Sweeter Times for Chocolate Firm After Downturn

In 2001, a weakened economy damaged more than just the hospitality industry. A number of companies that count hotels as their clients, including Chocolates a la Carte, were dealt significant losses as well. Customized-chocolate maker Chocolates a la Carte, founded by Rena Pocrass in 1986, moved into a larger facility in Valencia expecting that its business would be on track to double. Terrorist attacks sent revenues down as its hotel, cruise line and catering customers cut back after suffering their own losses. “I think 9/11 was a very tough thing for us,” said Michael Pocrass, the company’s chief financial officer. “Ninety percent of our market was the hospitality industry, and most of the hotels, country clubs and things of that nature got hit very hard, and even today that hasn’t fully rebounded. In terms of conventions and banquet business, we were forced to look at business risks that we were facing in the market place. Ultimately, we diversified into different market places.” At the same time, skyrocketing workers’ compensation premiums hit at half a million dollars, up from $250,000. After digging in for a few years, however, Pocrass says the company has found new life. “I’m very proud of our organization,” said Pocrass. “We are still in our Valencia location, and now we’re in expansion mode. How’s that for a story?” After the terrorist attacks, said Rick Pocrass, Rena’s husband and CEO of Chocolates a la Carte, the company had to put its efforts into other growth areas in order to survive. “We decided that hospitality was going to come back in due time, and in the meantime we needed to make inroads into area we didn’t have a big presence in,” he said. Retail distribution The company’s retail distribution product line, Signature Products by Rena, turned out to be the vehicle by which the business could grow. Its products are available at Costco locations across the country, and it produces in house chocolate brands for several major grocery stores. “We got a couple of key accounts and did very well,” said Rick Pocrass. “Word spread very quickly.” Pocrass said that when the company’s fiscal year 2006 is over in June, retail sales will make up about 25 percent of the company’s total revenues. Pocrass said that the company’s retail business is on track to double again next year. In order to survive its lean years, the company took a look at every budget item and justified each expense. “We looked at everything from taking vacations to going to trade shows to advertising,” said Rick Pocrass. More catalogues Chocolates a la Carte decided to increase its spending on direct mailers, which helped grow its retail base, and sent out more catalogues. In order to keep from having to lay off too many employees, it switched its shifts from eight hours to seven and a half hours. “Our employee base participated in making sure we could become stronger,” Rick Pocrass said. “In the end we were able to do some things to make it up to them.” Pocrass said his son Michael provided valuable financial discipline during the process. “He did a phenomenal job making us very lean,” Rick Pocrass said. “We really went back to a zero-base, justify-everything type attitude.” “I think something I brought to the table was that I’m optimistic,” said Michael Pocrass. “I’ve got a pragmatic optimism, and I’m more conservative in the budget process, I know exactly what the lowest level of sales is needed to make sure we get to be profitable.” Meanwhile, now that the business is growing again, Chocolates a la Carte has hired a new executive chef, who previously worked at the Las Vegas Hilton, and invested in new machinery that makes a higher-quality, thinner chocolate shell for candies faster than the company’s older equipment. The quality of the company’s chocolates, along with sales, is all going up, Rick Pocrass said.