Specialty Chocolate Consolidates As Cocoa Costs Keep Rising

The chocolate category is consolidating. Today, branded and private label chocolate manufacturer Chocolate Works announced its acquisition of 150-year-old Thompson Chocolate, which produces specialty and foil-wrapped chocolate novelties.

This marks the second add-on acquisition in the past three years for Chocolate Works, a portfolio company of Insignia Capital Group, as it works to expand its capabilities as a specialty chocolate platform. According to Thompson CEO Steve Gollob, the legacy manufacturer has worked with “some of the most respected chocolate brands and retailers in the world.”

Gollob added that Thompson’s foil wrapping capabilities can be applied to a wide range of formats – well beyond its focus on barks, bars, and an array of differentiated shapes – and noted the packaging type is “unique to the U.S. market.” Gollob previously served as chief revenue officer of upstart chocolate company TCHO.

“We are thrilled to welcome Thompson to the Chocolate Works platform,” said Chocolate Works founder and vice chairman Joe Whaley in a press release. “Thompson significantly expands our private label and co-manufacturing production capabilities and expands our branded offerings, creating new opportunities to deliver exceptional value and quality to retailers and consumers. Steve and his team share our passion for innovation and commitment to exceptional client service.”

Meriden, Conn.-based Thompson will also gain access to Chocolate Works’ platform, allowing it to expand its own offerings with “truffles, cocoa bombs, and enrobed chocolate snacks in a wide range of packaging formats,” Gollob said in the release. Thompson currently employs 90 individuals, operates a retail store near its Meriden factory and produces over 2 million lbs of chocolate each year.

But as cocoa prices continue to rise, more consolidation could be coming to the specialty and craft chocolate category as brands look to build up buying power and hedge against cost increases. Commodity prices for cocoa reached record levels in early 2024 and are expected to remain elevated, (currently $9,233.84 per ton) due to continued climate-related supply chain shortages.

Thompson is regarded as one of “America’s first chocolate companies,” it claims, and had been under the ownership of Jim Lewis, who served as CEO until 2021, prior to its acquisition by Chocolate Works. The company’s founder William Thompson was an acquaintance of Milton Hershey, founder of The Hershey Company, beginning first with a retail candy store in 1879, and later, under the direction of Thompson’s son Charles, Thompson Candy Company was founded in 1934.

The company moved production to its current site in 1973, allowing for year-round production with the advent of air conditioning.

Chocolate Works was founded in 1991 and operates two facilities: one in Freeport, N.Y., and another in Gresham, Ore.; the business was acquired by PE firm Insignia in 2023, joining a portfolio that also includes meat snack maker Tillamook Country Smoker and snack manufacturer Century Snacks.