Ex-Chocolaterie Bernard Callebaut chief starts over with Papa Chocolat

He is an exotic creature in Calgary - a Belgian chocolate maker amid the oil and gas tycoons. But over three decades, Bernard Callebaut became a symbol of the city's growing wealth and sophistication as he built a premium brand that resonated far beyond his adopted hometown. It all came crashing down in 2010 as Chocolaterie Bernard Callebaut fell into receivership and its assets were sold to a group headed by a former employee. Having failed in his bid to buy those assets, Mr. Callebaut is starting over with a new venture, Papa Chocolat Inc., but must contend with an established rival - his old company, which still bears his name.

Do you come from a chocolate tradition?

I was born in the chocolate business. My family has been making chocolates in Belgium since 1911. We are the old owners of the Callebaut chocolate factory, but the family sold it in 1980 [to form today's large chocolate company, Barry Callebaut] That's when I decided to come to Canada [in 1982]and start my own business just like my great-great-grandfather did.

Why Calgary?

I love mountains. I come from a flat country. And when you do a move of 7,000 kilometres, you want to live in a place where you can eventually bring your children up. There is still a tremendous amount of opportunity here in the West.

In my travels, half my suitcase was always clothing and half was chocolates and I kept giving samples away. When they tried my chocolates, people were very enthusiastic here, and it was close to the mountains, so I didn't have to put much thought into it.

But 30 years later, you lost the business that you built here.

We did a couple of risky moves. One of them was buying a big piece of real estate. I shouldn't have done that, but, you know, that's after the fact. Now, I will be more conservative in my management style - including my financial management. I won't focus on the growth so much, but more on the quality.

And, ultimately, we are in the brand business. I'm a strong believer that once you build a brand that is synonymous with good quality, there is a tremendous value in that. When you have that, you can grow - the sky's the limit - but you have to be patient in the beginning and take time to get it going.

But wasn't quality a top priority the first time around?

It was, but we had an organization that was structured as a dealership, and when you have a dealership or franchise organization, there are restrictions in what you can do. Now, I want to be in control of where the product goes and how it is presented. I want to be in control of everything related to quality.

At the peak, we did $14-million in annual sales from head office, and the retail locations combined did about double that.

With the real estate, didn't you follow an old Alberta pattern - you bought at the top of the cycle?

That is absolutely right, but it was not only that. The recession affected us, too. Ultimately, we came out of the crazy years of 2007-2008, and we were down 10 per cent in sales. That wasn't all that bad. But there was a perception from the public that we were closing down the factory.

It came out through a media article because we had put staff on temporary leave. After the recession, we decided not to lay them off but keep them on temporary unemployment through a government program. The perception was we had closed the factory and our sales dropped 15 to 20 per cent. There was a whole range of things that, put together, made it difficult for the company to survive.

If the bank [Alberta Treasury Branches]had been patient through Christmas, 2010, we would have paid every single supplier. But ATB was not willing to wait, and they pulled the plug on us in August, 2010. We had 28 years of track record, and we knew that in November-December, we generate 35 to 40 per cent of our sales.

But how can you compete now against your own brand?

We made a mistake years ago when we put the trade name 'Bernard Callebaut' into the business itself. It was a very big mistake that it was not kept with me personally.

People have asked me how it feels. In the beginning, it felt strange [going up against my own name] but now, it's just a different competitor. But has a journalist ever asked the man who now heads Chocolaterie Bernard Callebaut, 'How do you feel about the fact you have the name, but you don't have the guy?' Ultimately, the luxury brand business is a passionate game and you love it. You just don't buy passion and love from the shelf. It is very unusual, when you buy a business that is quality oriented and depends on one individual, not to bring that individual on board. But that is their decision.

How did you come up with the name Papa Chocolat?

My children are 2 and 7, and they call me Papa. When it was first proposed, I said the people will not see the connection to me. At first, we were first thinking of Bernard & Sons, or something like that, but ultimately our lawyer advised not to do that because our former company owned the trade name Chocolates by Bernard. So we dropped it.

There was already a lot of confusion because our former company in Belgium, Barry Callebaut, has a factory in Quebec and sells its goods in some grocery stores. So the decision to call it Papa Chocolat was good in the end, because it is totally different.

My main mission in the next couple of years is to let the public know that Bernard Callebaut is actually behind Papa Chocolat, not behind the old company. I do a lot of trade shows, a lot of public speaking. People see I am at Papa Chocolat because they know my face because I have been on billboards. And my wife has said to investors, 'Wherever Bernard goes, that's where the trademark goes. He is the brand.' At 57, aren't you old to start all over?

I am all pumped up to get going again. I am like a racehorse that, just before the race, is banging the sides to get out. I am eager to start over with fresh ideas. I have learned from my mistakes and won't repeat them. Even if it is difficult for the next two, three years, I have learned if you do quality, people remember that. The support of the public is amazing.

You were fined $150,000 for contempt of court for removing items from the company when it was in receivership. What was that about?

I took packaging that was outdated from previous seasons or packaging that had my signature. Ultimately, they own my name, but they didn't own my signature. We never used it ourselves [at Papa Chocolat]because we created our packaging from scratch. It was like a knee-jerk reaction. Rethinking everything, I shouldn't have done it.

I was advised to appeal the fine, but my wife and I said appealing is putting your energy into a lot of negativity. We said let's concentrate on building the business.

Weren't there also moulds that you took?

There were moulds, but the value was very minor. They were never used for commercial purposes. They were once used for a promo. The value was minimal, $1,000 to $2000 worth of moulds. I returned all that stuff. The fine was way out of proportion to the value.

Do you intend to make a splash at this year's Calgary Stampede?

We will make some chocolate cowboy hats, for sure. But ultimately at Stampede, people are more focused on partying, and that's okay.

Bernard Callebaut

Title: Majority owner, Papa Chocolat Inc., Calgary

Personal: Born in Wieze, Belgium; 57 years old

Education: Trained as electromechanical engineer

Career highlights:

- Spent early career in family chocolate business in Belgium

- In 1980, Callebaut chocolate factory sold to Swiss-based Interfood

- In 1983, he launched Chocolaterie Bernard Callebaut in Calgary

- In 2010, company placed in receivership

- In 2011, Papa Chocolat opens for business