Investing in Chocolate

While reading the New York Times last week I finally found the perfect financial instrument for me to invest in – bonds that pay dividends in chocolate. Chocolat Hotel, a UK cocoa grower and chocolatier, is offering ₤2000 and ₤4000 bonds to fund costs associated with the company’s ethical cocoa policy (including healthcare and farmer education). The bonds will pay investors the equivalent of 6.72% and 7.29% respectively in chocolate. These tasty dividends will be delivered in tasting boxes either six times a year for the ₤2000 bond or thirteen times a year for the ₤4000 bond.

After getting over my initial euphoric reaction to this investment opportunity started thinking about positive and negative issues that about this offering.

I do think it is an extremely creative way for a company to seek financing. And whether or not Chocolat Hotel successfully raises their desired amount of capital, this campaign has great marketing potential. It has already increased the company’s exposure in the media. Several online news portals have posted stories about the chocolate bonds, including New York Times, The Independent, Daily Mail, CBC News (Canadian Broadcasting Centre) and Australian Food News. Several blogs (including this one) have commented on the story as well (see links below). The campaign is also creating buzz on Twitter and other social media networks.

The campaign will increase brand exposure among loyal customers. In addition, the campaign might create awareness of the Chocolat Hotel brand among individuals outside the company’s traditional target audience. The international news coverage and social media buzz will increase the company’s brand awareness around the world. This could help the company expand internationally or draw visiting foreign tourists to their London shops.

So, will I buy a chocolate bond? I am not sure. It is not a practical investment for retirement accounts (like IRAs or 401Ks) – I want to eat my chocolate now, not wait until retirement to withdraw (eat) my earnings (chocolate). I could invest money from my savings, but for me ₤2000 a rather large sum to invest without monetary return. That said I will definitely visit a Chocolat Hotel shop next time I visit the UK!