Chief chocolate connoisseur

As CEO of Purdys, Canada’s venerable family-owned chocolatier, Karen Flavelle is making sure the 110-year-old company lives up to its rich legacy.

While autumn is in full swing in the middle of October in Canada, Karen Flavelle boards a plane in Vancouver for a 25-hour journey to visit cocoa co-ops in the intensely hot sub-Saharan West African nation of Ivory Coast.

The morning before the 60-year-old chief executive officer of Purdys Chocolatier lands, the weather in the capital city, Yamoussoukro (the biggest city close to the cocoa co-ops she’ll be visiting), is 29 C with light rain. A few months earlier, in June and July, many of the country’s main cocoa-growing regions were pelted with heavy precipitation, causing flooding in some plantations and damaging cocoa pods. While some exporters and pod counters predicted 2017 would be a huge year for cocoa production (two million tonnes’ worth) in the world’s No. 1 cocoa producer, farmers in Ivory Coast worried their crops would continue to suffer if the substantial downpours didn’t let up. But by the time Flavelle touches down, farmers in some key areas that Purdys relies on report better conditions, citing more sun and lighter showers, as the 2017/2018 harvest season officially begins.

That’s great news for both farmers and chocolatiers, but it’s not the reason Flavelle and Michelle Harper, the national marketing manager, are in Africa. Last summer, Purdys ran a campaign dubbed the Clean Water Project that raised money to provide water filters for cocoa farmers as part of its Sustainable Cocoa Program (Purdys itself switched to 100% sustainable cocoa in 2014). During her trip, Flavelle not only participated in presenting locals with 63 LifeStraw Community water filters (which will provide safe drinking water for more than 3,780 community members for three years), she also joined farmers who were learning more advanced techniques in the field, saw mobile medical trucks, spoke with local women business owners and experienced firsthand the differences Purdys’ program has made for farmers and their communities.

This Sustainable Cocoa Program is far from the only idea the company can call its own. When the Flavelle family bought Purdys in 1963, it had four shops. Under Karen’s father, Charles Flavelle, that number grew to 44. Later, the company opened more locations and entered the Ontario market, and the number jumped again — this time to 58. Since current president Peter Higgins took up his post in 2012, the company has seen an expansion to 77 stores. Flavelle — who’s asked what her favourite chocolate is by everyone she meets — continues to serve as sole owner and CEO.

No surprise here, but chocolate is hot. You know what they say: nine out of 10 people like chocolate — the 10th person always lies. In a super-competitive industry, there are plenty of players vying for market share. According to research by Euromonitor International, Nestlé Canada had a 15% share in 2016, with Hershey Canada close behind at 14%; Cadbury took third spot with 13%. (As a private company, Purdys doesn’t disclose financial information.) Canada consumes a lot of the sweet stuff. In 2012, Confectionery News published a list of the nations that had the highest chocolate consumption per capita. That year, Switzerland took the top spot — each Swiss resident ate an average of almost 12 kilograms. (Regular chocolate bars weigh about 45 grams, meaning each person ate about 280 bars over the year.) Canada made the top 10 — we ate an average of 6.5 kilograms per capita.

But Purdys’ executives don’t seem fazed by multinational competitors. With its chocolate shops in BC, Alberta, Saskatchewan, Manitoba and Ontario (all company-owned; Purdys doesn’t franchise), plus a booming e-commerce business (which includes business gifting), about 1,200 employees (depending on the time of the year) and the ability to produce 100,000 pieces of chocolate a day in its factory, the company has something that other players in the market don’t: it has remained a wholly family-owned-and-operated business for many of its 110 years. And if history is any indication, Purdys is poised to live up to its rich legacy.

THE EARLY YEARS

For Richard Carmon Purdy, 1907 was a sweet year. After the London, Ont.-born barber lost his son to illness in 1903, he packed up and headed west to British Columbia. He settled in Vancouver and often spent time making chocolates in his home kitchen and selling his confections on the streets. When he realized his hobby had some business potential, he opened a modest storefront on Robson Street (and later, Granville Street), starting with a few secret recipes that he came up with (the company still uses his dark chocolate recipe today). He kept the shop going until the early 1920s when he found himself deep in debt and had to go into receivership. But he lucked out — some of the company’s major creditors (also big chocolate fans) were keen on saving Purdys and sent in a bookkeeper named Hugh Forrester to restructure. By 1925, Forrester had taken the company out of the red and paid back its creditors, who, thankful for Forrester and not wanting to continue running the business, sold it to the bookkeeper for $1.

