‘7th Heaven’: How date night turned into a $3m Israeli vegan chocolate company

What started as a date-night experiment for two young Israelis is now a full-fledged vegan chocolate company with a recent $3 million US investment.

By Elana Shap,  ISRAEL21c

Although Daniel Bareket grew up in Harduf, a kibbutz known for its excellent vegetarian restaurant, he only stopped eating animal products after he moved to Tel Aviv at the end of his army service.

That he and his future wife would one day develop award-winning dairy-free milk chocolates, produced and sold all over Israel and in the United States, was far beyond his imagination.

It all started after he met Elya Adi, a vegan since the age of 16. On their first official date, Bareket suggested they get into the kitchen to try and make a dairy-free milk chocolate together.

“I knew she was a chocoholic and vegan and this drove me to ask her if we could come up with something,” he recalls.

It was far more challenging than they expected. “The problem is that liquids don’t blend well with oils in the cocoa butter so that ruled out adding a plant-based milk. We tried dehydrated milk and even vegan baby formula, which was disgusting,” says Bareket, who was working in high-tech at the time.

The couple realized they needed to educate themselves and spent hours accessing online resources in order to understand all the variables. At this point, Bareket tells ISRAEL21c, making vegan chocolate was still a hobby, with no business plan even remotely in mind.

It took a year of experimenting to obtain a creamy texture and a delicious flavor. What made all the difference was combining dehydrated soy milk (ordered from Canada) with coconut and feeding it into their new ultra-fine grinding machine.

Successful crowdfunding

With both their careers at a turning point, they decided to do a crowdfunding campaign for upscaling their vegan milk chocolate with the aim of raising 13,000 shekels (about $3,500).

“We landed up raising seven times that amount in only one day. Probably one of the most successful crowdfunding campaigns ever,” Bareket says, still with disbelief at the achievement.

With this cash injection, they were able to open their first factory in Jerusalem in 2016. They named the brand Panda, after Elya’s nickname for Daniel.

Made in 14 flavors (including peanut butter cream, caramel & sea salt and cookies & cream) and sold in Israeli health-food stores and supermarkets, the new dairy-free milk chocolate met with such a good response in the local market that the couple decided to investigate the US market.

Cracking the code

Their research revealed that more than 50 percent of US households include plant-based items in their food purchases. Growth came not mainly through veganism catching on but also through flexitarians who were aiming to reduce animal products in their diet; Meatless Monday followers; and the lactose-intolerant segment.

However, on a research trip to the US, the now-married couple discovered something even more surprising. While supermarkets stocked a wide variety of dairy-free ice cream and plant-based cheese, non-dairy milk chocolate bars and snacks were hardly to be seen.

“Either nobody had cracked the code to make a tasty vegan chocolate or there was no demand from the consumer, which was hard to believe. We went with the first theory,” says Bareket.

To test the US market, an online store was opened in September 2022. Panda was renamed 7th Heaven due to trademark issues, and positive feedback soon started to roll in.

“Customers said they couldn’t believe that something so delicious and creamy was made without a drop of dairy. The market we were looking for was definitely out there,” Bareket relates with pride.

First US investor

Then another lucky break occurred. “We got an email from a man named David who found us online when looking for vegan chocolate for kashrut reasons. He had tried several types of chocolates until he discovered Panda and fell in love with the product and the taste. And, he wanted to invest.”

“David” turned out to be David Schottenstein, a consumer products entrepreneur behind Thomas Ashbourne Craft Spirits (Sarah Jessica Parker and other celebrities are partners).

He also roped in Peter Hess, veteran agent at Creative Artists Agency that represents A-listers such as Ariana Grande, George Clooney and Harry Styles. Through Hess, negotiations are currently underway to include a celebrity in the next 7th Heaven advertising campaign in the US.

Fair Trade

The $3 million raised from the investment group is intended to get the 7th Heaven line into the mainstream market (at present it is sold only in New York, Miami and California) by the end of the year.

And it has facilitated Panda’s R&D team in Tivon, Lower Galilee, to work on a range of new vegan chocolate products that will be dairy-free competitors to well-loved and well-known chocolate products in the American market.

The company is also focused on retaining its Fair Trade label, sourcing cocoa from ethical suppliers in Ghana and the Ivory Coast and being as sustainable as possible (vegan snacks and bars produce two-thirds fewer the greenhouse gases than do dairy products).

Bareket says the company is constantly looking for innovative ways to make production, packaging and shipping processes more Earth-friendly.

“Because, as far as we know, you can’t find chocolate on any other planet,” he quips.