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This is a two part post about my experience working as a Wholesale Account Manager for Mast Brothers Chocolate from 2014–2016. Part One addresses the negative press that began dogging this legendary wholesale brand beginning in late 2015, and explores the egos behind the brand to better understand why things went down the way they did. Part Two demonstrates how the press was but the final straw in a long series of costly wholesale blunders, and treats Mast Brothers Chocolate as a cautionary tale for salespeople representing other small wholesale brands.
On the morning of December 7, 2015, I received a Google Alert for an article that I did not for a second suspect would completely upend my work life.
The article, entitled Mast Brothers — What Lies Beyond the Beards, was written by a food blogger in Dallas named Scott Craig, who contends that back in 2008, Rick and Michael Mast may have sold some chocolate as bean-to-bar that wasn’t actually bean-to-bar.
Craig’s article looked and read like the rantings of an obsessive lunatic, and even if every word of it was true, who cared? Certainly not any of us who worked at Mast Brothers. From our perspective, his criticism of the brothers was amusingly misdirected. We could have told you countless stories about how maddeningly inept they were as business owners, and how needlessly difficult they made our lives with their erratic directives. But there was one thing we all knew for certain: every single bar that ever left a Mast factory was 100% bean-to-bar, regardless of any shenanigans that may have occurred before they opened their first factory in 2008.
Yet somehow, by the chance concurrence of a slow news month and an apparent society-wide loathing for anything perceived to be remotely hipsterish, Craig’s post (and the three that followed it) sparked what you might call the Fourteen Days that Shook the Artisan Food World. On December 17th, Quartz weighed in with some unabashed click bait: “How the Mast Brothers Fooled the World Into Paying $10 a Bar for Crappy Hipster Chocolate.” On December 18th, Megan Giller of Slate Magazine (who had written another hit piece earlier that year) dropped the next bomb: “Why Chocolate Experts Think the Mast Brothers are Frauds.”
Then, on December 20th, The New York Times ran an article called “Unwrapping the Mythos of Mast Brothers Chocolate in Brooklyn,” in which Rick explains that he and Michael experimented with couverture (remelted industrial chocolate) when they were first starting out.
Now, here is a crucial point that was left out of that article and all subsequent press: experimenting with couverture is the definition of being a chocolatier. Chocolatiers make chocolate bars and confections such as bonbons and truffles using couverture. Most name-brand chocolate companies that you can think of are by definition chocolatiers, who remelt industrial chocolate. Chocolate makers, on the other hand, are a rarer breed who create chocolate from the raw ingredients cacao and cane sugar. Chocolatiering is a perfectly respectable direction to go in the chocolate world, and in the early days (before they owned any factories) the brothers were considering both directions for their business. They settled on being chocolate makers exclusively once they felt confident enough in the craft to make a go of it.
Unfortunately for the brothers, there was too much nuance in that explanation for our sound bite culture. Eater, Gothamist, NPR, and countless others all chose to ignore this distinction, and reported instead that the brothers had straight-up confessed to remelting industrial chocolate (“industrial” being a particularly provocative word to associate with an artisan food maker).
To make matters worse, the verbal tense of the public discourse surrounding the allegations morphed from past tense (something that allegedly happened nearly a decade earlier) to present tense — in the eyes of the world, Mast was currently, in 2015, remelting Valrhona chocolate, repackaging it, and selling it as their own bean-to-bar chocolate. This was patently ludicrous. The brothers would have had to keep a lot of disgruntled employees quiet if there was a remelting conspiracy any time after 2008.
Nevertheless, the hysteria was real, and you can imagine what it did to our sales. Since the news hit so late in the quarter, we managed to hit our Q4 wholesale goal, but come January, our wholesale numbers had dropped nearly 50% year-over-year. It was the beginning of the end for Mast. But lest Craig, Giller, & Co. break their arms patting themselves on the back, the press was just the latest of many mistakes that the brothers had made over the years that ultimately doomed their wholesale program.
