Company Overview - Godiva

Part
01
of three
Part
01

Godiva - Overall Performance

Godiva is perceived by consumers as a confectionery brand that offers desirable luxury chocolates. The brand has been rapidly growing in the last couple of years, and is planning to almost double its revenues by 2022. In the industry, the brand is considered to operate between the mass and luxury market, and has been seen to expand into the baking market.

Godiva's overall performance

  • While the most popular brands in the US are Mars and Hershey, when chocolate lovers focus on eating a more refined chocolate, there is only one brand that occupies the mind of consumers — Godiva.
  • Godiva currently has 800 stores in 105 countries, and has been in the business for 90 years.
  • The company is owned by a Turkish conglomerate Yildiz Holding, and is reported to be bringing in over $1 billion in revenue. It is aiming to become a $2 billion brand by 2022.
  • The global chocolate market is considered to be fragmented but is growing at a quicker pace than the overall confectionery market. In 2018, "Godiva held a share of about 0.8% of the $110 billion global packaged chocolate confectionery market last year, ranking it No. 17, compared with the 5.2% share held by No. 1 Cadbury."
  • It is set to open 2,000 cafes around the world by 2022, while currently operating around 800 stores. According to the company's spokesperson, "company's signature chocolate gifting and chocolate packaged goods distribution business in supermarkets, department stores and other locations will increase Godiva sales fivefold over the next six years" starting in 2018.
  • Godiva is considered to be positioned in the both mass and prestige market (often referred to as "masstige"), similar to Armani Exchange, Victoria's Secret, Bose, Tiffany & Co, Coach, etc. Godiva offers a portrayal of desirable luxury in the way their product is designed and its taste, while offering a high-in-price but not too expensive price range.
  • Godiva expressed their passion for continuing to be positioned in the premium confectionery range whilst offering products priced at a significant premium relative when compared to the mass market confectionery brands. Godiva focuses on chocolate gifting and is insistent in portraying the brand as an exclusive luxury.
  • In the chocolate and confectionery industry, Godiva is perceived as expanding extensively. It has recently announced it will be soon available in grocery and department stores such as Whole Foods and Bloomingdales.
  • Additionally, it is also expanding into the baking aisle by partnering with General Mills to offer a line of baking mixes. Godiva said it is "incorporating its signature chocolate into a product line featuring four dessert options: Molten Lava Cakes, Brownie Cheesecake Swirl, Raspberry Chocolate Torte and Flourless Chocolate Torte."
Part
02
of three
Part
02

Company Analysis - Godiva

Godiva's competitive advantage is rooted in the company's ability to differentiate, its strong market hold globally, and its popularity in the gifting segment. Godiva's value proposition is rooted in tradition, its luxury offering, and high quality products.

Godiva company analysis

Competitive advantage

  • Godiva's competitive advantage is rooted in the company's ability to differentiate. Godiva creates extensive lines of products like the Truffles Chocolate selection that offers a huge variety of different flavors when compared with competitors.
  • Additionally, the company's long-standing operations have allowed it to have a strong market hold in Asian countries such as Japan, China, Taiwan and Singapore, as well as a decent share in Europe and North America.
  • Godiva's popularity is primarily in the gifting segment and the biggest proportion of sales as gifts happen on Christmas, Easter and Valentine’s Day. Additionally, due to the company having rich traditional values of Belgian chocolate, it is able to market itself as the chocolate brand that provides consumers the best quality chocolates with health benefits.

Value proposition

  • According to the company's vision and mission statements, Godiva's value proposition is rooted in the company having nearly a century of "powerful stories to share with the world, and countless opportunities to create wonderful moments with its signature Belgian chocolate." Godiva represents an "infinite number of bespoke moments from generations of chocolate lovers."
  • Godiva provides value to its customers through four different avenues — reputation and history, quality, luxury experience, and broad sales reach.
  • Godiva's reputation and history is seen through its authentic Belgian heritage proposition that dates back to the early twentieth century, and is amplified the company’s reputation as a luxury producer of chocolate products. The products, are presented in a wide range and are considered to be of the highest quality, made from premium ingredients and using a traditional recipe.
  • The company offers a luxury experience when buying products, and has a broad sales reach through retail outlets, upscale grocery stores, boutiques, cafes, airport lounges, and online sales channels.

Weaknesses

  • So far, the company hasn't been marketing itself as a young brand. Up until 2018, Godiva's advertising was focused on reinforcing families and older people who are most probable to be buying premium chocolates as gifts.
  • However, last month, Godiva launched a new advertising campaign that is designed to capture the interest of Millennial consumers. The company created a marketing campaign that features a love story between Pierre, a chocolatier, and Mimi, a lover of sweets.
  • Godiva's pricing is typically set at 50% above the market price of Hershey and Mars, and targets the mass market consumers only when it comes to special occasions as the typical price per bar of Godiva chocolates is considered to be too high for everyday occasions.