Forrester managed the store through the Great Depression and the Second World War, when rations of cream and butter were in short supply. To offset the dairy shortages, he purchased a farm in Ladner, BC, in 1939 and with 20 cows, he continued to make chocolate creams. (More than 78 years later, the creams are still made the traditional way for that authentic taste Forrester brought to the business.) His son, Frank, soon joined the company, bringing in his entrepreneurial spirit — he came up with new varieties of chocolates and introduced more modern production methods that Purdys still uses today. Eventually the working relationship between father and son grew contentious (Hugh felt some of the moves Frank wanted to make were too risky) and in 1963, they put the company up for sale.

Karen was six years old that year. Her father, Charles, who had a background in production and construction, was 34. When he and his friend and neighbour, Eric Wilson, an accountant and entrepreneur, heard that Purdys was on the block, they jumped. Purdys had been a favourite of Charles, who had grown up in Vancouver. Wilson, the son of a baker, came from England in his early 20s. He got his CA designation in Canada and started a business doing accounting for IGA grocery stores. “He had his eyes open for interesting companies, and when he came across Purdys, he thought of my father,” says Karen. “Mr. Wilson felt that between his finance, accounting and retail experience and my father’s experience in production, they had all aspects of Purdys’ business covered. Plus, they both had a sweet tooth.”

DOING THINGS DIFFERENTLY

Under their leadership, Purdys’ success snowballed. The two opened stores in Alberta, increased their product offerings and opened a state-of-the-art factory. “At 34, my father observed that the competitors in the market were all run by older men. And this leadership wasn’t encouraging their companies to anticipate and respond to customers enough to stay relevant,” says Karen. Among other significant changes in his era, Flavelle added milk chocolate to Purdys’ chocolate menu in 1969 (the company had previously only made dark chocolate), set up shop in malls and introduced both the iconic hazelnut Hedgehog and the scrumptious Sweet Georgia Brown — still a couple of best-sellers. Karen says the duo also built a culture where employees liked the work they did and the folks they did it with. “This desire to create such a caring culture grew out of experiences my father had in his previous career, with bosses he had not enjoyed working for,” she says. “He vowed to do it differently when he had the chance, which he did at Purdys.”

Purdys Chocolatier store

After 30 years running the company, Charles hired Karen as executive vice-president in 1994, but he didn’t just hand his daughter the gig. “He didn’t want to parachute any of his children in over long-term employees at the company. Also, he wasn’t thinking about what the end game was going to be — he was going to run Purdys forever! He wasn’t thinking about the future and what those alternatives would be,” Flavelle says. “Fertile ground was created for me when two things happened: a long-time employee asked when the family was going to join the business, and sadly, my youngest brother died in a mountain-climbing accident. This caused my father to think more about when and how he would give up the reins.” At the same time, Flavelle says she knew she wanted to join Purdys. Having held senior positions in the food industry at both General Mills and Cara Operations, she felt she was ready to take on retail. “I also loved how Purdys made people feel. Of course people love chocolate, but it’s really the fact that chocolates are a gift that makes people feel good.” She points to the reasons customers ultimately buy the company’s treats: “It’s to say, ‘I care about you,’ ‘I appreciate you,’ ‘Thank you.’ In addition, there are so many family traditions such as ‘Christmas isn’t Christmas without Purdys,’ ‘My sister and I get through hard times together with Hedgehogs,’ ‘My husband proposed to me with a ring in a Purdys heart box.’ It is so phenomenal to be part of people’s lives in such a deep, warm way.”

Like her father, Flavelle is making her mark at the company. One of her first orders of business was to re-establish purple as the colour associated with the brand. “It had gotten lost over previous years. The purple has become a key component of Purdys’ brand.” She also created offerings specifically designed for occasions and price points, rather than selling by the pound, as the company had traditionally done. She built a strong executive team with members who have developed good interdepartmental working relationships. She introduced online sales in 2000, encouraged a year-round fundraising business (for schools and other associations) and expanded the seasons that drive gift-giving to include Diwali, gifts for teachers, the Lunar New Year, Pride month and Hanukkah, for example. (Hedgehogs are even kosher-certified.)

When Flavelle decided it was time to step back from day-to-day operations to focus on future growth and how to evolve the brand, she knew exactly who should be made president: Peter Higgins, the chief operating officer and resident chocolate scientist. (Really, he’s a chocolate scientist.) “Peter had grown up through Purdys from leading the factory to adding responsibilities for web sales, Purdys fundraising (it was his brainchild in earlier years to make it year-round) and moving into Ontario, which had just 10 stores at that point,” says Flavelle. In his time at the helm he’s expanded to 23 stores in Ontario, 52 stores in BC and Alberta and has opened new markets in Winnipeg and Saskatoon. Flavelle says he’s also charged with re-establishing the chocolatier culture at Purdys by encouraging and training everyone in the company to become chocolate enthusiasts.

