Melanie Cornwell, December 16, 2012
“Little was obvious at the beginning, but all was present in the DNA. We’re not inventing, as much as discovering what we were always meant to be.”
Twenty years ago, Louis Rossetto shook up the media world with the launch of tech culture Bible Wired, but it was just seven years ago that he found his true calling as co-founder of TCHO, a luxury chocolate maker in San Francisco. According to Rossetto, TCHO is where Silicon Valley start-up meets San Francisco food culture, marrying the relentless pursuit of innovation to the obsession with flavor and quality.
So far, so good… TCHO was named “Best Milk Chocolate Made in the Americas” at the International Chocolate Awards this fall, and the innovation mandate is manifest in everything from how the chocolate is developed, produced and packaged to how the cocoa beans are grown, fermented, roasted, and even to the unprecedented partnerships TCHO has formed with its growers.
Just last month, TCHO released its latest chocolate bar and its first ingrediated one. Called Mokaccino, it’s a rich milk chocolate and coffee confection that was co-created, like all TCHO bars, through TCHO’s unique Beta Taster program.
Much like with Wired, there’s a lot more to TCHO than innovative content and provocative packaging. Rossetto fills us in…
The LiP: What do you do?
LOUIS ROSSETTO: My business card says: “CEO and Creative Director.” But really, I’m the Chief Troublemaker. I ask uncomfortable questions. I lean people up against their comfort zones. I don’t accept conventional wisdom. I’m anti-PC. I fight inertia, change company directions. I push harder, want more, need faster. All the while, pointing at the horizon, urging everyone on against all odds. Oh, and I also supply will, perhaps the least appreciated yet most valuable attribute of a leader, and the one that hurts the most to supply.
The LiP: How did TCHO come up with its new Mokaccino bar?
LOUIS ROSSETTO: Customers were demanding that we introduce our first “ingrediated” bar — our first bar that wasn’t pure dark or milk chocolate — and we didn’t need to look further for inspiration than one of the best selling drinks in our Beta store cafe: Blue Bottle latte and our rich drinking chocolate. Sometimes, inspiration is right under your nose.
The LiP: Describe the process of “co-creating” this bar.
LOUIS ROSSETTO: From the beginning, TCHO has been about engaging our customer community in helping us co-create our products. Our first four dark chocolates were the result of what we call our “Beta” program, modeled, not surprisingly, given our background and location, on the software business, where working prototypes are distributed to users to bang on in real world situations and give feedback, which is incorporated into new updates until the final gold master is released.
Same here. We create two prototypes, we actually sell these “Beta” bars to consumers (no fake customer testing in mirrored rooms), and invite detailed quantitative and qualitative feedback, as well as force the Beta Taster to select which of the two bars survives as the basis for the next round. The winner is then iterated into a new family based on the feedback, and two new bars are put out to customers to again evaluate. Rinse and repeat until we have the perfect bars. For our first four bars, we created 1000 iterations over the course of a year until we had the perfect recipes and went “gold master.”
The LiP: What sort of technology was involved?
LOUIS ROSSETTO: This isn’t so much about technology, as it is about being congruent with the culture created by new media technology. We live in an era of social media and direct feedback. Co-creation is what we do every day when we tweet or use Facebook or blog — we co-create the media we all consume. We are incorporating this spirit of co-creation in making our products with our customers.
The LiP: What sort of innovation has TCHO introduced into the chocolate-making process?
LOUIS ROSSETTO: Innovation takes many forms — it’s not just about technology, it can also be about process.
Let’s look at the steps in making chocolate: one, you grow the cacao bean, then two, you ferment it; three, dry it; four, roast it; and finally five, refine it with sugar into couverture, which can then be molded and packaged into the delightful dose of happiness we eagerly consume. Guess what? Most companies, from the hottest little artisan startup to the biggest gargantuan mega multinational, begins making chocolate at — step four. Right, they literally start making their chocolate by buying bags of beans.
TCHO, on the other hand, partners directly with farmers, through our TCHOSource program, to engage in the first three steps in chocolate making that occur on the farm: to improve growing, fermentation, and drying to get the best possible beans — in much the same way that Napa Valley wine makers partner with their independent grape growers to get the best possible grapes. Focusing on improving cacao quality by partnering directly with growers is a major innovation for our business.
The LiP: What impact has TCHO had on the chocolate industry as a whole?
LOUIS ROSSETTO: That’s not for me to say. One of the things I’m proudest of is our work with farmers. One of the core principles of the company is to make a better world. And it’s not because we’re bleeding hearts, but because we’re selfish: if we want to leave a better world for our children, we need to do it ourselves, because in the 21st century that responsibility can no longer be subcontracted to government, NGOs, or supra-governmental institutions. For TCHO, that means going beyond just licensing logos from Fair Trade, but looking our partner farmers in the eye, shaking their hands, and working side-by-side with them, in a spirit of mutual self-interest, which is the true foundation of lasting change and sustainable development. We help to improve their practices in order for us to make better chocolate and so we can pay them more to help them earn a better living.
While it doesn’t sound like a big deal, partnering directly with farmers is not normal in the chocolate business. On the contrary, it is exceedingly rare. For TCHO, this partnership involves technology transfer to help improve genetic stock and organic growing methods, re-designing fermentation centers to improve quality, building solar dryers, and most importantly, installing Flavor Labs, the same kind we have back in San Francisco, to enable farmers to taste chocolate made from their cacao.
