A chocolate company's comeback

(FSB Magazine) -- In some ways the errant freight car that tore through the factory of Maud Borup Chocolates in 2003 did the owners a favor. Sure, the incident - in which no one was injured - ruined the building, destroyed inventory and raw materials, and put the underinsured company's survival in question (see "Thrown off track," from the February 2004 issue). But, says co-owner Kim Kalan, "the train accident made us rethink our whole business."

As they documented their operations for the insurance company, Kalan and her partner, brother-in-law Mark Kalan, quickly saw that their business was headed in the wrong direction.

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Since buying the venerable St. Paul chocolatier in 2001, they had added stores in Minneapolis and bought a chocolate factory in Parham, Minn. (the scene of the accident). Outside the Twin Cities, however, the Maud Borup name rang few bells. "We didn't have a brand," says Kim. So they bought one that would enable them to recast the company as an online candy emporium: Route 29 Napa (route29napa.com). The San Francisco--based company sold caramels on the Internet and was posting about $300,000 a year in revenue. The Kalans closed the three Maud Borup stores to focus on the web.

Last year revenue jumped to $4.1 million, up from $950,000 in the year of the crash. In October, Route 29 Napa planned to roll out a new line in time for the holidays: licorice for kids made in the shapes of barnyard animals. Now Kim Kalan may have time to finally do something about replacing her factory, which remains unrepaired.