Becoming an entrepreneur is a choice, not destiny. That’s the conclusion of Edward Riando Picasauw after taking his chocolate business from nowhere into the top ten brands in one national retail network. Yogyakarta-produced Chocolate Monggo has become a recognized trademark in the middle to upper market chocolate segment.
It was in the early semester of his studies in Sanata Dharma University when Edward Picasauw formed the idea of having his own business. “I told my friends that I wanted to be a manager before I graduated from university, and that I would become an entrepreneur, not an employee,” he recalls.
Now, with Chocolate Monggo ranking in the top ten for chocolate sales in the Circle K retail network, Edward can look back at his rocky road to success. “People were laughing at me,” he recalls of his early days in business. He found that becoming an entrepreneur is an easy thing to say, but hard to do. He had no idea of how to run a business and no money to start one.
Looking back, he believes that the most important factor of business is relationships. With that belief, he used his time to travel and spend time in Bali and Jakarta, meeting people and making as many friends as he could. “The result is that I have many expatriate friends,” he smiles.
Yogyakarta was another tourist destination that opened many opportunities to meet people from other countries. One day, he met Thierry Detournay, a Belgian backpacker who decided to stay in Yogyakarta after a year of exploring Southeast Asia. Thierry had an additional reason to stay in Indonesia: he had found his soul-mate, a girl from Solo.
We became good friends, and I found that Thierry would sometimes make chocolates for himself,” Edward recounts.
When Edward with Thierry and another friend decided to start a business, this was not purely about chocolate, but a café at Lembaga Indonesia-Perancis, the French language institute in Yogyakarta. His cooperation with Thierry continues to the present day, while the other partner dropped out early in the struggle to build a business.
At the café, Edward managed the main meals corner with its European nuance, while Thierry handled the chocolate corner. “Making chocolate is my hobby,” Thierry recounts. Edward, meanwhile, had no idea about chocolate at all in the early days of the partnership.
In 2004 Edward began to think that if he wanted to develop the business, he must do more than just open a café and wait for customers to come. He and Thierry designed a new product, Cacao Mania. As the chocolate expert, Thierry was responsible for the quality of production, while Edward took charge of marketing.
At first, Edward and Thierry made their chocolates only for special events like Valentine’s. “It was still hard for us to enter the retail market,” notes Edward. The Valentine chocolates the pair produced in 2004 and the following year brought an offer from Circle K Yogyakarta to carry their products. “Circle K was the first retailer to accept our product,” says Edward.
That first success reminded the partners that they should register the brand. Their application was rejected, since the word Cacao is a product that may not be registered, while Mania had already been claimed by another company, and for a similar product.
They decided to use the word Monggo as their new brand, a Javanese word meaning please. Edward registered the patent for Monggo brand in 2006, and the certificate was issued in 2009.
From the start, Chocolate Monggo chose to play in the upper strata of the chocolate market. Unlike more popular brands which use palm oil as a compound, Chocolate Monggo uses only pure chocolate butter, adding no preservatives, with the percentage of cacao at 58% or 69%. The higher percentage of cacao, the more bitter the chocolate.
It is difficult to find Indonesian chocolate producers who use pure chocolate butter. I think Dapur Coklat is one of the few,” Edward states. Pure chocolate butter brings high quality that can be sold at a premium price. Edward and Thierry’s products sell for between Rp13,000 and Rp30,000 a package, depending on the size and type. One supermarket puts an even higher price on the products, at up to Rp40,000. Now production of Chocolate Monggo has reached 60,000 packages per month.
Antonius Budisusila, a cacao industry researcher at Sanata Dharma University, says presentation is the big plus in Chocolate Monggo. “The choice to enter the specific quality and middle to upper market is smart. Yes, Indonesian consumption of chocolate is growing around 2.5% per year.
However, it doesn’t mean that Chocolate Monggo or another new brand will find it easy to grab the opportunity. It is impossible for small newcomers to fight head-to-head with the mainstream brands with large capital.”
