Sweet sucess made in chocolate heaven

Sweet sucess made in chocolate heaven

After a series of ‘miracles’ shaped the early progress of his chocolate empire, Algimantas Jablonskas now has faith in his plan for globalisation. Linas Jegelevicius met Lithuania’s answer to Willy Wonka.

If a God of chocolate exists, then Algimantas Jablonskas is his servant on earth.

Only heavenly influence explains the lucky accidents that led the Lithuanian businessman behind the award-winning AJ Šokoladas chain to dominate the Baltic ‘craft’ or hand-made chocolate market. Now, after a career proving that there is no such thing as failure to the true entrepreneur, this late-blooming Willy Wonka is laying the foundations of an international chocolate empire.

Founded in 2003, Jablonskas’s company AJ Šokoladas employs 60 people and now has six gourmet ‘chocolate restaurants’ – essentially up-market cafes – five in the Lithuanian capital Vilnius and one in the historical beauty spot of Trakai. He also oversees six Lithuanian franchises - two in Kaunas, one each in Klaipeda, Šiauliai, Anykšcai and Mažeikiai, and has supply deals with four others abroad, in the UK, Belarus, Russia and Poland. All his business planning is now focused on London, the springboard to intended globalisation of the brand.

The twice married Jablonskas (48), who shares the devout Catholic upbringing of many Lithuanians, certainly feels he has been looked after, during a roller-coaster commercial career. “There have been many miracles in my life. Without them, I wouldn’t be where I am today,” he says.

Although no longer attending Mass, every year he squeezes in a week’s stay at a monastery, as a gesture of gratitude for his entrepreneurial survival. It has not been an easy ride, he laughs, but he has “managed to keep my head above water.”

It has been a colourful CV. Jablonskas has been a fish merchant and trawlerman off the African coast, traded in Chinese raccoon dog fur and helped construct a bank in the Russian exclave of Kaliningrad. But he left all that behind, he says, when he found salvation in the seeds of the cacao tree.

Chocolates1“Chocolate has given me inner solace, it has been my steady breadwinner and furthermore, chocolate has completed the cycle of lucky chances in my life,” he says modestly. “It’s not an especially high-margin business, but it’s a decent living.”

Over the past decade, AJ Šokoladas’ turnover has grown ten-fold to €1.2m, with expectations of 10-15% annual growth for the next five years.

As well pioneering a new kind of high-end cafe experience, Jablonskas has skilfully managed the seasonality of the retail market, with constant innovation, introducing chocolate cocktails, chocolate teas and other novelties.

“Taking advantage of my sensitive taste buds, as well as a background in food technology, I created unique home-made chocolate ice-cream recipes, flavoured with natural berries, which have been hot sellers here,” he says.  
Even the crash of 2008 which left many Lithunian entrepreneurs in dire straits, has played out well for AJ Šokoladas.

“The crisis was a blessing for us,” he says.  “Even I didn’t expect that with many tight-walleted people, reeling from a downturn that knocked 14.7% of GDP we would survive. I thought they would pass by other stores in Vilnius’s Old City, but instead they would stop by for a chocolate truffle or a slice of our signature cherry chocolate cake.

“Stressed out people needed stimulating luxuries – and aphrodisiacs! We offered them top quality at a reasonable price,” he says.

Just as significantly, with many up-market businesses unable to pay the high rents in the most exclusive and picturesque parts of Vilnius, AJ Šokoladas was able to take over the premises by signing long-term contracts on what now seem crazily favourable terms.

“If somebody had told me five years ago that I’d be running spacious, interior-designed chocolate restaurants in the most expensive locations in Vilnius, I would have laughed it off.”

Sitting amid the mouth-watering scents in one of these genteel cafes, Jablonskas reflects on a career whose surroundings haven’t always been so fragrant.

“My first job at 19 was as a cleaner and watchman in Kaunas back in the mid 1980s. As I needed to support my family [he married at 20 and now has five children], I was working flat out to earn as much as possible. For the hours I worked I was paid nearly 300 roubles [the equivalent of about €1000], I earned twice as much as some of the staff I was cleaning up after. I really couldn’t keep up that pace now.” Even as a cleaner he was determined to be more than average, inventing a new kind of broom with twig extensions to improve efficiency.

Naturally gregarious and hardy, he caught the eye of management at the local factory café and was offered the chance to manage it.

“Ability to innovate has always been my strongest quality,” he says.

“I saw how badly the coffee-maker worked, and took it to pieces until it churned quicker and made tastier coffee,”

When the cafe job ended, Jablonskas saw a world of opportunities. But which to take? This is when the God of chocolate first tapped him on the shoulder.

“As I’d always been fond of chocolate, it occurred to me on the threshold of Lithuania’s breakaway from the Soviet Union that we had very few varieties and brands of chocolate in our shops.”

Armed with an introduction to a Russian chocolate factory czar, he headed to Moscow. Unfortunately – or fortunately as it turned out –  he got lost in the city’s sprawling suburbs, and found himself at a smaller scale operation.

“I asked a passerby for directions, instead of being directed to the left, where the factory I was looking for was, I was wrongly guided to the right, where there was a small manufactory of chocolate-coated zephyrs [traditional flavoured marshmallows],” he recalls.

This misdirection proved auspicious. Having met the zephyr maker, he correctly gauged the explosive demand back in Lithuania for these sweet mouthfuls, and became a main supplier to Lithuanian supermarkets and grocery stores. Zephyrs hit the big time in Lithuania and his canny construction of a distribution network earned him “piles of money”.

