Start-up: Giving chocolate the Cocoraw deal

This article first appeared in Enterprise, The Edge Malaysia Weekly, on May 14, 2018 - May 20, 2018.

People are impulsive and tend to make buying decisions when they see something physical. Also, a lot of them are last-minute gifters and prefer not to wait a day for the products to be delivered if they ordered it online. > Woo

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When one thinks of truffles, one usually imagines very expensive mushrooms, nosed out of their hiding places by the sensitive nostrils of swine, and served up at premium prices in gourmet restaurants. But chocolate truffles have nothing to do with fungus. People are more apt to relate these to premium chocolate brands such as Japanese chocolate maker Royce’.

However, a local brand — Cocoraw — has been making waves in the Klang Valley. The husband-and-wife team of Michael Woo and Lee See Pin, who founded the chocolate truffle store, simply wanted to offer good quality chocolate at accessible prices to Malaysian consumers.

Both were looking to escape their tedious corporate lives. Lee sat down with her then boyfriend to explain to him that she would like to start something on her own. Woo told her that he too wanted something different — in his case, to set up a travel website.

For Lee, it was always going to be something to do with chocolate. Being a chocolate lover as well as someone who loves to bake, a chocolate-related business seemed a natural choice.

She usually stuck to baking chocolate cakes and muffins. But one day, she decided to go out on a limb and attempt chocolate truffles. She nailed it on her first attempt, leaving her family impressed and wanting more.

Lee had no formal training in the art of truffle-making and learnt it all on her own. At first, it was difficult to get the right consistency. “We sold the truffles at a flea market the first time and it was absolute chaos. I was struggling even to make 20 boxes of truffles because that was a lot more than I was used to making,” she says.

Lee exhausted herself and started to panic. It was a very steep learning curve, but she eventually got the hang of it. Making chocolate truffles, she points out, is about getting the perfect consistency of cocoa and milk to achieve the perfect ganache.

It takes her 20 to 25 minutes to make a batch, and this excludes the time it takes for the truffles to set in the refrigerator. Because of this, the number of batches she can make on any given day is limited.

“During festive periods, I try to get my family to help out. But for the most part, it is only Michael and I doing all the work. We are looking to slowly increase the headcount,” says Lee.

It was not enough for her to get a decent chocolate ganache. She had to experiment with different flavours to differentiate the brand’s truffles in the market.

Once she was satisfied with her concoctions, it was time to test them out in the market. So, the pair set up stalls in different flea markets in January 2016.

“We went to flea markets in Publika and a few other places to allow people to try the flavours we had to offer. At the same time, we started taking orders on Facebook,” says Lee.

Once they had built up momentum, the couple set up their own merchant website to purvey their wares. Then Woo quit his job to manage Cocoraw full-time and Lee followed suit not long after.

Lee had come up with a host of flavours, ranging from the traditional — ‘The Raw 70’ (dark chocolate) and milk chocolate truffles — to fusion flavours such as salted gula melaka and teh tarik. Getting the teh tarik flavour right was a bit tricky, she says, especially getting the tea and chocolate flavours to blend. She also came up with alcohol-infused chocolate such as gin and limau nipis as well as the ‘Alcoholic Anonymous’.

The duo have opened a kiosk in Bangsar called Cocodash. Woo explains that although they want to remain true to their chocolate truffle roots, they do provide chocolate drinks and even brownies over the weekend.

The chocolate drink was inspired by a drink served in a place known as Dark Sugars in London. “Basically, they give you finely chopped chocolate over which you pour hot milk,” he says.

Woo explains that although they were inspired by Dark Sugars’ chocolate drink, they did not copy it. Instead, they met the concept halfway. “It is expensive to make it that way. We were also worried that people may not stir the drink properly, so the chocolate would clump at the bottom, or the drink would lose its taste. So, we add the chocolate with more milk in it, then we top it with some shavings for the ‘mouth-feel’,” he says.

The pair kept the brand’s logo and packaging as simple as possible, coming up with most of the designs on their own, mainly to save money because they are trying to keep costs down and prices as accessible as possible. The truffles come in a simple brown box, which is not only simple and affordable but also eco-friendly. “All our packaging is recyclable, except for the insulator bag. But that is reusable,” says Woo.

Stickers of different colours are used to denote the different flavours. “If people do not remember the flavour, at least they can remember the colour,” he says.

When they started out, neither Woo nor Lee took a salary from the business. “What we made, we saved. We are still investing everything we make into the business to expand it. We set ourselves a target that within two years, we would be making at least some of what we used to,” says Woo.

They started the business in mid-2016 with RM8,000 from their savings. Later, they used RM12,000 to RM13,000 from the revenue generated by the business to start the Cocodash kiosk. After setting up the kiosk, their revenue has grown 200% to 250% year on year.

Woo says the kiosk increased revenue because of their customers’ buying habits. “People are impulsive and tend to make buying decisions when they see something physical. Also, a lot of them are last-minute gifters and prefer not to wait a day for the products to be delivered if they ordered it online.”

In fact, online sales now constitute less than a quarter of Cocoraw’s total sales. Most of its revenue comes from its kiosk and events. The company has a number of events lined up over the next few months, says Woo.

“Sales were very good in December and again in February, but it was slow in between. That is to be expected because we are a seasonal business. Usually, the demand is higher during festive seasons,” he says.

Woo notes that the company does not rely solely on tourist traffic, but it does get a lot of expatriate customers. “When they are going back, they buy our truffles as gifts. So, it is not just for the locals.”

Lee and Woo have been building the business almost single (or double) handedly, but they realise that if the business is to continue growing, they will need to hire others. More importantly, Lee needs another pair of hands in the kitchen. “It can get very tiring, especially when you are making everything from scratch,” she says.

Woo does not actually make the chocolate, but he has his hands full, running around, all the same. He mans the store, delivers the chocolates and looks to strike deals with cafés.

He says the company does partner cafés, but it maintains a low profile about it. “We supply some of our pre-made cocoa powder or pure cocoa powders to cafés. We do the base for ice chocolate drinks for a restaurant called Michelangelo, our first corporate partner, which has been with us for 1½ years already.”

They plan to expand the Cocodash kiosk, but will probably wait until after the general election to do so. “We are looking at Subang and Petaling Jaya because, looking at our customer demographics, we realise they are mostly from these areas,” says Woo.

The additional stores will be wholly-owned as neither Lee nor Woo believe in franchising, despite some inquiries, because they want to retain control of the brand. Franchising would just dilute their brand, they say.

“The franchising laws here are not as strict as in other countries. Franchisees still have a lot of freedom to do as they please,” says Woo.