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Hotel Chocolat logo

Hotel Chocolat, Winner, Judge's Choice

Photo of Peter Harris

A British chocolatier, Hotel Chocolat is one of the world’s few chocolate makers to actually grow cocoa. Originally a web and catalogue business founded by Angus Thirwell and Peter Harris, the first of many Hotel Chocolat stores appeared on the UK high street in 2004.

Photo of Peter Harris, Hotel Chocolat.

Peter Harris


The British cocoa grower and chocolatier has shops in key locations across the UK as well as in Amsterdam, the US and soon Copenhagen. The Chocolate Tasting Club has 100,000 members. The company manufactures in Cambridgeshire and employs over 800 people.

In 2012 there were over 60 stores in the UK, and operations abroad in the US and Europe. Hotel Chocolat was looking to raise finance in order to develop its factory in Cambridgeshire creating many new jobs. The company also wished to open more retail outlets in the UK and expand its overseas operations. There were plans to build an eco-chocolate factory on its site in St Lucia, where the company grows cocoa in its privately owned cocoa plantation, Rabot Estate. But of course, all this required funds. In addition to traditional bank financing Hotel Chocolat was keen to explore less conventional financing opportunities. What the company came up with was the innovative idea of borrowing money from its customers and paying their returns in chocolate!

“Two years before the chocolate bond was launched, the company wrote to some of the members of its Chocolate Tasting Club and asked them whether they would be interested in investing. Following the positive response, a year later the company carried out further research to verify the results,” explains Peter Harris, Co-Founder of Hotel Chocolat. Once the decision had been made to pursue the project, the company worked with lawyers and accountants to develop the concept, which was classified as a ‘financial promotion’ and nontradable. As such, it did not require formal Financial Services Authority (FSA) approval.

When the chocolate bond was launched, the 100,000 members of the Chocolate Tasting Club were invited to invest either £2,000 or £4,000 in three-year bonds which paid a gross annual return of 6.72% and 7.29% respectively. The return is paid in the form of deliveries of chocolate – six boxes each year for the £2,000 bondholders, and 13 boxes for the £4,000 bondholders. The invitation which the company sent to its members provided details of the chocolate bond and informed members about what the funds would be used for.

“The bond succeeded in raising £3.7m and we were naturally delighted with this uptake,” says Harris. In order to build on this success, six months later Hotel Chocolat wrote to the bondholders who had invested the lower amount of £2,000, inviting them to upgrade to the £4,000 bond enabling those members to enjoy free chocolates for a full year. As a result of this exercise, the company raised an additional £360,000.

“The relationship with our customers is one of the most powerful things that we have at Hotel Chocolat,” says Harris. “The major reason why this was very successful is that our customers like us as a business and want us to be around for years to come. People like to support the businesses that they value. Our customers respect the fact that we are specialists in chocolates; they like the style of our business from its ethical side to its authenticity and its originality, and they are keen to support that. So when we approached them, people said they were really keen – and ultimately that showed in their bond investments.” By launching a unique three-year ‘chocolate bond’, Hotel Chocolat succeeded in raising over £4m from its customers in order to fund the company’s expansion plans. It is likely that further chocolate bonds will be offered in the future – and indeed, a number of customers have expressed regret that they didn’t invest when the bonds were initially available.