Within an industry known for following century-old chocolate traditions, Joseph Schmidt Confections is a maverick. From his signature egg-shaped truffles to his colorful Tiffany-inspired chocolate tulips, Schmidt has literally reshaped the way people think of gourmet chocolates by turning each piece into a visual work of art. Using product and packaging design to establish brand distinction, the firm is ranked among the premiere chocolatiers in the world.

Throughout the world, there are hundreds of thousands of talented craft people, but few ever succeed in taking their business national, especially without compromising the integrity of their product. Even fewer succeed in establishing a distinct brand identity for themselves within a field of legendary global competitors.

Joseph Schmidt Confections, based in San Francisco, is one of those rare exceptions. Since the chocolate company was founded in 1983, it has developed into a multimillion-dollar enterprise, growing steadily at 15-20% a year. Today it produces two million pounds of chocolate confections annually for 7,000 national retail and institutional accounts, and it will soon move into a new 95,000-square-feet manufacturing facility.

What makes Joseph Schmidt products so special is that they look unlike any premium chocolate available. Attractive and irresistible, each piece is sculpted, molded and hand-colored by the confectioner into an edible work of art. Packaged in exquisite hand-crafted boxes, designed by Audrey Ryan, the products communicate exceptional value, even before the first bite. Little wonder that gourmet shops and fine department stores such as Neiman Marcus, Macy's and Sak's Fifth Avenue have been drawn to Joseph Schmidt chocolates. Not only are Schmidt products equal to the finest Belgian chocolates, they present beautifully in catalogs and retail settings. Customers covet the chocolates as objects, and are often torn between displaying them and devouring them.

But making design the brand signature for Schmidt confections initially wasn't a conscious decision. In fact, the idea of specializing in chocolates wasn't part of the original plan either. When Schmidt and Ryan left their pastry chef jobs to start a "cottage" business in their home kitchen, they wanted to bake European-style pastries like petit fours that were hard to find in the U.S and sell them to local gourmet shops. As an after thought, they added Belgian chocolate truffles to round out their selection. The runaway success of their truffles, which attracted Neiman Marcus' attention, and the fact that the oven temperature made it impossible to make chocolates and pastries in the same room forced the decision to go with their strongest product.

Interestingly, Ryan was the one with formal chocolate training, but it was Schmidt who fell in love with the medium. Unfamiliar with chocolate traditions, he experimented freely. "In Europe, everyone learns from a master and follows it like a bible," he says. "By not having any [chocolate] training, I didn't have any restrictions over what I could and couldn't do." Ignoring the fact that the European truffle is basically a lump of chocolate with cocoa modeled after the French mushroom truffle, Schmidt decided that the American public would accept a different look. "Americans say, `Show me something beautiful and I'll try it.' I figured an egg would be a very natural, beautiful shape."

It was but "we didn't have any packaging for the truffles so Joseph started developing these wonderful bowls out of chocolate," says Ryan. Working with dark, milk and white chocolates and food dyes, Schmidt created colorful lotus-flower-shaped bowls that were as smooth and delicate as porcelain. Beautiful and intriguing, the edible bowls caused shoppers to stop in their tracks. The local sweet shop that was coaxed into taking a few on consignment came back for six dozen more the next day and 20 dozen soon after. "Initially, we needed something to hold the product, but the boxes became conversation pieces stimulating word-of-mouth sales," Schmidt explains.

His early experiments with bowls also gave him the opportunity to discover the malleable qualities of chocolate. "Chocolate is the most fun material in the food business," he says. "It gets soft quickly, you play with it, and in a few minutes, it's hard as a rock." Like a kid turned loose in a chocolate factory, Schmidt let his imagination soar. He used molds to make turkeys, Santas, Nutcracker soldiers and honey bears, air brushing and hand-painting them so that they look more like toy figures than food. He created tulip cups and swan bowls and sculpted multicolored flowers and butterflies.

