Two Years Later: How Has Brexit Affected UK Craft Chocolate Makers since 2020?
Brexit happened exactly 2 years ago.
On January 31, 2020 the United Kingdom officially left the European Union after 47 years. For the trade of physical goods like chocolate, this drastic change translated to new border formalities, additional bureaucracy, unexpected costs and taxes, unbearable shipping delays and a drastic reduction in exports to EU countries. If this incredible economic and political change wasn’t enough, the eruption of a global pandemic followed only two months after.
How were small-scale craft chocolate makers in the UK affected?
From left to right: Solkiki Chocolatemakers, Dormouse Chocolates, Lucocoa Chocolate, Luisa’s Vegan Chocolates.
Four craft bean-to-bar chocolate makers from the United Kingdom answer the following questions about the effects of Brexit on their businesses: Iris and Bob from Solkiki Chocolatemakers in Dorset; Karen and Isobel from Dormouse Chocolates in Manchester; Amarachi from Lucocoa Chocolate in London; Isabella and Luisa from Luisa’s Vegan Chocolates in Nottingham.
1) How has Brexit affected your local/national market sales?
Dormouse Chocolates: “I would say it hasn't that much luckily. However, one negative impact we have found is that prior to Brexit we were importing bars from other makers in Europe to sell in our shop and now the logistics and minimum orders involved mean that this is no longer viable which has had a negative impact on the choice we can offer to our customers. We have tried to balance this by bringing more UK makers into the range that we stock which is great, but we miss our European bars!”
Solkiki Chocolatemaker: “Brexit delayed all of our cacao shipments. We are the only UK sellers of Maranon's Fortunato No.4 and Salazar's Costa Esmeraldas cacaos. We supply a growing number of other makers with these exclusive cacao beans. Brexit delays impacted our chocolate making and the work of several other British makers. We were also unable to supply all our chocolatier partners with all the couverture they needed as promptly as usual.
We now plan for surprises and keep a healthy cacao reserve in stock to avoid delays in future. Furthermore, all ingredients, machines and machine parts imported to the UK have become more expensive as a direct result of Brexit - new fees, tariffs, paperwork, dedicated agents and initially in terms of lost earnings.”
Lucocoa Chocolate: “Locally and nationally there hasn't been too much change in sales because of Brexit.”
Luisa’s Vegan Chocolates: “Brexit has not affected our local/national market sales.”
2) How has Brexit affected your international market sales?
Dormouse Chocolates: “At the moment we have had to pause all wholesale into Europe which is very frustrating. Luckily we have still been able to send orders to our stockist in the US (the lovely Bar and Cocoa). We have also had very limited success sending orders directly to customers in Europe, and even packages where we have had the customs forms checked by the Post Office prior to sending have been returned to us. As a result of this we have also stopped selling directly to customers outside of the UK, even though we hate letting people down!”
Solkiki Chocolatemaker: “Brexit stopped all European sales for us. Business and private customers were faced with paperwork headaches, unpredictable deliveries (between 3 days and 3 months!) and additional fees. For the first nine months following Brexit, we felt it would never improve.
There was fear and caution from those in Europe, chaos at customs and changing rules. In a few instances we needed to provide a certain form for clearance, but nobody knew what the form was! We are recently seeing improved confidence from European buyers. We are familiar with the new ways of working with European customers and we have seen a lot of renewed interest from European partners, the familiar and the fresh.”
Lucocoa Chocolate: “Prior to Brexit we were selling wholesale and retail globally. Selling within Europe was simple: with only an additional form to fill in, there was very little difference from sending products within the UK. As soon as Brexit happened I think two things happened. First, a lot of businesses that had never shipped outside Europe previously needed to get their head around the amount of paperwork needed. Second, there has been a willingness for some counties to hold items within customs, almost like a punishment. Getting orders to Italy after Brexit can take longer than one month, whilst sending to USA can take a couple of weeks for retail and a day for wholesale.
We had a customer who had ordered online (once we switched international delivery back on). We sent his order to Italy and as always, just like before we switched off the international delivery, it was taking a LONG time to arrive. They contacted us and we tracked it to Italian Customs. The customer was so pissed off that they called someone their side, shouted at them and as if by magic, their order arrived the next day. When they told us, it really made me believe that there has been some deliberate delays in processing through customs.”
Luisa’s Vegan Chocolates: “We've stopped trading outside of the UK due to massive surges in custom taxes, stoppages at borders and consumers concerned about extra costs on top of online purchases.”
3) What was the biggest threat to your business caused by Brexit?
Dormouse Chocolates: “The delays at the border when importing beans. While some orders have come through really quickly, we had a 3-month delay on one origin. This means we're not taking anything for granted when it comes to shipping now and are hoping to increase the number of origins we use in 2022 so that even if one is missing from the lineup we can still offer a wide range.
There is also the impact of electricity pricing and regulations changing now we've left the EU. We won't know how much it will affect us until later in the year when our fixed price tariff ends, but we know we'll be facing increasing day to day energy costs.”
