Chocolate maker Godiva plots Australian expansion
The North Asian private equity owners of Godiva are pushing the luxury Belgian chocolate group further into the Australian confectionary market, and readying the business for either an eventual sale or listing on the Tokyo Stock Exchange.
Rights to sell the Godiva chocolates and soft serve ice cream in this region are owned by MBK Partners, which has $US25.6 billion ($40.3 billion) of assets under management and was co-founded by Michael ByungJu Kim. Mr Kim worked for The Carlyle Group before setting up MBK, which bought the Asia Pacific Godiva assets in a $US1 billion-plus deal in 2019.
Belgian chocolate maker Godiva’s global CEO Jerome Chouchan in the Chatswood store. Louie Douvis
Tokyo-based Godiva chief executive Jerome Chouchan told The Australian Financial Review a firm focus on expanding in Australia was part of the company’s growth strategy.
“The private equity model is that they take your business but grow it, and it has been a very good collaboration,” he said.
“We are very happy with MBK. The exit could be an IPO, which is the most probable, on the Tokyo Stock Exchange where the stock market is good and where Godiva is very strong in Japan. Or it could be a trade sale. We are straightening up the company as an IPO readiness.”
Godiva had not appointed an investment bank, nor was it in a rush to find a strategic buyer, Mr Chouchan said.
Parent entity Orchid in April added Belgian chocolate brand Pierre Marcolini to its stable. Mr Chouchan intends to add other categories, such as tea, helping to create a portfolio of luxury assets.
Hindered by the pandemic
“Australia is very strong in sourcing ethical quality ingredients. In other categories, you see the success in cosmetics of let’s say Aesop or Jurlique – so why not in food?”
Godiva entered Australia about five years ago and has six stores, an online presence and some wholesale distribution, but its rollout was hindered by the pandemic. The local business will return to profitability next year. There are plans for about 20 stores by 2028 in Australia.
“We are seeing double-digit [sales] growth,” Mr Chouchan said. “Our store format is quite unique because it’s a mix between chocolate, treat, gifting and F’n’B [food and beverage], where you can have drinks or ice creams. This hybrid model works well.
“We think that consumers always like to trade up.”
As part of the repositioning, Godiva shrank its store space from 100 square metres per store to 60 square metres, with Mr Chouchan alert to the higher cost of rent and labour in Australia.
While Godiva globally is known for its bite-sized treats such as almond honey truffles or 85 per cent dark chocolate swirls, entrenched brands in the local market like Ferrero Rocher and Lindt are the mass market and premium leaders, while homegrown Haigh’s is popular for gifting.
Mr Chouchan said food culture in Australia had evolved, and the “discerning consumer for good food will go up. We think we have a role to play.”
Godiva Japan generated about $US350 million in sales in calendar 2022, where it has more than 300 stores and is the number one brand for premium chocolate. Sales in Australia are expected to hit more than $10 million this year, but Mr Chouchan is targeting $30 million within five years. Longer term, he has a lofty goal of turning over $100 million in Australia.
Godiva was founded in 1926 in Brussels. It eventually became the official chocolatier of the Royal Court of Belgium. This week, a Belgian Economic Mission to Australia, presided over by Princess Astrid of Belgium, took place. Belgium exported $2.1 billion of goods to Australia in 2022, of which food represented around $230 million.
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