No Goodwill Left in the Tank
I joined the wholesale team with great enthusiasm in May, 2014 — you couldn’t ask to represent a product with better brand equity and shelf appeal. Owing to the design of our packaging, we could sell into channels that many wholesale brands can only dream of: lifestyle shops (Mast was stylish), bookstores (Mast was literary), library and museum gift shops, hotels, gift basket companies, and on and on. Several of our top accounts weren’t even food retailers! Third wave coffee shops loved us too, since cocoa bean origins and processing methods parallel those of coffee. We made special edition bars for The French Laundry, Eleven Madison Park, Shake Shack, Carnegie Hall, The Paris Review, Hublot, Marc Jacobs, The Ace Hotel, Rag & Bone, Stumptown Coffee…
But it wasn’t just about selling chocolate. It was as much about sending good business to cacao growers in developing countries. The beans that the brothers sourced were truly first rate, purchased directly at fair prices from small farms and cooperatives (in 2014, we paid over double the average market price per metric ton on the international commodities market). The sheer volume of our sales meant that we sent tons of business to these growers, arguably more than any other craft chocolate maker in the US. You can’t find fault with the brothers’ sourcing practices. Anyone who claims otherwise is full of shit.
At our peak, we had about 900 active wholesale accounts in 43 states and 8 countries, to which we distributed our products directly — no distributors, no middlemen of any kind. Very few wholesale brands can claim that robust of a portfolio of direct accounts.
The trouble was, when the press storm hit, the brothers showed little concern for the effect it would have on their wholesale business. They were the victims of an attempted character assassination, and surely their wholesale partners would step up and rally behind them. If they didn’t, good riddance. But the wholesale team knew immediately that the situation was dire, because we knew that in the years leading up to the press, we had been a pain for retailers to work with, and we didn’t have any goodwill left in the tank. I’ll get into the specifics of that in the next post. But first, you must understand the personalities behind the brand.
The Steve Jobs of Chocolate
Rick was what you might call the brand visionary, and Michael more the numbers guy. They were a volatile pair, often at each other’s throats. Usually it was petty quibbling, sometimes it would escalate and one would storm out of the office. They were known to berate employees in front of their coworkers. Michael had a temper like a volcano: pretty chill most of the time, but when he blew his top, look out. He once went so far as to swat a yogurt out of the hands of our sixty-year-old accountant, right in the middle of the office. During the LA factory opening, he tore into a health inspector so dramatically that it was unclear if the health department would allow the factory to open.
Rick was more pensive in nature. He was great at borrowing ideas from other industries and applying them to his own. And he was an absolutely brilliant speaker. I’ve never met anyone who could spin such picturesque visions of the future. But that’s all they were: visions. These visions paid little heed to the reality on the ground, simply because he couldn’t be bothered with understanding the ins and outs of his business’s operations.
Only once in my 2+ years at Mast did he and Michael dirty their hands with making chocolate, and it was a bewildering episode. The production team had been struggling to meet production goals against faltering machinery and staggeringly high employee turnover rates (which was always the case at Mast — the internal code name for turnover was “Mast Exodus”). In an effort to prove to them just how easy their jobs were, the brothers came in to the factory on a Sunday when no one else was there, and set to work using state of the art machines that they had never before operated. The results would have been downright comical, were it not for the giant mess that the real chocolate makers had to clean up before they could get to work on Monday morning. The brothers’ entire output had to be scrapped for quality control reasons.
Some thought of Rick as the Steve Jobs of chocolate, though Jobs had some actual technical expertise in his field, while Rick had very little. I believe now that he was merely emulating Steve Jobs, and I would wager good money that he read the Walter Isaacson biography of Jobs sometime in 2014. In that book, Isaacson describes how Jobs had the walls of his flagship factory in Fremont painted white. In late 2014, Rick ordered that the chocolate makers drop everything and paint the walls of our flagship factory in Williamsburg white. This set our production back by a month right before the holiday rush, resulting in massive product shortages.