Opportunities

  • Godiva's opportunities mainly lay in the expansions possibilities, both in geographies and verticals. The company is focused on expanding its cafe business, and is set to open 2,000 cafes worldwide by 2022.
  • The opportunities for a geographical expansion are rooted in the company setting up shop in Australia, Middle East, and South America. All three territories have not been covered by Godiva so far.
  • When it comes to expansion by verticals, Godiva's opportunities lay in the company broadening its portfolio of airport offerings with stand-alone storefronts and airport lounges.
  • Additionally, Godiva's opportunity can be seen in the possibility to launch its products in more grocery stores, which would allow the brand to appeal to mass markets more easily. So far, Godiva has focused its retail efforts on its own boutiques and a few notable grocery stores but is yet to make its products available in grocery stores across the board.
Part
03
of three
Part
03

Godiva - Important Changes

The most important changes within the Godiva brand in the last 24 months involve appointments of the new CFO, president for the UK, Middle East, North Africa and Turkey, and chief supply chain officer. Additionally, the company sold parts of its Asia-Pacific business to a private equity firm MBK Partners, appointed two new partner agencies to elevate the brand, and announced a partnership with General Mills to launch a range of baking mixes.

Important changes within the Godiva brand in the last 24 months

Ownership

  • Announced in December 2018, Godiva is said to be in talks with investors to raise capital for the planned aggressive expansion in North America, Asia and other countries. For this, Godiva is in talks alongside its bankers at Morgan Stanley and several potential strategic investors about a future $1 billion transaction.
  • In February 2019, Godiva announced they are selling parts of its Asia-Pacific business to a private equity firm MBK Partners. The sale, which is estimated to bring in between $1 billion and $1.5 billion involves Godiva’s operations in Japan, South Korea and Australia, as well as the production facility in Belgium that supplies these regions.

Strategy

  • In May 2018, Godiva announced they are looking for an agency to "develop a single global brand strategy and campaign for its retail boutique and FMCG business." Currently, FMCG account is held by The & Partnership London while McCann holds the boutique business. Godiva currently has 40 cafés which include an outlet in Harrods, London, and cafés in Istanbul and Shanghai.
  • A month later, the company announced they appointed two new partner agencies to elevate the iconic brand, as well as redefine the consumer experience. McCann and Hill+Knowlton Strategies have been selected for "their omni-channel capabilities, global reach, and strategic insights."
  • In March 2019, Godiva announced a partnership with General Mills to launch a range of baking mixes which will feature Godiva's 70% dark chocolate.
  • A Virginia man sued the brand in July 2019 for misleading customers in the US by labeling the chocolate with the Belgium 1926 stamp. Godiva chocolates in the US are manufactured in Pennsylvania. The lawsuit is still to be brought to court.

Marketing/advertising

  • As part of its Easter marketing strategy last year, Godiva unveiled its "most expensive and extravagant Easter egg to date, a decadent £10,000 egg made from 65kg of Godiva dark Belgian chocolate." The egg was created Godiva’s Creative Development Chef, and was displayed in Godiva’s St Pancras International boutique.
  • Last month, the company announced it will be investing more in its digital marketing strategy. The digital spend now accounts for 70% of Godiva's overall marketing budget, up from 60%.
  • According to the company's chief marketing and innovation officer John Galloway, while Godiva is "a recognizable and well-known global brand, it tends to be one that customers think about for special occasions or holidays rather than day-to-day chocolate consumption. Increasing the top-of-mind awareness through paid search, paid social, as well as programmatic and partnerships with publishers like PopSugar and Buzzfeed, is part of the company’s plan to grow the business by five times over the next six years."

Leadership

  • Last summer, Godiva appointed a former Burberry executive Virginie Costa as its new CFO, after the company's long-term chief financial officer, Selim Baraz, left the company in December 2017 after 6 years.
  • In April 2019, Godiva appointed Olivier de Mendez as the president for the UK, Middle East, North Africa and Turkey. According to the company's press release, De Mendez will be responsible for Godiva's expansion, and lead the addition of new product and categories, new markets, and Godiva cafés.
  • In June 2019, Godiva appointed Martin Reid as chief supply chain officer. Reid was appointed to lead Godiva's supply chain and support the company's plan to grow its business five times over the next six years.
Sources
Sources

From Part 02