This part comes naturally to the chocolate scientist. You’d be hard-pressed to find someone who’s more passionate about chocolate than Higgins. When he describes Purdys’ signature Sweet Georgia Browns — “roasted, lightly salted pecans with creamy, soft caramel and a dollop of chocolate on top” — you can’t help but crave the treat. The 49-year-old, who has a background in food science, has made sure employees across the organization know how the products are made and the flavour profiles and techniques that make the chocolate so unique. “There’s a lot of training that takes place — all of our teams must be experts,” he says.

THE NEXT HEDGEHOG

Higgins, who eats a good half-dozen chocolates every day, is heavily involved in the development of products. “Ideas come from everywhere. There’s a chocolate development team and we do a lot of tasting and discuss what customers are looking for based on flavour trends and tests in our stores,” he says. About 150 new recipes are tested each year and Purdys launches about a dozen. “We’re always looking for the next Hedgehog while trying new flavour combinations, such as our Goat Cheese and Chardonnay Truffles and our Raspberry Balsamic Truffles with dark chocolate ganache.”

Employees who work alongside Higgins when he’s in the chocolate kitchen have some of the best jobs in the company and take pride in their work. “We’re a handmade chocolatier — there’s magic and artistry in this,” he says. “Our cream is hand-stirred in copper kettles and chocolates are hand packaged into boxes.” These folks need not worry about automation taking over their jobs, but that doesn’t mean the company isn’t investing in technology to assist their work. Duncan Johnston, Purdys’ chief financial officer, says the company is investing millions into its production and packing machinery on a regular basis.

Higgins, whose favourite chocolate changes daily (right now it’s the Ghana bar — 45% milk chocolate with “hints of caramel” and a “pronounced cocoa taste”), has also been instrumental in the crowded and popular business-gifting category. “Giving a box of chocolate is wide-reaching and shareable, and it’s a lot more universal and emotional than other gifts. Giving premium chocolate to clients is something special. We don’t take it for granted that we are part of people’s celebrations.”

To stay relevant, Purdys must keep tabs on other trends as well. Alejandro Marangoni, a professor and Canada Research Chair in Food, Health and Aging in the department of food science at the University of Guelph in Ontario, is a chocolate expert (he’s even teaching a new course, intro to chocolate science and technology, this winter). He says the trend these days is toward higher-quality chocolate from unique origins, as well as higher chocolate content (50% to 70%-plus). Purdys is ahead of the game here, with products such as its 72% Dark Chocolate Ecuador Himalayan Pink Salt & Lampong Pepper Bar. Marangoni says other trends coming down the pipe include reduced-sugar and organic chocolate, as well as smaller portion sizes. “Marketing plays a huge role here too — darker chocolate, attractive packaging, possibly a story of sustainability, the benefit to poor growers and fair trade.” Purdys’ Sustainable Cocoa Program pays farmers a premium to buy their cocoa, invests in farmer education and works to improve their overall quality of life.

Purdys has also taken steps to reduce its carbon footprint in its factory and stores. “A couple of examples are converting lighting from old mercury halide to LED in our warehouse, which ties into our community development programs, fundraising activities and employee engagement,” Johnston says. The company has saved more than 1,000 trees in the past decade (its paper, like its cocoa, comes from sustainable practices), cut its landfill waste and reduced its greenhouse gas emissions.

The environment and customers are always top of mind, but so are employees and the community. Purdys has been named one of the 50 Best Employers in Canada by AON (a global human resources company) six times since 2004, including the past three years. It was chosen No. 1 in the Top 100 Woman-Owned Businesses by Business in Vancouver magazine. Some employees participated in and won Canada Sings, a televised competition in 2012, in which corporate glee clubs competed to win money for the charity of their choice ($25,000, plus an extra $10,000 thrown in by the company, went to the MS Society of Canada, inspired by an IT team member’s wife who has the disease). And Purdys and nearby Rogers’ Chocolates of Victoria were honoured as the official chocolate providers for the 2010 Winter Olympic Games in Vancouver — Flavelle was even a torch bearer.

The future of Purdys is bright — chocolate isn’t going anywhere. (The adage rings true: you can’t buy happiness, but you can buy chocolate. And that’s kind of the same thing.) And neither is the Flavelle family. Karen, who, by the way, favours Himalayan Pink Salt Caramels, has no interest in selling or going public. “Selling so often results in a negative situation for a business and its employees. It doesn’t even cross my mind,” she says. Her adult children aren’t currently employed by Purdys, but that doesn’t mean there won’t be opportunities. “Retaining the culture of the business by passing it down within the family became our goal. The fact that three different families have owned Purdys is a testament to the longevity of the brand.” And to the Hedgehog.