Solkiki Chocolatemaker: “The biggest threat Brexit caused us was the tariffs. Paperwork and delays are tolerable with planning, but paying more to import amazing ingredients, then paying more again to export our chocolate is a serious threat. While we consider £10 for a bar of World Class chocolate to be a bargain, ultra fine chocolate is generally seen as an expensive option for the uninitiated that we hope to convert. Brexit makes U.K. craft chocolate more expensive and less competitive.”
Making craft chocolate in the United Kingdom is more expensive after Brexit.
Lucocoa Chocolate: “We lost all EU stockist accounts, but the biggest threat is the rise in costs to import raw ingredients to the UK. This coupled with an international rise in shipping cost could really see many chocolate makers revising their growth plans. Take for example shipping beans from Amsterdam: prior to Brexit, this was as simple as putting it on a truck and having it delivered to our factory in London within a week. Now, I expect up to 3 week delay and a fat freight bill at the end of it.
With Covid, everything is just that bit worst. It really does make you wonder how long this will go on for and if chocolate makers can out do it. I just ordered some coconut sugar yesterday. I was sent the invoice and I nearly screamed! How do you justify a £1/kg increase? When asked why....Brexit. Also paper cups, which we use in our shop on a Saturday for hot chocolate, doubled in price from just 12 months ago. Why? Brexit again! There is only so much you can pass onto your customers.”
Luisa’s Vegan Chocolates: “The biggest threat to our business was the loss of the European market. However, compared to other businesses, we still work on a very small scale and mainly in the UK anyway. The main issue that has affected our business is Covid. For example, containers have gone up dramatically! And unfortunately Covid has started to hit the most remote locations where we source cacao beans.
Plus, the Solomon Islands have unfortunately had lots of political disarray due to the government selling off land to China, so there's been lots of rioting and arson. This has caused the farmers to panic and sell off their beautiful prized bean stock quickly at commodity prices for cocoa pressing! What a terrible shame!”
4) What was the biggest opportunity for your business brought about by Brexit?
Dormouse Chocolates: “I feel like we've always had good communication with fellow makers but there's now increased communication and collaboration as we try to navigate change and share information. I think joint shipments of items coming from Europe will become even more common. Every pallet we imported last year was in collaboration with at least one other maker which helps everyone with costs. Suppliers also encourage this and try to connect us all, it was great to see Albert (Crafting Markets), Jeanette (Silva) and Dejan (Biji) come over to November's Cocoa Runners event to catch up with makers and discuss issues like this.”
Solkiki Chocolatemaker: “The biggest opportunity from Brexit - Cacao sales. We have practiced importing from origin and from Europe and have shared our cacao since 2015. We have seen growth in chocolate makers, both new and old, purchasing increasing volumes of cacao from us. The cacao itself is awarded and used by us to make our awarded chocolate.
Since it is already in the UK, other makers appreciate a headache-free, tariff-free, quick delivery of ultra-fine cacao in quantities large and small from acclaimed direct-trade makers. No middlemen. Serious expertise in what we offer. Brexit has encouraged more makers to use our trusted cacao and this demand immediately impacts our partners at origin. In this sense, Brexit has given a boost to our cacao farmers (higher income) and our fellow makers (great cacao). We're proud to oversee both ends of our very short chain.”
Lucocoa Chocolate: “To be honest, it has allowed us to look at countries further afield.
Whilst Europe is still working out how to deal with the UK, everyone else is trading like normal. Also, and I'm ashamed to say this as a past Project Manager prior to being a chocolate maker, I plan better now: I buy in bigger bulk and that's ok as that means that we have these freight charges once or twice a year rather than 3 or four times a year.”
Luisa’s Vegan Chocolates: “Brexit has done us absolutely no favors at all!”
5) Have you revisited your marketing and distribution strategies after Brexit?
Dormouse Chocolates: “Flattered that you think we have a marketing strategy and we're not completely winging this! In all seriousness we're focusing more on how we're doing nationally. We're really fortunate that our reputation also means we attract international interest and we're still looking at more effective means of international distribution.”
Solkiki Chocolatemaker: “We don't have any marketing budget so there's been no change there. We rely on word-of-mouth to survive. We have always come from a position of direct trade via a very short, transparent chain. We've dealt with chocolate distributors in Europe and Asia previously and the relatively quiet Brexit period gave us opportunity for reflection. In the spirit of direct trade and craftsmanship, we decided to stop working with distributors for now.
Our experience is that distributors want low cost and high volume. We don't want to pump out large quantities at the expense of quality. We appreciate the freedom to explore and push boundaries, while we value quality and take time to keep the fun and passion in Solkiki. Brexit hammered demand, but gave us time to think and has also increased costs making direct trade more important than ever.”
Lucocoa Chocolate: “Yes, we are in a state of flux right now. I don't know how long this will last but I think it’s a wise thing to do to look at your marketing and distribution strategies often. It can be hard, as so much is moving all the time, but when the survival of your business is on the line you really don't have a choice.”
Luisa’s Vegan Chocolates: “Yes: we no longer put any focus on selling to the EU, and purely focus on the UK.”
While increasing national sales and strengthening a sense of community among UK craft chocolate makers, Brexit has unfortunately lowered the exports and the overall presence in Europe of UK craft chocolate brands that are now looking elsewhere to avoid exhausting regulations, skyrocketing costs and tiring delays.