Or at least it did until the early 1990s, when the knock-on effects of the Russian economic crisis caused the business to crash. Jablonskas had to find a new line, and thought he might have found one when some Chinese businessmen in Moscow persuaded him, bizarrely enough, to buy up raccoon dog furs low in China and sell them high in Russia. It seemed a good idea at the time, he grins, but it appeared the Chinese had been less than honest about the expected margins. The business made a loss.

Another venture involved hauling cooking oil to Lithuania from Kaliningrad. That didn’t last long either, nor did one that involved buying up herring and hake in the Russian exclave and hauling it back to Lithuania. And while he was doing that, a local banker asked him to construct a new bank building, which of course he did.

“The money he offered was insane, and I could not decline the proposal. From today’s standpoint, it sounds very adventurous, but it reflects how crazy things were at that time.” This led Jablonskas into a booming construction business in Kaliningrad but that too ran into the ground during the next [2002-2004] Russian financial crisis.

Next came a restaurant business in Lithuania- in which he invested nearly €300,000 in a prime property in in the old part of Kaunas, Lithuania’s second sity, followed by a couple of restaurants in Vilnius. It didn’t last. Jablonskas now admits he got the high-end concept wrong.

“Any business is kind of an adventure, and being adventurous is what makes a good businessman. But the best are those who having ended up on the brink of collapse and misery, rise up just to meet a new challenge. That’s me really. But I am blessed to have always had my guardian angel looking out for me.”

Chocolate came back into his life via a chance TV viewing of the 2000 art-house film romance Chocolat, starring Audrey Tatou and Johnny Depp, about a woman who causes a stir by opening a chocolate shop in a small French village.

“It had left a huge impression on me. When soon thereafter I went to Brussels, to get ideas for my planned new bakery business, the movie kept popping up in my head.

Somebody suggested me visiting Belcolade, a leading chocolate factory nearby,” Jablonskas remembers. “I really felt mesmerised, and completely at home, I surprised the Belgian bosses by asking if I could make something myself with the ingredients they had. They let me mix up some chocolate mixture right on the spot. I remember I made a candy that made the factory staff drool. It was my first effort, but I guess God was directing me.”

Belcolade, part of the giant multinational Puratos Group (turnover around €1.3bn) is now the company’s wholesale supplier of ingredients.

“I consulted friends whether they thought a chocolate shop in Vilnius could succeed. Only a few of them thought it stood a chance.”

His small chocolate factory opened in Trakai, a picturesque town 20km from Vilnius. It was there he started producing hand-made elaborately-designed gourmet chocolate chips, truffles and other confectionary, originally supplying a new chocolate shop in Vilnius Old City. The business took off, and the Belgians even allowed me to launch their branded line there.

“I managed to grab some new moderate-priced sites in great Vilnius locations. I bought state-of-the-art production line equipment at a good price. Then I stumbled upon a leading interior designer who worked their magic on the premises. For the first time in my career as an entrepreneur I started feeling that things were falling into place,” Jablonskas said.

After a lifetime of ducking and diving, Jablonskas has amassed a network of contacts, and he still receives many business proposals.

“I decline all of them, no matter how promising. I’m keeping my hands in the chocolate mixing bowl until the end of my days.”

What’s next? He plans to head up the quality scale, by enriching AJ Šokoladas chocolate with 71% cacao. This would allow it to compete with the best quality chocolate around. Interestingly, he has not jumped onto the ‘fair trade’ bandwagon, and does not seem to use ethical provenance of the beans to enhance the AJS brand.

In fact the provenance question – increasingly fashionable in the chocolate world – doesn’t seem to engage him, short of his saying he “fully trusts” his “reputable” multinational supplier to do the right thing. As for the business expansion, Jablonskas has set his sights on London.

“I really want to open a chocolate restaurant in the UK’s capital - in one of its most bustling streets where millions of passers by stroll past. I can feel it would be a success.” How soon he can launch this venture depends on the progress of a finance package, his previous agreement fell through in 2011 when the Lithuanian bank Snoras went bankrupt. After an entrepreneurial life that has seen more than its fair share of success and failure, we can trust Aligimantas Jablonskas not to be deterred by such accidents. We can also trust him to know a winner by now.

Carrying the torch for an age-old industry

Industrial production of chocolate in Lithuania goes back to 1886, when a local Jewish entrepreneur, M. Abramson, founded the first-ever chocolate and confectionary factory in Vilnius. The history of the oldest candy factory still in operation dates back to 1913 when a 36-year-old Lithuanian entrepreneur Antanas Gricevicius installed a caramel-boiling boiler in a wooden hut on the outskirts of Šiauliai city in the north of the country.

Contrary to the-then prevailing fashion for affixing foreign names to local goods, Gricevicius wanted to underscore the Lithuanian provenance of his products by calling the shop Ruta which means [the medicinal herb] rue. In 1940, the factory was nationalised by the Soviets, but Gricevicius’ heirs managed to reclaime it after Lithuania broke away from the USSR in 1990.

The other big name in Lithuanian chocolate Pergale was founded in 1952 and was famous during the Soviet-era for its chocolate sweets Raudonoji Aguona, (red poppy). Pergale is still in operation introducing 10-20 new chocolate lines every year.

At the other end of the spectrum to AJ Šokoladas, the largest contemporary chocolate maker in Lithuania is AB Kraft Foods Lietuva. It was established in 1993 by the global food giant which has owned the famous UK brand Cadbury since 2010, along with many other household names. The investment was one of the first significant foreign ventures in post-Soviet Lithuania.

Kraft’s Kaunas-based factory employs nearly 700 workers and exports approximately 70% of the chocolate. The most famous chocolate brands include Milka, Karuna, Manija, Princas.

Besides, the factory makes popular Jacobs coffee. In 2012, in an undisclosed acquisition deal, Mondelez International acquired a major stake in Kraft Foods Lietuva.