hand-crafted and very delicate. We ship all over the world. There’s a lot of risk to product integrity with all the transfers that need to happen to get the product from our kitchens to the final customer.
There are so many variables we have no control over, like temperature. Our products need to survive extremes in the hot summer, in the belly of an airplane or sitting on a truck waiting for delivery.
FedEx has an amazing research and development lab. They are experts in developing packaging that can survive the trip and protect the product so it arrives in perfect condition no matter what.
They developed packaging specifically for us and that’s been key to our success. That packaging enables us to reach new customers beyond our local presence in Memphis.
It’s also been tremendous to do business in the same neighborhood where FedEx has their corporate offices. That has also given us a geographic advantage. Even after normal pick up hours, we can drop off our packages at FedEx with confident knowing when the customer calls, it will be to tell us the product is divine, not that it had problems in the shipping process.
FedEx is best in the world at this and they’ve been instrumental in helping us grow our client base, revenues and profitability because of it.
We’re always on the cutting edge of what’s happening in the culinary world. We’re always exploring unique flavors and combinations to surprise our clientele, maintain our cutting edge reputation and to continue to build on the excitement of the next new design so customers come back.
Building our online presence is crucial and we see it as our primary growth market. When we make a sale online, the business captures the same margin as if you had come into the store to purchase.
Online promotion helps to broaden awareness for prospective customers too. It provides multimedia opportunities to tell our story and the story of every hand-crafted chocolate we offer. Eventually, we are projecting online sales to generate more than half of our total revenues.
From operations standpoint- grow our online presence
How do you rise above the competition?
Our time in business and our creativity in developing new flavors all the time helps distinguish us from our competitors. We are very agile. In fact, we just developed a chocolate that includes almond butter and wild honey.
Another new flavor is amazing. It pairs the sweetness of white balsamic vinegar with the most exquisite extra virgin olive oil in the world; Picual. When I first tested and tasted it, I went crazy! It’s better than I even imagined.
We’re always looking for ways to excite the palate. And we also offer a much broader portfolio of flavors than our competitors do. We also offer seasonal flavors like ginger jam. Once the short season is over, they’re gone.
What other hurdles did you need to jump to get to this point?
We needed to do a lot of legal and logistics research to learn what we would need to service customers and deliver perfect product to customers. I never wanted Phillip Ashley Chocolate limited to a local chocolate shop. I also wanted the business to run full throttle twelve months out of the year.
That means shipping product that melts and cracks easily during July and August to places like Los Angeles! We needed a carrier that could get our delicate product anywhere at any time and keep it cool in the process.
It also had to be a package that didn’t compromise our brand image. Answering questions like, what do we put the product in? How do we wrap it so the customer is delighted when it’s opened?
FedEx packaging guarantees the chocolates arrive as beautiful as when they left our shop. Now, we’re able to ship to Redmond Washington in two days.
What advice would you give for those who are in the dream stage of creating their own small business success?
Know the difference between what you’re good at and passionate about. They’re not always the same thing. You may have to hire someone to do the work that you’re not good at but that is necessary to the success of the business. That’s where your invested capital should go.
You need to love to connect with people. They will feel your enthusiasm and it’s infectious. Chocolate gave me the medium. Every single day, I love what I do more and more. If you’re not feeling that, don’t start and don’t scale.
Growing pains are real and you’ll have greater responsibility and risk as every growth point. Remember this is what you signed up for. You have to be able to take on more stress than the average person.
No one ever tells you that! With success remain accessible remain humble- at any moment it can go the other way.
When the successes do come, I never get comfortable rest on my laurels. And while I totally appreciate accolades – I try not to let it blind side me. I’m always in learning mode and I think every entrepreneur has to be.
Technology is always changing. The economy is always dynamic. Your customer base is always changing. You have to keep your ears and eyes open to these changes because they will provide risks and opportunities for your business.
I have developed and entrepreneurs masterclass for this reason. FedEx is a big supporter of this effort. On it you’ll find subject matter experts who will help you get up that learning curve superfast. I wish I had this before I started!
It will help you answer questions like; how am I branding? Is my scale manageable? How do I get investors?
You can find these answers at www.entrepreneurshipmasterclass.com.
Last, make sure you’re surrounded by mentors and experts who believe in you and your mission. FedEx has been one of those suppliers without whom I wouldn’t have gotten this far this quickly.
We hope this story inspires you.
My thanks to Phillip Ashley Rix, Becky Huling and Gretchen Mathis of FedEx and Kathryn Harrison of Burson Marsteller for this marvelous introduction.
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