“The Profit” paid a visit to Zoe’s Chocolate, Co. in Pennsylvania, a family run business with a bleak outlook. The product was stellar, produced with love and care, but the operation suffered from lack of marketing imagination, brand extension and a total lack of business process.
The business was created by three loving kids, Pantelis, Zoë and Petros Tsoukatos, whose dad George was a master chocolatier. He lost a job after many years of work and the children, now grown returned home to begin a family chocolate business. It worked, and well, for a while, until sales began to crater and debts mounted.
Marcus Lemonis saw potential for growth, replication of retail locations and national partnerships with large brands. He offered $250,000 for 50% of the company, but settled for 40% on an investment of $200,000. Marcus loves family businesses begun by older generations with kids who continue the legacy.
He also loves a business with a heart-warming family story behind it, and knows it can connect to the buying public. When faced with making a choice among commodities, branding can be the key. Zoe had avoided that, believing that it pained her dad to highlight what he believed was a failure on his part. Lemonis made it clear that if they accepted his money, he was 100% in charge, and things were about to change rapidly.
The chocolate product was unique, using tastes from the family’s Greek heritage and more, but Zoe’s had only 18 flavors to choose from after ten years of being in the business. They had refused to make novelty items to increase revenue despite having oodles of physical space at their facility.
One of the things that “The Profit” does well is to use the turnaround stories of previous companies on the show, using them as examples of what could be. Lemonis flew the three kids to his Flex Watches business in So Cal where the partners, who had become Marcus’ in-house design team, showed Zoe and her brothers what packaging and sales material should look like.
That wasn’t all, however, because Flex had to face the lack of connection to its potential buyers in a similar way to Zoe’s Chocolate, Co. A partner lost his mom and decided to donate 10% of the proceeds of watch sales to charities, something his mother would have loved. It was too painful for him to tell that story and continue to have it come up in conversation.
He worked it out with Lemonis, and the rest was history. Zoe had to be forced to accept the changes, but after giving in, worked in partnership with Lemonis and his team. The inevitability of brand extension became clear to her and Marcus worked to get their first international partnership opportunity. He remodeled the retail store, changed the packaging, branding colors and variety of products.
A family business that hid its a great asset was ready to face the public in a new and better way.
“The Profit” airs Tuesdays on CNBC, beginning at 10 p.m. ET/PT Image credit: CNBC, used with permission