9-508-052

ROHIT DESHPANDÉ
GUSTAVO HERRERO
REGINA GARCÍA CUÉLLAR

Chocolates El Rey
The divine drink which builds up resistance and fights fatigue: a cup of this precious drink permits a man to walk for a whole day without food.
— Hernán Cortés, 15191
In late November 2006, Jorge Redmond, CEO of Chocolates El Rey, called a meeting with senior management to discuss the company’s growth strategy. A relatively small firm with sales of around
$14 million,2 El Rey produced top-quality chocolate made with single-origin Venezuelan cocoa beans.3 The firm sold its chocolates in four different sectors—food services, industry, retail, and beverages4—and exported 17% of its production, mostly to the United States, Europe, and Japan. El
Rey needed to grow, but Redmond wondered how to achieve growth and how to market the El Rey brand to its different target segments and international markets. With only 0.5% of cocoa’s world production, was it worth the effort to try to establish a country-of-origin image for Venezuelan chocolate? If so, how should El Rey go about it? And was this wise for a small company with scarce resources for marketing?

El Rey
In 1929, José Rafael Zozaya and his father-in–law, Carmelo Tuozzo, introduced chocolate bars under the El Rey brand, founding Venezuela’s second-oldest chocolate company. The company, called Tuozzo Zozaya and Co., was funded with a 15,000-Bolívares (Bs) loan from Pius Schlageter.
Tuozzo Zozaya produced mainly chocolate bars for hot cocoa (chocolate de taza) for customers in the food services business. In 1971, Jorge Redmond, Mr. Schlageter’s great-grandson, returned from his studies abroad to attend to the family’s real estate business. In 1973, Redmond became a partner with the Zozaya family in Tuozzo Zozaya; in 1976, he bought them out and changed the name to
Chocolates El Rey.
Redmond’s vision was to