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Local chocolate firm leads organic pack: Endangered Species enjoys soaring sales, employment

December 17, 2007

While Hershey, Pa., may be considered the chocolate capital of the United States, Indianapolis is home to one of the fastest - growing and most fascinating makers of the sweet treat.

Though it was founded in Oregon in 1993, Endangered Species Chocolate Co. has achieved most of its growth since being acquired and transplanted to Hoosier soil in 2005 by Wayne Zink and Randy Deer.

Curt VanderMeer joined the company shortly after it came to Indianapolis; he became the third co-owner in March.

Since moving from its cramped 5,000-square-foot Pacific Northwest facility to its 43,000-square-foot home in Park 100 business park on the northwest side of Indianapolis, Endangered Species Chocolate has grown annual sales from $3 million to $16 million and its work force from 18 to 60.

The candy maker, which uses 250,000 pounds of chocolate a month to make its products, is the No. 1 seller of organic chocolate treats, according to several industry sources. Its products have long been stocked at natural-foods stores such as Wild Oats and Whole Foods.

More recently, the company's confectionaries, known for wrappers illustrating animals on the brink of extinction, are showing up alongside Three Musketeers and Mars bars nationwide in places like Albertson's, Kroger, Marsh and Target.

"Sales are really taking off now," Zink said. "We're aiming for $50 million in sales by 2012."

But at Endangered Species, it's about more than grinding out higher sales and profits. Education and environmental conservation, Zink said, are central to the company's mission.

On the inside of each wrapper is the story of the endangered species on the cover.

"This is a company committed to making an organic and healthy product that is easy on the environment and made with fair-trade, sustainable practices," said Dan Bolton, editor of Natural Food Network, a California-based publication covering the organic- and natural-foods market.

Chocolate good for you? That's right, said Zink and other all-natural chocolate advocates. Chocolate can have high concentrations of cocoa, which has been identified as a good source of disease-fighting antioxidants, Bolton said.

Endangered Species bars consist of 52-percent to 88-percent cocoa, while a standard Hershey bar contains 27-percent cocoa, industry experts said.

Consuming antioxidant-rich foods has been identified as a way to fight illnesses ranging from the common cold to cancer.

Cocoa actually has far more antioxidants, according to the U.S. Department of Agriculture, than blueberries, brussels sprouts or red grapes.

Endangered Species seems to have struck a cord with consumers in the sluggish chocolate industry.

"In an industry growing at a snail's pace-about 1 percent a year-organic chocolate is growing by leaps and bounds," Bolton said.

In 2006, U.S. organic chocolate sales grew 65 percent, to $120 million, according to the Massachusetts-based Organic Trade Association, with similar growth forecasted for 2007.

All-natural foods have no artificial colors, flavors, preservatives or other fillers. Organic foods are certified by the USDA as having been grown without the use of pesticides or hormones.

While Endangered Species' biggest competitors in the organic-chocolate sector are on the West Coast and in the Pacific Northwest, Zink and Deer liked Indiana for its central location and distribution network.

While Deer is a Crawfordsville native, Zink moved to central Indiana in 1999 after a career in sales and marketing in Arizona.

Zink previously produced a TV golf show and launched a skin care company, Zirh Skin Nutrition. Zink also owns a Pepsi bottling facility in Logansport.

Deer has been a longtime entrepreneur working in beverage, petroleum and restaurant businesses, among others.

VanderMeer worked in accounting, then as a financial director for a sheet metal company before joining Endangered Species.

One thing that hasn't changed at Endangered Species is its philanthropic mission.

Zink and Deer were instrumental in founding Back Home Again Foundation, a not-for-profit that combats homelessness and supports arts and environmental causes.

Endangered Species annually gives 10 percent of its profit, or $50,000-whichever is greater-to charitable causes, Zink said.

Three of Endangered Species' pet projects are Louisiana-based Chimp Haven, Florida-based Ocean Conservancy, and work in Nigeria installing water pumps and providing school supplies to needy youth.

Endangered Species also strives "to inspire proactive conservation for animals confronting universal struggles such as habitat encroachment, poaching and pollution," the company's Web site says.

But belief in a cause might not be enough to keep Endangered Species growing.

"Competition in this industry is stiff, and getting stiffer," Zink said.

One of Endangered Species' main rivals in the natural, organic category-Oregonbased Dagoba Chocolate-recently sold out to Hershey.

"There are a lot of companies considering getting into this market," Bolton said.

Endangered Species combats competition with a marketing plan aimed at college-educated people-particularly women-ages 24 to 55, who have culinary and environmental interests. Web sites and specialty magazines are the company's advertising vehicles of choice.

The company also has maintained a focus on introducing new products, including five new bars in 2008 featuring a variety of exotic fruits, roots and other nutritious ingredients.
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