Unbelievably enough, the overwhelming majority of farmers have never tasted chocolate made from their own cacao. Why? Because until recently, cacao has been basically a commodity crop, for sale to large commodity companies like ADM or Mitsubishi, who, in turn, sell it to large food companies, who, in turn, make KitKats out of it. And since KitKat is basically caramelized milk and sugar with chocolate added as an afterthought, there has been little emphasis on quality throughout the supply chain.
So, I don’t know what impact TCHO has had on the chocolate business, but I’m proud that TCHOSource touches the life of 1000 farm families in six cooperatives in Peru and Ecuador, and that they have enabled us to create award-winning chocolates for our consumers. And I’m proud that TCHOSource is so unique, and so successful, it is now supported by USAID, and the World Cocoa Foundation has just funded the extension of the program to Ghana, the second largest producer.
The LiP: Why did you go into the chocolate business?
LOUIS ROSSETTO: Why did you last fall in love? Opportunity crossed your path, and irrational desire captured you. That’s a lot of life, probably the best and worst of life. But it also happens that you do your best work when you’re obsessed. And chocolate is a good thing to be obsessed about. It’s not just the food business. It’s the happiness business.
The LiP: In moving from concept to reality, what stayed true to your original vision? What has shifted?
LOUIS ROSSETTO: TCHO is about experience that delights, innovation in everything we do, and making a better world. This was core at the beginning, it’s core now, it will be core as long as I’m involved. The manifestations of that core grow and change. We started with four dark bars; we now have eight, five of which are dark, and in the coming year, we will expand that number to 14, the majority of which will not be dark. We have added drinking chocolate and baking drops for consumers. We have grown a significant professional business. We now have our own retail store with plans for more.
Little was obvious at the beginning, but all was present in the DNA. We’re not inventing, as much as discovering what we were always meant to be.
The LiP: What surprised you along the way?
LOUIS ROSSETTO: How hard the world of atoms is, after the world of bits. Bits are infinitely malleable. Atoms, they have minds of their own not easily bendable to the will of mortals.
The LiP: What has been the biggest challenge?
LOUIS ROSSETTO: How about surviving the financial fucking meltdown?
The LiP: What do starting/running Wired and TCHO have in common?
LOUIS ROSSETTO: It’s a cliché, but it’s all about people. Finding great people, empowering them, trusting them, inspiring them to do more than they ever thought they could . . .
The LiP: What are the biggest differences between the two?
LOUIS ROSSETTO: The distribution channels are just so much more complex than magazines. I think there were three or four national and maybe twenty regional distributors we had to pay attention to. And let’s not talk about the Internet, where we had access to the planet simply plugging a server into an ethernet outlet. In the food business, there are hundreds, if not thousands, of brokers, wholesalers, distributors, not to mention over 50,000 retail doors. As a result, gaining access to consumers is just a lot more difficult, and uptake and penetration take a lot longer.
The LiP: I would be remiss if I didn’t ask you about your design sensibility and how that influences the TCHO packaging:
LOUIS ROSSETTO: When I got involved with TCHO, I insisted that we eschew the faux-traditionalism which seems endemic to the chocolate business (Scharffen Berger, for example, which was founded in Berkeley in the 1990s, uses a mountain goat as its symbol and art nouveau typefaces), and instead embrace the modern. So everything we do at TCHO is about channeling the exquisite tension of Now.
And I have two things scrawled on our white board: “If it doesn’t have emotional punch, it ain’t worth shit.” Saul Bass said that. And the second: “What would Tibor do?” To remind me about the wry humor and intelligence that Tibor Kalman brought to all his work.
The LiP: What inspires you?
LOUIS ROSSETTO: The power of imagination. It’s actually the name of Jane’s and my family office: Força da Imaginaçao (Portuguese, and after a Beth Carvalho song). The power to imagine something, and then make it real out of nothing — it’s wondrous, it’s the essence of being human.
The LiP: What are you most proud of?
LOUIS ROSSETTO: Jane’s and my two kids — the ultimate startups. It’s really the only reason we’re on earth.
The LiP: Have there been any past unrealized projects that have recently become possible through new techniques and innovations?
LOUIS ROSSETTO: I think I’m going to keep that to myself for now.
The LiP: What does luxury mean to you?
LOUIS ROSSETTO: It doesn’t mean what it used to — all those past signifiers of luxury are really tired. To me, a luxury product or service embodies intelligence, great design, and experience that delights. But it’s more than that. It’s also the connection, through the product or service, to leaders, people who don’t just talk the talk but walk the walk of working directly to make a better world. It’s about being amazed by creators willing to accept the risk of failing in order to achieve greatness. And finally, maybe it’s about being able to tell a story to your friends where you’re the hero for having discovered this amazing thing you want to share with them.
The LiP: What’s your big-picture ambition with your work?
LOUIS ROSSETTO: It’s always the same: to make the next magazine/webpage/tweet/chocolate/fantasy better than the one you’ve just created.
The LiP: What is the most progressive idea/concept you have come across recently that you would like to see grow?
LOUIS ROSSETTO: Having had to raise money for two businesses, I really appreciate Kickstarter, and routing around the financial gatekeepers — the banks, finders, angels, VCs, investment bankers — and engaging customers in helping to fund great concepts.
Learn more about TCHO at: www.tcho.com.
Photos courtesy of Louis Rossetto.