Much loved Melbourne-based raw chocolate and dessert producer Pana Chocolate has taken the leap into mainstream retailers with a launch into Coles this week, however the move has prompted concerns among some of the small businesses that also stock the brand’s products.
Pana Chocolate shared the news with customers on Facebook and Instagram earlier this week. In a post that contained two short videos showing a Coles trolley being filled with various Pana Chocolate products, the company announced there would now be “more Pana Chocolate in more places”.
Speaking to SmartCompany, Pana Barbounis, founder of Smart50 alumni Pana Chocolate, said the deal had been in the works for a while now, and the partnership with Coles is about “making a decision to take the business to the next level”.
“We initially started out of the smaller retail space which has been gradually growing and expanding,” Barbounis says.
“We’ve recently been moving into different spaces through various collaborations, and we’re always looking for different ways to evolve through different channels.”
However, some smaller retailers are unhappy about the brand’s choice to move into one of Australia’s supermarket giants and took to the brand’s Facebook post to express their “disappointment”.
“I manage a small health food store, we can’t compete with Coles pricing, its below our cost price at the moment. We will no longer be stocking Pana chocolate,” one small business owner wrote.
“Very disappointed, we helped you build your company. This is a slap in the face to small business.”
Many of the commenters pointed out the price at which Pana Chocolate’s products are being sold in Coles is lower than the price smaller stockists can sell it for. The brand’s chocolate blocks are currently advertised on Coles’ website for $5 and business owners saying they sell them for $7.
However, the business responded to these concerns on its Facebook page, explaining the lower price point at Coles is a temporary one-week launch special and saying the business still continues to “support local and independent business”.
“We’re really excited that we have been able to grow with your help, and can now offer a healthier alternative to the masses. We still support independent retailers and think this is one step to guide consumers to discover all the other health options on offer,” the business said.
Barbounis says the smaller retail space is “still a focus” for the business, and the expansion into Coles is part of Pana Chocolate’s “overall goal is to make the brand as accessible and available to customers as possible”.
“We’re trying to maintain [the Coles products] with the traditional space, which is a really important consistency for us. Coles is doing the same pricing levels so it will be no different to other retailers, and they’ve been really cooperative in negotiating with us,” he says.
“The numbers so far have been phenomenal and so has the feedback.”
Barbounis says the overall goal is to turn Pana Chocolate into a household brand but it’s important that the brand not lose sight of what it’s “all about”.
The business has grown quickly since Barbounis founded it in 2012 and now operates its own retail stores, as well as supplying stockists. In 2015, it was turning over more than $5 million and had 40 employees in its team.
“I remember when I delivered to our first 22 stockists from the back of my Vespa, and now we have over 4000 stockists and I still ride that original Vespa,” Barbounis says.
“I want to be always moving forward and taking the brand to the next level. We’re looking for growth as a brand because we want to be around for a long time.”