Anyone who worked at Mast during this period can surely relate to the following:
Jobs wanted the machinery to be painted in bright hues, like the Apple Logo, but he spent so much time going over paint chips that Apple’s manufacturing director, Matt Carter, finally just installed them in their usual beige and gray. When Jobs took a tour, he ordered that the machines be repainted in the bright colors he wanted. Carter objected; this was precision equipment, and repainting the machines could cause problems. He turned out to be right. One of the most expensive machines, which got painted bright blue, ended up not working properly and was dubbed “Steve’s folly” (Isaacson, p183).
Jobs later became obsessed with matte black cubes in his design of the NeXT computer:
Jobs decreed that the computer should be an absolutely perfect cube… He liked cubes. They had gravitas but also the slight whiff of a toy. But the NeXT cube was a Jobsian example of design desires trumping engineering considerations… The perfection of the cube made it hard to manufacture. The sides had to be manufactured separately, using molds that cost $650,000…. Jobs also had the company buy a $150,000 sanding machine to remove all lines where the mold faces met and insisted that the magnesium case be a matte black, which made it more susceptible to showing blemishes (Isaacson, p222).
Rick certainly took this bit to heart, replacing our retail store’s pastry case with an assortment of chocolate cubes, and all tables in the retail space with matte black cube pedestals.
More detrimental to their wholesale business in particular was how Rick attempted to mimic Apple’s retail and distribution model. The brothers considered themselves to be a retail company with a wholesale side gig, and they planned to ditch wholesale as soon as the time was right. This is not in itself a bad thing. It’s actually a great thing if you can pull it off. Apple’s ownership of its design, manufacturing, retail, and distribution gives them complete control over the customer experience, something that Rick always aspired to.
But this was just another one of Rick’s visions that didn’t mesh with the reality on the ground. The reality was that wholesale made up 65% of the company’s overall sales, while retail made up 35%, regardless of how much money and effort they poured into retail. Wholesale always took a backseat to retail, which meant that we did not have the wherewithal to build the kinds of partnerships that could withstand the hit we took in the press.
Rick was an ideas man exclusively, and his ideas regularly interfered with the efforts of the people doing the actual day-to-day work. The company came to be because he and Michael were in the right place at the right time with the right idea. Beyond that, the huge commercial success that it became had little to do with them, and everything to do with the hard work and dedication of generations of talented chocolate makers, office workers, fulfillment managers, designers, and salespeople, all persevering in spite of the brothers’ insanely oblivious directives.
In April 2016, in an effort to quash the haters and show the world just what kind of a success they really were, the brothers took over a lease on a 65,000 square foot chocolate factory, and announced that they planned to double their workforce to 150 people in the coming year. Less than a year later, they’d shuttered both their LA and London factories, and as of this writing, there are only a handful of employees left in Brooklyn, operating in a factory the size of a football field.
In March 2017, Forbes reported that the brothers had decided to focus more on wholesale. “Wholesale is an alluring business to [Rick] Mast as that channel is seeing growth above 100% year-over-year, aided by distribution at chains like Whole Foods and Dean & Deluca.” This was wishful thinking on Rick’s part if he was referring to 2016, or perhaps he was being nostalgic for the days when that was the case, at which time his interest did not lie in wholesale.
Here is where his attention was focused as of March 2016 (three months after the press storm), when he and Michael presented a roomful of managers with this handout:
Notice that “Grow Wholesale” is listed towards the bottom, practically an afterthought in comparison with some of the loftier ideas on this to-do list (few of which ever saw the light of day). A music festival? A quarterly magazine? Stores and factories all over the world? A foundation for youth (for this, M.A.S.T. was to become an acronym for Math, Art, Science, Technology)?
Simply put, these guys were never interested in the minutiae of growing a wholesale business.
Did the explosion of negative press affect our sales? Most certainly. Was it entirely responsible for the decline and fall of Mast Brothers Chocolate? Most certainly not. We were a pain for retailers to work with well before the press hit. How so? you ask. In Part II, we will turn our attention to that very question.
Correction: January 6, 2018
An earlier version of this article misstated that the Masts signed the lease on their Navy Yard Headquarters in April 2016. In fact, they took over the lease then, but had signed the lease well before the negative press began (according to Rick Mast).