Friends Matt Schnarr, Dan Tzotzis and Adam Deremo worked together at global giants Kraft Foods and Pepsico and left in 2012 to set up Awake Chocolate in Canada in August that same year.
Rocky start at caffeine
The brand was introduced into the US in 2013, but arrived at a sensitive time; just as Wrigley pulled its Alert caffeine gum and the Food and Drug Administration (FDA) launched an investigation into the effects of caffeine on children.
“The whole development was not good for Awake,” founder and managing partner Adam Deremo told ConfectioneryNews. “It definitely delayed a lot of distribution progress we were making.”
However, he said retailers were now more open to caffeinated confectionery products. “We are starting to win more distribution in the last 90 days and that’s a big change to where we were last year.”
US and Europe expansion
Awake has 60% distribution across Canada in corporate trade channels including c-stores and supermarkets. It also has emerging distribution in the US in 8,000 locations, mainly in the North East and mid-Atlantic as well as Minnesota and the South West.
“We describe our product as Red Bull meets Hershey bar, so we want to be wherever you can find these products,” said Deremo.
He described the US as the company’s priority market, but said that in time Awake would be a global brand.
“Europe would probably be the first place we’d look to expand beyond North America. There are a lot of cool and interesting products developed in Europe and a lot of European consumers are forward thinking.”
“If resources were not a constraint, we would try and launch in Europe immediately, but we’re forced to work on North America for now.”
College students: The learning curve
The company plans focus on increasing distribution at stores on US University campuses after proving popular among students.
“College and university students tend to be very busy people and they have a need to have products that make them more productive,” said Deremo.
He said this Millennials age group grew up with Red Bull, so understood the Awake concept well.
Each Awake Chocolate bars contain 101 mg of caffeine. The company arrived at the dosage with the guidance of Health Canada, which says the minimum level to claim the benefit of caffeine in foods is 100 mg.
“We selected the lowest dosage serving to still claim a functional benefit,” said Deremo.
'Our product is very specifically not directed at kids...The youngest consumer we’re confident marketing to is a college student of 18 years old,' says Deremo
The FDA says that for healthy adults, 400 mg of caffeine a day - about four or five cups of coffee - is not generally associated with dangerous, negative effects. It has not set a level for children but, but the American Academy of Pediatrics discourages caffeine consumption among children
“Our product is very specifically not directed at kids,” said Deremo. “The youngest consumer we’re confident marketing to is a college student of 18 years old.”
Awake uses encapsulated caffeine to supress the taste. It currently faces little competition. US firm Rocket Chocolate produces caffeine chocolate with 42 mg per piece, while German brand Scho-Ka-Kola produces chocolate with roasted coffee and kola nuts.
Awake Chocolate comes in two flavors: milk chocolate and milk chocolate caramel and in various formats, including bite-sized share bags.
NPD in the pipeline
Deremo said that the company was listening to feeback from social media followers and was currently developing a dark chocolate version, expected for 2015.
Awake Chocolate is produced by a contact manufacturer in Montreal,Canada. Deremo said that the contract producer had enough capability for the demands of Awake for the near future.