Soon after Nurtac Afridi became CEO of Godiva in December 2020, she made a wide-ranging and somewhat surprising change in the way the 96-year-old company was run.
The Belgian chocolatier whose name is synonymous with premium sweets announced last January that it was closing all 128 of its North American boutiques, the retail stores that sold its chocolates. These boutiques, many of which were located in shopping malls across the United States, were once havens for shoppers to indulge in fancy treats and to pick up gifts.
The decision was also an abrupt change in direction for the confectioner.Just two years earlier under Afridi's predecessor, former CEO Annie Young-Scrivner, Godiva's key strategy was a massive expansion into cafes. In April 2019, Young-Scrivner announced plans to open 2,000 Godiva cafes worldwide — with more than 600 in the U.S.—serving pastries, coffee and tea and grab-and-go sandwiches.
The COVID-19 pandemic, coupled with consumer behavior changes, made Afridi re-evaluate the company's strategy. Godiva, she said, is always observing how consumers behave and interact with the company.
"What we saw was the consumers' consumption preferences changed," Afridi said. "In addition to rewarding [and]gifting others, they want to reward themselves, too. They have more interest in self reward, self care,and we think they want to find a premium chocolate.If they want to consume a chocolate, why shouldn't they consume the best chocolate?So we wanted to make it more available, and to speak to more consumption purposes."
So Afridi did just that: She closed the gilded stores and expanded Godiva's presence everywhere. Godiva's e-commerce got an overhaul. And the candies that were once available in fancy boutiques under glass cases are now on display at more than 90,000 U.S. retail outlets, including department stores, supermarkets and drug stores.
The strategy appears to have paid off so far. In December, Afridi said Godiva's business had grown by 37% in one year. For the holiday season, which normally makes up about 30% of the confectioner's total business, sales were up 50%.
Listening to consumers
While a Godiva-themed cafe seems like a fun idea, and the lovely boutiques seemed like places of permissive indulgence, consumer behavior told a different story of where and how people wanted to buy the company's chocolate.
Afridi said Godiva, owned by Turkish food conglomerate Yildiz Holding,had been watching online grocery shopping grow in popularity before the pandemic, when it became even more common.And a majority of consumers who started shopping for groceries online have said they'd be interested in continuing it after the pandemic subsides.
Following those cues, Godiva enhanced its online business. Afridi said the company revamped both its e-commerce site, then worked with its wholesale partners online and other e-commerce channels through which Godiva was sold. The company also invested in digital communication channels, including social media platforms.
The push seems to have worked. Afridi said online business in 2021 increased by 31%.
Godiva also paid a lot of attention to how and why consumers were seeking premium chocolate. Self-treating — especially during the pandemic — and sharing individual chocolates with others became bigger drivers than lovely boxes of chocolate pieces or fancy confections, Afridi said. This led to creating smaller and less expensive packages of chocolates, enough for a person to enjoy in one sitting. But the company also started producing larger packages of individually wrapped Masterpieces — Godiva's most iconic filled and truffle-style chocolates — to make for easy sharing. Afridi said that the more traditional boxes of pricier chocolates are still available online as well.
"This enables us to have a wider portfolio," Afridi said. "You can find Godiva for $2, but also for $200."
Breaking down the barrier between ordinary consumers and premium chocolate has also helped. Afridi said that in all of the consumer research Godiva does, everyone gets excited about the chocolate brand.And moving the chocolate from the boutique into the grocery store makes it that much more accessible.
"Why not take it to everyone so that everyone can consume it?" Afridi asked. "And now everybody can find a Godiva for themselves."
Godiva is also branching out into more products through licensing agreements. Earlier this year, the confectioner announced partnerships for premium branded products with Boardwalk Frozen Treats, Jimmy's Gourmet Bakery and Cookies United. Through these agreements, Godiva's chocolate will be in seven new ice cream pints, a bake-at-home chocolate chip cookie dough filled with chocolate ganache, and kits for gingerbread houses and cookie decorating. During the 2021 holiday season, Godiva announced a partnership with Canadian bakery Jessica Pastries. The confectioner also has partnerships with The Cheesecake Factory, which serves Godiva desserts on its menus,and General Mills, which has Godiva baking mixes.
The premium chocolatier is also associating itself with more sparkle, through a partnership with jeweler Le Vian, which has a Godiva-branded line of Valentine's Day jewelry made with brown-hued chocolate diamonds.
Despite the more common places that Godiva chocolates are now readily found, Afridi said the company's prestige is not taking a hit. What makes Godiva known as such a premium confection is its high-quality ingredients and detailed production process,she said, and has nothing to do with where it is found. And, she added, the premium chocolate category posted a 16% growth rate, higher than the 10% growth the entire chocolate category is seeing.
Bringing it to the people even more
Afridi's future plans for Godiva center on making it an even more consumer-accessible brand. The confectioner wants to continue to focus on the people who enjoy it and expanding its accessibility worldwide.
Godiva's chocolates will also see some more innovation, Afridi said. This will come through newly developed and licensed Godiva-branded products to address where and when people want to eat chocolate. But, she said, the company will also be working to formulate chocolate for consumers with different dietary preferences.Telling consumers more about Godiva is also a new focus for the brand, Afridi said. In the last year, Godiva's ad campaign has highlighted both the increased access to the chocolates and the artistry and craft that goes into making them.
Godiva will also be beefing up its business behind the scenes, Afridi said. The company aims to strengthen its supply chain worldwide, working to ensure stronger expansions and forging partnerships with more local partners.
Afridi said the direction Godiva has taken in the past year is the right one, and is the way the company will continue.
"The expansion of our channels, increasing the variety of our portfolio, expansion of our portfolio, interacting more with our consumers and investing in our people —they would have happened regardless of the pandemic because they are the results of the strategies that are based on our observation of our consumer changes in shopper habits." Afridi said.