Working on a grander scale, he designed elaborate life-size exhibits, sculpting whole villages, flowers and trees, objects and people, out of up to 10,000 pounds of chocolate. Exhibited as artwork in such places as the American Crafts Museum in New York, his creations have attracted global media attention as well as special commissions for events honoring dignitaries ranging from Nelson Mandela to the Queen of England. Ongoing media interest, particularly around holidays and Valentine's Day, has garnered Joseph Schmidt enough publicity to forego any advertising.

But the "profit is not in the art," Schmidt admits. "You need a `razor blade,' something you can sell a lot of. Something smaller that you can train other people to make. Then you can do magnificent pieces to enhance and make a name for yourself." Joseph Schmidt's "razor blade" is the truffle, of which the company produced 14 million large-size truffles last year. More recently, the firm introduced Slicks, a flat, cream-filled medallion decorated with swirls of color.

Schmidt and Ryan also recognized that their strengths were on the creative side of the product and brought in two business partners an industrial manufacturing engineer formerly from Nestle's restaurant division and a former sales executive from Godiva Chocolates. While they run the business side, Schmidt and Ryan focus on the side they like most. "We wanted to be able to control the growth and still have fun with what we are doing," Ryan explains. "Basically we were always in the kitchen, playing around. We didn't want to be bothered with all the marketing."

While Schmidt constantly experiments with new chocolate ideas, Ryan has been equally busy designing and developing the packaging. One reason they decided to create hand-crafted packaging was because some of the delicate chocolate designs didn't travel well. "[Retailers] all wanted the art pieces but we couldn't ship them. So, we tried to put some of the artwork of the chocolate into the package," Ryan explains.

Today Ryan's hand-made, hand-painted boxes, produced in India, the Philippines and Mexico, are as sought after as the candies inside. On promotional tours, Ryan is often asked to autograph the boxes, which are becoming collectibles in themselves. The company's brand identity is now as much in the boxes as they are in the products. Here again, they broke away from European chocolate traditions. "In Europe, it is the opposite extreme," says Ryan. "They don't want to have different boxes. They feel comfortable having the same box for 20 years because it gives their product an identity."

With Joseph Schmidt Confections, retailers are drawn to the visual excitement of constantly changing decorative boxes. "They like us because our products decorate the store," says Schmidt. "Sales are fantastic. Stores depend on us to generate sales."

Ryan adds, "We bring larger segments into the stores during the holidays. When we started out, maybe they would give us one shelf and a case. That has evolved into six cases. Over time, they have come to recognize our strength."

Because of this, Ryan says that a lot of stores have asked for products earlier. "They want us to bring Christmas in in September, but we don't want our chocolate products around that long." To maintain year-around sales and retail visibility, Joseph Schmidt develops packaging and products around seven seasonal themes, including summer, Father's Day and Mother's Day. Intermixed with these hand-made seasonal packages are commercially manufactured boxes. Designed by Barbara Mulhauser, these boxes have also won packaging awards.

Although Joseph Schmidt Confections has been profitable from day-one, Ryan and Schmidt say that it took the better part of ten years to win the complete confidence of retail customers. "We had to develop a track record, prove that we are always on time, always delivering. If they want to double the business, we can match it, with no disasters," Schmidt says.

"In the past, we had to fight to get them to increase their budget, to keep us in stock during the holidays when people purchase. If they sold out of our product in one week, that was it. They hadn't budgeted to buy more. What is happening now is that they are allocating money for our company and building us into their budget."

Although Schmidt and Ryan recognize that visual appeal has played a large role in their market success, they emphasize that the quality has to be in the product as well. "I use the best ingredients possible," Schmidt says. "It is very disappointing to see beautiful food and find it tastes terrible. Then it is doubly disappointing. I don't want to disappoint people."

Schmidt and Ryan are also determined not to lose sight of the reasons they began their business. "Money isn't the driver," says Schmidt.

"The love is there for the product," Ryan adds. "We didn't start out to build a business, but to have fun with what we are doing." For them, the fact that Joseph Schmidt Confections has turned into a phenomenal commercial success is just the icing on their cake.