From rural Hamilton to the world stage: Waikato Valley Chocolates eyes China

When Waikato Valley Chocolates first began, its home was an old creamery on the north-eastern fringes of Hamilton, surrounded by what was then rolling green pasture.

There it grew and flourished, with hard work by loyal staff and plenty of old-fashioned number eight wire initiatives - in-house development of equipment like steel tables and roller systems and homemade cooling tunnels.

But 22 years on and the building – parts of which were 80 years old – was in need of some pretty serious maintenance work. Nor was it large enough to store all the products it produced. So, while that building still remains on the corner of Horsham Downs and Borman Rd, beside all the roadworks going on to create the Hamilton section of the Expressway, the business has moved.

The factory has been operating for 18 months now in a brand spanking new building in the Northgate Business Park at Horotiu – just a two-minute drive to the Expressway. Fittingly, amongst the latest automation and shiny, high tech plant are two old copper pans that came over from the old creamery. Fifty-odd years old, they still do just as good a job as the new, stainless steel variety.

And while the new factory is everything the business needed and more, there was one wee hiccup that general manager Jeff Andersen pointed out during a tour of the plant. It’s good see they’re still using Kiwi smarts to figure out an innovative temporary fix to ventilate hot air off a chiller unit in a corner of the factory.

That number eight wire thinking has served the business well as it heads towards its 25th birthday next year.

Waikato Valley Chocolates began as a joint venture in 1994 between directors Hans Vetsch (based in Hamilton), Michael Razey (Tauranga) and Nat Craig (Dunedin) and retail giant The Warehouse. Its primary purpose? To supply The Warehouse stores with chocolate products.

Today, that’s still the case but they’re also looking to diversify their offering and to export.

Jeff said the business spends almost the entire year producing stock for Easter – moulded products like eggs and bunnies.

“Wemanufacture more than 5 million Easter eggs and bunnies every year – more than one for every person in New Zealand,” he said.

The largest manufacturer of Easter eggs and bunnies in New Zealand, WVC despatches around 60 truck and trailer loads of Easter products each year.

And those copper and stainless kettles spray chocolate onto hundreds of thousands of nuts annually. In fact, to be precise, WVC manufactures more than 100,000kg of scorched almonds and other chocolate coated products annually.

But alongside all the products they churn out for The Warehouse, WVC also manufactures for other companies of varying sizes.

“We will chocolate-coat 10kg of macadamia nuts for a small local producer through to producing tonnes of product for large snack and breakfast cereal companies.”

About 70% of what WVC produces is destined for The Warehouse stores around the country, but that other 30% has been growing over the past five years.

“Our first priority is to look after key customer and main shareholder – The Warehouse, but we’re also expanding the business outside of that.

“It’s about spreading the risk for us and there are opportunities in New Zealand to do that,” Jeff said.

“And we’re intentionally making in-roads into non-traditional markets for us.”

So, what does that look like? Well, they’re importing confectionary to expand their offering to other retailers around New Zealand. There are good leads and orders and keen interest from some key retailers. Jeff can’t talk specifics about that right now, but he has huge confidence in the future direction of the business.

And there’s the export market. They have exported Easter products to Australia previously, but that’s a tough gig thanks to the cut-throat pricing imposed there by the big supermarket chains. They haven’t ruled out further opportunities there, but stocking supermarket shelves won’t be their focus.

They work with a New Zealand agency to get their products into the Pacific, but the big opportunity for WVC is China.

NZ Trade and Enterprise and the Waikato Chamber of Commerce have helped them forge links to the right networks and connections to start conversations both here and overseas. 

And The Warehouse, with an office based in Shanghai, is proving useful for connections as well.

“So, there are a few avenues we are pursuing in China,” Jeff said.

Those avenues are the higher end of the market where buyers are health conscious.

“They don’t like sweet chocolate…unlike Kiwis who seem to go with milk chocolate. They’re looking for products that aren’t high in sugar and have other attributes as far as health goes.”

The market there is so huge that you only need a very small portion to make an impact.

For now, Jeff is happy with the capacity and capability that WVC has, but in the move to Horotiu, future-proofing was given consideration and so there is room to expand the factory if they need to.

And the Horotiu site was the one that stacked up after they considered a move further north.

“It was so much more attractive cost-wise to stay around here. We’re 200 metres from the expressway and that’s going to be even better once that’s finished. 

“We have a really good staff base, we have access to additional short-term staff when we need it. It’s easy to find people who are willing to work who are of a good standard. Staying here in the Waikato meant we could keep good loyal staff around.”

WVC employs 35 permanent staff and they bring on an additional 12 for six months to help crank out all the Christmas and Easter stock. Two of the permanent team have been with the company since its inception. 

But what barriers are there to doing business here for WVC?

The only thing is something that was, originally, self-imposed. But no longer.

“We’ve flown under the radar as a brand, we haven’t put ourselves out there really,” Jeff said.

“That was a conscious decision. Now there’s been a change in direction and we do want to be out there amongst it and we think we’ve got a good story to sell. It’s a New Zealand-made product, a New Zealand-owned company. We use local products where we can.

“With issues around the likes of Cadbury pulling out of manufacturing here in New Zealand, there is appetite among Kiwis to purchase products produced locally by a New Zealand company.

“That’s why the likes of Whittakers do so well – and they have a great product. It certainly stacks up against imported brands.

“We won’t ever compete against them with chocolate bars but there are other products that we can stand on our own two feet with and compete at that level.”

With plans to tap into the high-end Chinese market and expansion of its offering locally, it seems this humble Kiwi chocolate manufacturer really is about to start punching above its weight.