Cocoa Pete's Chocolate Adventures Raises $1.3 Million in Series B Funding.

CAMPBELL, Calif. -- Cocoa Pete's Chocolate Adventures, Inc., maker of premium, all-natural, chocolate bars and the second breakthrough food product company from Pete's Wicked Ale creator Pete Slosberg, has secured $1.3 million in Series B financing, bringing total funding to $3.75 million since inception. The two-year old company will use the funds to ramp up marketing and distribution of its premium chocolate.

Investors include business leaders, and individuals from a variety of industries including consumer products, specialty brands and technology. Cocoa Pete's already has product in nearly 500 stores in California, Washington, Oregon and the New York City area. Additionally, the company just signed a national distribution agreement with United Natural Foods, Inc (UNFI), the leading distributor to the natural food trade.

"It is truly noteworthy and laudable how Cocoa Pete's has achieved so much in such a short period of time," said R. Adam Smith, Managing Partner, Circle Peak Capital Management LLC, New York. Mr. Smith is on Cocoa Pete's advisory board and is an investor. "They have gone from concept to product to retail in two years, an unusually fast rate of progress and representative of management acumen."

The Market

In 2002, total chocolate industry sales were $14 billion, with the premium segment ($10 or more per pound retail price) at about $1.5 billion, according to the Chocolate Manufacturers Association. The National Confectioners Association predicts that the premium chocolate segment (including premium chocolate bars) will grow 17 percent annually for the next three to five years.

Americans have been trading up to premium offerings in virtually every food and beverage category over the last 15 years, due to the increasing exposure to and interest in more flavorful products. The development of premium segments ranges from 20 percent in beer to more than 40 percent in ice cream. Until recently, chocolate has been the one exception. Even with the explosive growth over the last two years, the development of the U.S. premium chocolate segment stands at only 11 percent of total chocolate consumption today. Now, industry experts say the chocolate market is undergoing a long-term transformation. It's now chocolate's turn to "upscale."

The primary U.S. and European premium players all focus on tradition, ubiquity and heritage, with packaging, products and marketing that tend to be conventional and somewhat predictable. Cocoa Pete's sees an opportunity in the premium chocolate segment akin to the American specialty and craft beer segment in the early 1990s, which grew from almost no sales to $3 billion in barely five years in the U.S.

"Cocoa Pete's is a great example of America's tastes moving upscale and toward more flavorful products with its different shapes, all natural ingredients, novel packaging and marketing strategies. Consumers are discovering and choosing more flavorable chocolate in place of the sweet milk chocolate that is representative of the industry," said Josh Huffard, managing partner of Consor Partners in San Francisco, and also an advisory board member.

"We are raising the awareness and accessibility of premium chocolate in the U.S. so that all Americans can better appreciate the great wide world of chocolate. Our approach is to be informal, not elitist, with unique but familiar flavors, high quality all-natural ingredients but unpretentious branding. We support our brand with a unique combination of fun, education, and unconventional marketing," said Scott Barnum, president of Cocoa Pete's. "Americans should not have to wait for a formal occasion or be in black tie to enjoy premium chocolate."

Cocoa Pete's Chocolate Adventures

Founded on April's Fool Day, 2002, Cocoa Pete's Chocolate Adventures is an American premium chocolate company based in Campbell, CA. Its mission is to make premium chocolate more accessible to everyone by helping people discover a whole new world of chocolate flavors and have some fun in the process. Cocoa Pete's Chocolate Adventures was founded by Pete Slosberg, the man who brought the world Pete's Wicked Ale.

As Pete says, "There's more to chocolate than Hershey's and Mars, and we American chocolatiers can make chocolates just as well as anybody in the world."

For more information, please visit www.cocoapetes.com.