Founded in 1996 by Robert Steinberg and John

Scharffenberger
The vision was to produce of highest quality
chocolate from the finest beans available
Established at 27000-square-foot brick warehouse in
Berkeley, California
In 2003, Jim Harris recruited as COO to lead the
business and manage companys growth
The company 60 employees, 24 working in production
area, 18 at retail stores and 18 in Administrative
functions
Scharffen Berger sold its chocolate through its 5 retail
stores, various other retail outlets and its own website

The chocolate industry was segmented into two

categories :
Mass market
Premium

Premium segment was considered as the growth

segment of the industry, with 15-20 % annual growth
projected between 2000 to 2010
Scharffen Berger competed in the 1.2 billion premium
segment , a large part of which was dark chocolate
The retail price of the product spanned from $10 to
$100 per pound
In premium segment, Scharffen Berger was considered
to be at the high end, in terms of price and positioning

Sales in 2004 was $10 million and it was

estimated 2005 revenues would exceed $15
million
Product Mix included 7 different products with
differing amount of contents leading to nearly 80
SKUs
Market Offerings in four consumer sizes 0.2 oz, 1
oz, 3 oz and 10 oz
The company also made professional sizes of 2
kg, 3 kg and 15 kg that were used primarily in
food industry
Trader Joes is the companys largest customer
which accounts for 20% of its sales.
Scharffen Berger also made a speciality 60%
cacao blend in two ounce bars for Traders Joe.

Production Area 20,000 sq. ft.

Beans sourced from various countries
Beans purchased 6-9 months prior to use
Maximum production of 40,000 kgs in a
month
Bottleneck in Conche due to high
processing time (50 hours on average)
Average Monthly output 27 Conches

Bean Cleaning
Roasting
Winnowing
Melangeur
Conche
Tempering
Molding

200 kg
beans
8hr/day

Bean
Cleane
r

250 kg in 1.5
hrs 8 hr/day

Capacity 450 kg in 1
hr
Input is 250 kg 8
hr/day

Roaster

Winnower

192 kg
in 15
mins

140 kg in 1 hr
Capacity 200kg/hr
16 hrs/day

Conche (1)
1400 kg in 2436 hrs
effectively.
24 /day

Temperin
g

Conche (2)

Molding

140 kg in
2 hrs
8hrs/day

Packagin
g

185
kg
nibs

Melangeu
r
115 kg in 1.25
hrs 16hrs/day

Bean cleaner

The machine could process approximately 200kg at a time

Time required for the operation is 15 min
The cleaner operated during one 8 hour shift, 7 days a
week
Output = (192*8)/0.25 = 6144kg/day

Roaster

The beans from different places were roasted separately in

order to optimize the flavour, as roasting time and
temperature varied
It can roast 250kg at a time and the time required was
1.25 hrs
it operated during one 8 hour shift, 7 days a week
15 minutes kept for cooling
Output = (250*7.75)/1.25 = 1550kg/day

Winnower
It could process 450 kg of whole beans each hour
Each batch was approximately 250 kg, from which 185
kg nibs were recovered
It operated during 8 hour shift, 7 days a week
Output = (185*8)/0.56 = 2642kg/day

Melangeur
Melangeur ground nibs in 115 kg batches and each
batch stayed in the machine for approximately 1.25 hrs
The Melangeur was used seven days a week in two 8 hr
shift
Output = (115*2*8)/1.25 = 1472kg/day

Conche
Scharffen Berger used 2 Conches to refine, mix and
aerate the chocolate
Each conche processes approximately 1400 kg batch
of single recipe
99% conching process contains 1400 kg of nibs
whereas 62% contains 850 kg of nibs. Average 1050kg
of nibs is used in batch with approximately 35%
additives
Each batch spent between 48-72 hrs in the conche
The conche was staffed 24 hrs a day, 7 days a week
Output = (1050*24)/30 = 840kg of cocoa
processed/day
Output = 840 * 1.35 = 1134 Kg of final chocolate/day

Tempering
It could process up to 200 kg/hr run at 140kg/hr
Tightly coupled with Moulding

Moulding
The moulding machine processed about 140 kg/
hour
It operated in two 8 hr shifts, seven days a week

Packaging
Scharffen Berger did the packaging for 35% of its
products, remaining 65 % were outsourced
It operated in one 8 hr shift, six days a week

Bean Cleaner

Tempering
and Molding

Packaging

Roaster

Winnower

Conche
Conche

Melangeur

Install Ball Mill to reduce 40-60 hours spent

in Conche to 15 hours in conche and ball
mill combined
New bottleneck will be melangeur.
Install additional melangeur for $50,000