Guittard Chocolate Company Business Information, Profile, and History

Company Perspectives:

At Guittard, we feel customer satisfaction comes from personal relationships built day in and day out on product quality, reliability, responsibility, and integrity. Building long-term relationships with superior products is how we've been doing business for four Guittard generations. With more than a century of experience, we're able to help you make the most of your opportunities. We'll assist you with everything from the analysis of industry trends to technological support. So welcome to Guittard. As an award-winning, internationally renowned chocolate company, we think you'll find our products and service of special value. Your business is vital to us. That's why pleasing you is our most important goal.

History of Guittard Chocolate Company

Guittard Chocolate Company is a leading manufacturer of chocolate for the confectionary, baking, and ice cream industries. The company has been family-owned for four generations and is the oldest independent chocolate company in the United States. (The Ghirardelli family sold their famous Bay Area chocolate company in 1960.) The company is one of only ten in the United States making chocolate from cacao beans. Most of the company's output consists of ten-pound blocks of several varieties of chocolate, as well as other confections, which are then resold by retail confectioners. The company produces a range of branded confectionary products, most notably its Smooth & Melty mints. The company's strongest sales areas are in the Midwest and the West. Company president Gary Guittard has attributed the company's longevity, as well as its ability to survive as an independent player in spite of widespread industry consolidation, to a unique balance of flexibility and consistency. As he told Newsday, "We always say, 'Taste has memory.'" The company prides itself on being quick to respond to the marketplace. However, some of Guittard's recipes, such as for Old Dutch milk chocolate, date back more than 100 years. The corporate headquarters is known for the potted cacao tree in its lobby.

Gold Rush Origins

Etienne Guittard learned his trade at his uncle's chocolate shop in Paris. In 1860, during the California gold rush, he sailed around from France to California (via the Cape Horn route). In lieu of currency, he carried with him traditional French style chocolate, a rare commodity in those days, to purchase supplies. His three years of prospecting in the Sierras did not pan out, and he returned to France to save up money for a new enterprise--supplying newly affluent miners with premium chocolate and other fine foods.

Guittard returned to San Francisco in 1868 and, with equipment imported from Europe, established the Guittard Chocolate Company on Sansome Street on the waterfront. He originally sold tea, coffee, spices, flavorings, and yeast in addition to the chocolate produced there. The company's importance in the community was indicated by its listing in the 1878 San Francisco telephone directory, which ran to one full page.

Horace C. Guittard, son of the founder, joined the company and took the helm upon Etienne Guittard's death in 1899. In 1906, an earthquake and fire razed the company's first building. The firm relocated to another building on Commercial Street. Ten years later, it moved again, this time to a larger factory on Main Street. By now, the company was exclusively devoted to chocolate. More expansions came in 1921 and 1936. Guittard began a long-standing relationship with its neighbor, See's Candy Shops Inc., immediately after World War II.

New Plant in 1955

Horace C. Guittard died in 1950 and was succeeded by his son, Horace Albert Guittard. The construction of the Embarcadero Freeway prompted the company to move again in 1955. It relocated to a state-of-the-art, 50,000-square-foot factory in Burlingame, south of San Francisco. With equipment imported from Switzerland and Germany, it was considered the most advanced plant of its kind in the United States. Using the continuous flow principles of the day, the machines ran full-time, supplying first-tier confectionery, ice cream, and pastry producers.

Horace A. Guittard was known for embracing automated production and for establishing a testing lab, which he staffed with degreed scientists. A product could undergo 75 different checks before it was finished. Taste testing remained as important as ever, though.

Guittard would be at the forefront of industry trends. Company literature notes it was the first to introduce high quality chocolate chips as well as the first to offer them in large sizes. It also helped its customers capitalize on the truffles fad, and its Guittard Sweet Ground Chocolate found its way into many a café mocha during the cappuccino boom.

Fourth Generation in the Late 1980s

Horace A. Guittard's son Jay had joined the company in 1965. He supervised wholesale operations and became head of the company after his father's death in December 1988. Just six months later, he too died and was succeeded by his brother, Gary W. Guittard. The plant by then had grown to 100,000 square feet and employed 150 people.

Gary Guittard recalled a childhood steeped in cocoa. At the age of 12, he formed his own side venture selling tiny chocolate guitars to neighborhood merchants. He worked in the plant as a teenager but later pursued a brief, unsuccessful career in the advertising business. His father would not let him join the family firm until he had picked up some outside business experience, which he did by working four years at a bakery supplier and a food broker. He joined the family business in 1975. Before his brother's death, Gary had overseen the retail side.

Sales were estimated at about $100 million a year from the mid-1980s to 1990. Purchasers of Guittard's wholesale chocolate included Baskin-Robbins, Blue Chip Cookies, and See's Candy Shops Inc. The company also sold its own brand of chocolate chips for baking and other confectionary ingredients in grocery stores nationwide.

As had already occurred with coffee during the rise of Starbuck's, the U.S. consumer's taste in chocolate seemed to be leaning more towards darker, stronger flavors than those offered by companies producing domestic, mass-produced milk chocolate. In the coming years, Guittard would call upon its specialized experience as a chocolate maker to take advantage of this trend.

Expanded Product Lines in the Late 1990s and Beyond

By the late 1990s, consolidation had left Guittard as one of the only two independent wholesale chocolate suppliers in the country. The company now began developing a line of its own candy bars for retail sale, its first since the 1930s. Chocolates in the "E. Guittard Collection" were branded with the name of the company founder and were replicas of the salesmen's samples Gary Guittard had remembered as a child. Appropriately, these were given French names: L'Harmonie (Harmony), a 64 percent cacao dark chocolate blend, and Soleil d'Or (Golden Sun), a 38 percent milk chocolate blend. These were officially launched to the trade in 2001 and retailed nationwide the following year. At the same time, the company began selling by direct order a range of single-bean varietal chocolates made from different kinds of cacao beans from around the world. These included Colombian (trinitario beans), Sur del Lago (rare criollo beans), and Ecuador Nacional (a unique, zero acidity chocolate made from heirloom trinitario beans).

Theobroma cacao, which translates to mean food of the gods, was first experienced by Europeans in the 1500s. "It's a great learning experience to realize that chocolate from different areas does taste differently," Gary Guittard told Professional Candy Buyer. This was part of the new market of "varietal chocolate." It takes three to four times as long to make chocolate using traditional, artisanal methods, and Guittard was one of the few players with the resources to do it with any scale. Only ten companies in the United States were making chocolate from cacao beans by any method in 2003.

Principal Competitors: Ghirardelli Chocolate Co.; Godiva Chocolatier, Inc.; Lindt & Sprungli (USA) Inc.; Maxfield Candy Co.; Nestlé SA; Valhrona, Inc.

Chronology

• Key Dates:
• 1868: Guittard Chocolate Company is founded in San Francisco by Etienne Guittard.
• 1899: Horace C. Guittard leads the company upon death of Etienne Guittard.
• 1906: The company's original building is destroyed in the San Francisco earthquake.
• 1916: The company relocates to Main Street.
• 1950: Horace A. Guittard succeeds his father as head of the company.
• 1955: New Embarcadero Freeway on San Francisco waterfront prompts the company's relocation to Burlingame.
• 1989: Gary Guittard succeeds his brother Horace as CEO.
• 2001: The company launches E. Guittard artisan line, a collection of vintage chocolate that includes blends and single-bean varietal chocolates.