Hard-Won Partnership Pays Off in Chocolates

Tom Buettgenbach, 36, grew up in Europe’s “Chocolate Belt” and immigrated to the United States 12 years ago to do a fellowship in physics and astronomy at Caltech. After a stint on the faculty, he went to work as a management consultant for McKinsey & Co. Two years ago, he and Eric Wierman, 31, decided to start their own chocolate company. But finding a manufacturer willing to take a risk on their start-up was a major hurdle, Buettgenbach said. He was interviewed by freelance writer Karen E. Klein.

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In today’s world, you just can’t build a little factory and make something. Most of the time you need to establish a partnership with a bigger player. Our Belgian Chocolate Keys were launched last May and they are selling at gourmet grocers like Bristol Farms and high-end department stores like Nordstrom. But it took us over a year to find a manufacturer capable of making the product and willing to partner with us.

We spent a lot of resources and time going to trade shows and talking to around 60 different manufacturers. We found that 58 of them promised us more than they were capable of doing. We had designed and test-marketed our product and we knew we wanted small pieces of chocolate that were individually gold-foil-wrapped. We learned that most manufacturers could not do that for us.

We narrowed our search and we began talking to a German company, Stollwerck. We knew they had the production capability we needed and we knew they were under-utilized on their production line. We talked to mid-level managers, vice presidents of production, vice presidents of sales, and we convinced them we had a great idea. But none of them had the decision-making authority to go ahead and say yes.

I realized if we were really going to do this, I had to find the owner. I couldn’t take “no” from the mid-level management for an answer. None of them were willing to take the risk, because if the company invested in us and our product went nowhere, it would be a big negative for their career.

People were excited by what we wanted to do, but they were not motivated to move forward because our project was not in their best interest.

Over the months, we traveled to the Stollwerck factory in Belgium and it got very costly and time-consuming. Finally, we had basically given up on them when I sent a personal fax to the owner of the company, Dr. Hans Imhoff.

I got the number for the fax machine right in his office and I told him I understood he had the equipment we needed. I understood it was not being fully utilized and said we were interested in purchasing it from him. Of course, we had no means to do that, but we figured it might get his attention.

Sure enough, he faxed us right back saying, “The equipment costs $25 million. It’s not for sale anyway, but I’d love to meet with you and see what we could do together.”

Well, we flew to Europe again and met with Dr. Imhoff and he saw what we were doing, appreciated how open we were, was impressed by the market research and product development we’d done and he decided to support us right there.

Those kinds of commitments are really not made on the merit of your product or your idea; they’re made on the basis of a personal relationship.

So my advice is that if there’s any way to get in touch with the owner directly, do it. And be honest about what you want. Tell them you’re a young entrepreneur; show them what you’ve accomplished and ask if you can get an hour of their time. They remember they were there once.

Don’t try to impress them by saying things like, “We’ll double your sales in five years.” They’ve heard that too many times before. Just ask for their help and you may find they’ll make an hour for you. Once you win the owner over, they can decide to help you and they can take the heat if your product doesn’t work out.

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AT A GLANCE

Company: J.S. Bach Classic Chocolates Inc.

Owners: Eric Wierman and Tom Buettgenbach

Nature of business: Manufacturer of gourmet chocolates

Location: 625 Fair Oaks Ave., Suite 290, South Pasadena

Year founded: 1996

Number of employees: 8

Projected 1998 revenue: $1.1 million

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Karen E. Klein will be featured at The Times’ Small Business Strategies Conference Oct. 17-18 at the Los Angeles Convention Center. If your business can provide a lesson to other entrepreneurs, contact Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or send e-mail to kklein6349@aol.com. Include your name, address and telephone number.