CEO and co-founder at caffeinated chocolate brand Awake shares how the brand changed marketing tactics once it focused growing sales in retail stores.

Now that Awake Chocolate is available in more stores, its marketing efforts are having a compounding effect, said co-founder and CEO cofounder Adam Deremo.

The caffeinated chocolate brand launched in 2012 and prior to the COVID-19 pandemic, it primarily sold its products in food service locations, such as hospitals, college campuses and workplaces. When people stopped going to those places, the brand shifted its strategy to direct-to-consumer sales, including in retail. Stores are now the fastest growing part of its business and will be for the foreseeable future, Deremo said.

Now that consumers can buy its product in stores, Awake has leaned into public relations, influencers and other overall brand marketing initiatives, Deremo said. Prior to expanding into retail, marketing tactics that worked included Amazon ads, performance ads on Google and Meta and merchandising displays.

“When we were available in fewer places, and it was harder for us to get a good return on our marketing investment doing top-of-funnel stuff,” he said. “It was also a bit of a dissatisfier for consumers.”

For example, if Awake hosted an influencer activation, shoppers were frustrated when they discovered they could only purchase the product in a handful of stores, Deremo said. This was the top piece of feedback in surveys, was to have more store availability, he said.

“There wasn’t a great way to really turn that top-of-funnel awareness into trial,” he said.

One Door Opens for Awake Leading to More

But once Awake got its first entry point into stores, that had a waterfall effect for more stores, more efficient marketing and repeat sales.

Today, Awake is in at least a dozen retailers and thousands of locations, including 7-11, Kroger, The Fresh Market and H-E-B.

And so, the brand is leaning more into branding awareness tactics. Growing from an in-house marketing team of two, Awake hired a community manager this year to oversee influencers and hired public relations firm Alison Brod Marketing and Communications.

Now, Awake’s sales are divided evenly between food service, direct-to-consumer and retail stores. But retail is growing the fastest and will likely grow to be its biggest channel, Deremo said.

Because Awake had sales data from its previous food service channels, it was easier for retail stores to give the brand a chance compared with an unknown brand. Again this has compounding effect and now more retailers are willing to give Awake a try after the brand can show sell-through data from other retail stores, he said.

Sampling Acquires Repeat Buyers at Awake

Sampling is another success marketing initiative for Awake, the co-founder said.

“People love the taste of it, so we find it’s our best marketing tool,” he said.

When Awake launches in a new retailer it commits to sampling once a month, or once every other month, for the first six months. With this strategy, Awake’s sales will grow consistently as first-time samplers become repeat buyers, he said.

“We generally will convert between 30% and 40% of people who try our product in store into a paying customer, and then we find that somewhere between 30% and 40% of those people will become repeat buyers,” Deremo said.

This is a strong rate, he said, although the brand is always aiming for higher.

“We consistently grow our number of online shoppers quarter over quarter, and we’re consistently growing our rate of sale with pretty much all of our retail partners,” he said “That only can happen when you’re getting more and more consumer penetration.”

Beyond this sales data, anecdotally Deremo knows its brand is becoming more known. At trade shows, instead of the reaction of “What’s this?” people now say, “Oh, I’ve seen this at X store,” he said.

Making More Occasions To Eat Chocolate

Awake, as a caffeinated chocolate, has a variety of competitors. At convenience stores and gas stations, Awake competes for shelf space with legacy chocolate, while at grocery stores it competes with “better-for-you” chocolate brands for shelf space.

But Awake is creating new opportunities to eat chocolate. Based on its consumer insights work, the brand knows that most consumers eat its chocolate out of the house and earlier in the day, such as mid-afternoon and in the morning. This is unlike when consumers traditionally eat chocolate, which is typically in the evening and at home, Deremo said.

When Awake launched, there were few if any brands putting caffeine energy into snack food. Now, its become more of a trend with more brands launching with this premise and legacy brands like Cliff launching caffeinated lines.

“It’s an indicator that consumers see value in the benefit of caffeine energy,” he said. “We think that it grows the pie for all of us as more brands are playing in this space.”

Increasing Costs Spur New Products

One factor that Awake has to contend with is increasing cocoa costs, which has been at extraordinary high levels for the past few years, Deremo said. Because of a difficult crop season in 2023, Deremo estimates cocoa prices increased 400%. The price has remained high for a while after but is normalizing now.

Still, all chocolate manufactures have had deal with this. Some large brands have changed their candy recipes and have taken cocoa out of them. Awake did not want to compromise its taste and instead launched new products that used less cocoa, such as a chocolate bar with peanut butter or almonds in it. The brand also tries to signal on its packaging that it is a high-quality product, such as certified gluten free and fair-trade chocolate.

“One example of innovation that uses slightly less chocolate, we’re launching a line of trail mixes,” he said. “They include our caffeinated chocolate chips as the primary ingredient, but it’s not the only ingredient. And so we’re pretty excited about that, helps manage the cost profile and also deliver fun new flavors for consumers.”

Awake also increased its prices 10% over the course of two years, he said.

Awake is based in Canada, but 80% of its sales are to U.S. consumers, he said. Because it’s a food product, Awake has largely been insulated from the recent increased tariffs, Deremo said.