High quality, high risk
Determination to take a position in the premium class using pure chocolate butter leads to added costs compared to simple chocolate. First, the products have a short shelf life, at an average of six months and an absolute maximum of a year.
Second, ideally the chocolate must be kept at a temperature of around 18 degrees Celsius. Any warmer, and the chocolate will melt, any colder and it will bloom, creating a coating of moldy-looking white on the surface of the chocolate. Blooming occurs when the cold temperature brings the chocolate butter to the surface.
We realized that in the retail market there are so many giant competitors with big brands that have been involved in the business for a long time,” says Edward. “We decided to play in a different class, in the higher quality market. We also provided many choices of chocolate with a local taste, such as chili, durian, ginger, etc.”
In addition to regular production for the retail market, Edward and Thierry continue to produce special products for events like Valentine’s, Christmas, Easter and Halloween. For every event, production can reach a weighty 15 tons, triple the regular monthly level of production.
In another move to sidetrack the tight competition in the retail market, Edward has turned to tourism as another marketing ploy. “The reason is simple. When Asians go abroad, they look for famous chocolate from European countries. In fact, Indonesia is the third biggest cacao producer in the world, after Ivory Coast and Ghana. Why don’t we produce good quality chocolate to gain a share of the market? ”.
The fact that Indonesia is one of the biggest cacao producers does not mean that farmers are economically successful. That’s why, for Edward, the fate of the Indonesian cacao farmer is a concern.
When I was invited to a discussion session with cacao farmers in Sleman, I realized that it was a shame to become a cacao farmer. You know, rice farmers can eat rice, coffee farmers can drink coffee, tea farmers can drink tea, but I found that cacao farmers never eat chocolate! When I brought some of our products to the presentation, they told me it was the first time they had eaten chocolate. For many Indonesian farmers, chocolate is still considered an expensive food.”
Step by step
Starting out in business in 2003, Edward faced tough times for the next five years, at one time facing a crisis of liquidity. He tried to get credit from a bank, but was turned down since he could not provide adequate collateral. Some new investors joined, but did not commit to the business in the long term.
His efforts in producing chocolate for events did prove successful, however, helping him to launch the new local brand with its distinctive flavors.
Yogyakarta-based psychologist Susana was an early convert to the brand. She remembers when Chocolate Monggo started selling its products at the Kotabaru Church after mass. “They were very creative to make so many interesting forms of chocolate that my son pushed me to buy. That was the first time I became acquainted with the taste of Chocolate Monggo. I could see this young guy was tenacious to develop the business.”
Sales began to grow from month to month in 2008, making a giant leap forward when Carefour agreed to sell Chocolate Monggo. At the same time Circle K Yogyakarta started to recommend the product to Circle K networks in Jakarta, Bandung and Bali.
At the launch of the Chocolate Monggo brand in 2006, production was only 200 kg per month, while now output stands at a regular five tons per month, with teams of employees spread across many cities in Indonesia including Semarang, Surabaya, Cilacap, Solo, Bali and Batam, with Yogyakarta as the center of production.
Now, the brand can be found in many retail markets including Carrefour, Superindo, Hero, Giant, Mirota, Gardena and some fruit shop networks. “Some specialty fruit shop networks sell snacks and most are imported products. We are happy to find our product taking a place alongside the ranks of imported products,” says Edward.
Recently, with the business growing fast, several banks have offered credit. In line with his plans to export, Edward has seized the opportunity to buy machinery from Europe, “There is a lot of demand from European countries, America, Canada, and New Zealand. We already have the export permit from BKPM (the Investment Coordinating Board) and are waiting for a permit from the Directorate General of Customs.”
Chocolate Monggo can claim to have established its brand presence. It’s even being copied, with many new local brands of chocolate in Yogyakarta with similar packaging. The newcomers may try to look like Edward’s creation, but they can’t taste like it, playing it safe at the lower end of the market with a palm oil mixture, not Chocolate Monggo’s pure chocolate butter. GA