100th anniversary of Max Felchlin AG Switzerland

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Comment by Clay Gordon on July 24, 2008 at 9:18am

There is obviously a lot more to say about the trip. What really impressed me most, apart from the people at Felchlin and the international distributors that were there, was how they've transformed themselves from a sleepy family company into a business that does business - and can compete - internationally.

The original Felchlin family business was making kirsch. When Max started his business it was as a honey importer and he sold his honey to confectioners which led to making products for confectioners. Max started making chocolate in the 1930s and most of the company's business was pretty local - Switzerland and Europe.

In 1992 and in response to concerns about competition and a desire to remain a private company, among other reasons, Felchlin changed the management structure of the company in a way separated the ownership of the company from voting control. This unusual structure has a number of interlocking relationships that would make it difficult for a small minority of the company's management to either take it over or cause it to be sold. If you are an investment banker looking to make 20% a year on your money and sell in 5 years then this is not a company for you - and while it does pretty much guarantee that they will remain private, the capital structure (and the semi-rural location) may make it more difficult to attract some types of talent.

Nonetheless, the company's staff has grown nearly 50% in the last decade and has more than doubled since the change in management structure. In 1998, in response to a perception that they needed to reach a higher-quality segment of the market than they were already reaching and to be able to compete more effectively domestically and internationally, Felchlin began the Grand Cru project.

The first product introduction was in 1999, the Grand Cru Maracaibo 65%, the chocolate that was named "Best Couverture in the World" in 2004. Today sales are roughly 50/50 domestic/import with the Grand Cru line growing in importance every year.

The company has managed to find a balance between old and new technology. They have discovered what is the core of who they are as a company, and make many of their technology decisions from that understanding. They recently moved to a new factory and could have purchased all new equipment with production capacities measured in tonnes per hour. Instead, they reasoned that this would put them in danger of losing their uniqueness. So they carefully considered what the essence of Felchlin chocolate was and wove their older equipment with more modern production practices and equipment where they felt it provided significant competitive advantage. A case in point is the rondo molding line. State-of-the-art continuous temperers feed the molding line which is completely automated until the very last step, putting the filled bags into boxes and taping them shut. The combination of the tempering system and molding the rondos instead of depositing disks (as all other manufacturers do) provides, Felchlin believes, with a superior finished product.

An astute viewer of the images in this album will notice that I jump from the melangeur (grinder) to the conches. I actually don't know if the production processes are "secret" in any way, but there is usually a prohibition against photography in the factory. However I can tell you that they are non-traditional in the sense that there is at least one extra step in there that most manufacturers don't take. What goes on in between is one reason why Felchlin chocolates have the smooth mouth feel that they have.