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Slow Economy Can't Stop Chocolate

National Confectioners Association says premium chocolate sales increased about 30 percent between 2006 and 2007, while retail confectionery sales increased less than 4 percent.

ST. PAUL (AP) -- The production facility of Colin Gasko's chocolate company, Rogue Chocolatier, couldn't be much smaller, with just 350 square feet.

"And that includes the closet," said Gasko. "It's pretty small -- definitely the smallest in the world in space for sure."

Gasko is comparing his facility to those of other bean to bar chocolate makers, who produce chocolate directly from cacao or coco beans by means of a painstaking and laborious process where they roast and grind their own beans. Most chocolatiers use already processed chocolate to craft their sweets.

But there are a couple dozen bean to bar producers operating in the U.S. Though most are large scale, a handful of artisan types, like Gasko, are taking off.

On this particular day, a delivery man knocks at the door of the plant. A long awaited bean shipment has arrived.

Gasko, who's just 23, is wearing jeans, a T-shirt and baseball cap. He signs for the delivery and heaves two bulky cardboard boxes inside his plant and eagerly cuts them open.

Gasko will use nothing but the beans and some sugar to make his high-end chocolate bars, which are about the size of a Hershey bar and come in pretty packaging. The chocolate's flavor varies a lot depending on the soil and climate in which his beans grew.

"These are from Madagascar. (They're) really vinegary, really fruity," he explained.

Other beans will produce chocolate that's creamy or even smokey in flavor.

Gasko is part of a growing market. The National Confectioners Association says premium chocolate sales increased about 30 percent between 2006 and 2007. By contrast, retail confectionery sales increased less than 4 percent over the same period.

Gasko got started on this path due to his love of chocolate and curiosity about how to make it. He didn't go to culinary school and is completely self taught.

He learned everything he knows by experimenting, reading industrial manuals and talking to people in the industry. He has immersed himself in food chemistry and even engineering. He often modifies machines to suit his production needs.

"I would tend to feel that a culinary background might actually inhibit things like chocolate manufacture, because it's sort of a different side of the business," he said. "You're dealing more as a mechanic or a factory worker than as a cook."

Even if the chocolate requires a lot of grunt work, the end product is drawing attention in gourmet circles. Soon after Gasko launched Rogue Chocolatier last year, he dropped off a couple bars at the upscale food and liquor store Surdyk's in Minneapolis. Gasko promptly received a request to sell the product. Two other Minnesota retailers have picked it up, including a place called Kitchen Window.

Assistant Manager Lauren Lenzen said in the six months during which the store has carried Rogue Chocolatier's product, "There's people that have come back for more. Now more people are asking for it by name."

At Kitchen Window, Gasko's bars sell for about $7.50 with tax.

Gasko's wagering that customers will pay that kind of price for his chocolate, despite the a tight economy. And he may have to push the retail price even higher to cover costs.

Worldwide commodities prices are skyrocketing, including the price of the all- important coco beans Gasko uses. They're trading at about $2,800 per ton. That's an increase of 44 percent since Gasko started production last year.

Entrepreneur expert Dileep Rao of the University of Minnesota Carlson School of Management said even the affluent are showing some signs of retrenchment in the current economy. He said entrepreneurs like Gasko have to be careful not to bank on consumers accepting every price hike.

"My analysis on this is it's tough to forecast what consumers will do," said Rao. "But there is always the possibility that customers will change, and once they change habits, it's tough to bring them back."

But Gasko takes some comfort in the fact that stores have started calling him asking to carry his product.

And he has a mentor to help. His dad, Bill Gasko, has flown out from Massachusetts. Father and son tease each other about who should get credit for Colin's business smarts.

"My mother would kill me if I let him brag about himself, but he used to be a professor of entrepreneurship," said Colin about his father.

"He may not want to admit it, but he takes after his dad," said Bill Gasko as he smiled.

Gasko's dad also happens to have a doctorate in theoretical physics, so he's busy jerryrigging machines for his son's business expansion plans.

In the next year, Gasko intends to increase Rogue Chocolatier's production capacity tenfold.

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