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. Last Updated: 07/27/2016

Chocolate King Lends Candy a Noble Touch

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They call him the Chocolate King — and they thank him for carrying on a long family tradition of chocolate making.

But Andrei Korkunov, 38, is no nobleman, and his chocolate is less than 2 years old.

"Many think Korkunov is a bearded old man," said the head the ARS trading house, producer of A Korkunov chocolate, one of Russia's favorite chocolate brands. "People think I'm a descendant of some historic nobleman."

While giving a brand the family name seems like a pre-revolutionary throwback, Korkunov is anything but old-fashioned. He's a modern entrepreneur who started his business from scratch. A former military man with a background in engineering, he went into business after the defense factory where he worked closed down.

Just like everyone at the beginning of the capitalist boom in Russia, Korkunov had tried to sell everything that could be sold — from jeans to iron. Then business partners from the Czech Republic brought him three truckloads of chocolate to pay for industrial equipment they had purchased.

"It was better than nothing," said Korkunov, who added that the chocolate sold like hot cakes.

Korkunov created ARS in 1999 to build his chocolate factory in Odintsovo, just outside Moscow. Initially, ARS was in a partnership with Italy's Witters, but Witters bailed out after the 1998 financial crisis.

"We had a different trademark that time, it was Buckwood. My partners told me that it would sell well. But I thought that my own name would make a better symbol of quality," Korkunov said.

In order to show his fellow citizens how Western brands taste, Korkunov purchased Italian equipment to make his chocolate. ARS contracted OPM — the major supplier to Italy's Ferrero, producer of Rafaello, Kinder Surprise and other candies — to supply the chocolate-making equipment.

Despite the nation's strong pride in its chocolate, Korkunov said it is a mistake. "Since earlier there was nothing to compare it with, many thought Russian chocolate was the best," Korkunov said, referring to Soviet times, when foreign chocolate was not available.

Korkunov was the second entrepreneur in modern Russia to use his family name for a product. Earlier, businessman Vladimir Dovgan had turned his family name into a brand and sold it as a franchise. His business was purchased in the summer of 1999 by Sputnik Fund, an affiliate of MFK Renaissance Group, which now holds the rights for all products bearing the Dovgan name.

Korkunov set out to capture the higher-end niche of the chocolate market and started to produce wrapped candies and chocolate in elegantly designed boxes. To make his products taste differently from traditional Russian candies, Korkunov used 80 percent Western ingredients and Italian Sheaf, which he brought back from one of his business journeys.

"I use only Italian nuts. If I use Georgian nuts, two of them … are sure to turn bitter," he said.

Korkunov's factory currently makes 3,000 tons of chocolate and chocolate products per year and plans to double production by September, increasing annual sales to $40 million per year. The company exports chocolate to countries such as Israel, Germany, the United States and Canada. The share of premium chocolate on the Russian market is between 10 percent and 15 percent.

According to Korkunov's own estimates, his chocolate currently holds 2 percent of the premium chocolate market in the country. A Korkunov was awarded several gold medals at the Prodekspo-2000 exhibition and World Food-2000 expo, both held in Moscow.

Despite the higher price tags of his chocolate products (a Korkunov chocolate bar cost 60 rubles, while a bar of Krasny Oktyabr costs about 20 rubles), Korkunov said his chocolate has proven popular not only with middle-class customers, but also among students and housewives. Some of them even claim to keep leftover chocolate boxes in a collection. He smiled when speaking about high-school girls who received his chocolate as a gift on International Women's Day on March 8.

"If a person eats our chocolate just once, he becomes our client," said Korkunov.