Story and photos by Tom Lindfors
“If someone else can make a better box of chocolates then buy it, because I think mine are awfully good.” – Dave Knoke
Founder and owner of Knoke’s Chocolates & Nuts, Dave Knoke, is exceptionally proud of the homemade confections and nuts he has been making, tasting and selling for more than 20 years from his shop on Locust Street in Hudson, Wisconsin. Even though he admits he has always had a sizable sweet tooth, Knoke did not start out his entrepreneurial journey as a candy man.
Raised on a cattle farm in Lancaster, Wisconsin, he graduated from the University of Wisconsin River Falls in 1988 with a degree in animal science. When the company where he worked as a livestock purchasing agent decided to move west in 2003, Knoke made a hard left turn and joined his wife to help operate her 600 sq. ft. penny candy and ice cream shop in downtown Hudson.
“I’d got my belly full of the other job,” he said.
Knoke acknowledged his life in livestock was lacking. Inconsistent sales and being at the mercy of circumstances frequently beyond his control left him wanting.
Just the opposite was true of the candy business. He found himself drawn to the process of making candy and in particular creating a finished chocolate product.
“I enjoyed that,” Knoke said.
In 2005, Knoke bought out his wife’s share of the business.
“I officially became the sole owner in 2005. That’s when I started making things for myself and really went to town,” Knoke recalled.
Knoke had the foundation for a successful entrepreneurial run: a deep respect for hard work earned on the farm, a desire to learn fostered at UWRF, an aversion to failure and an abiding commitment to make something of himself.
Success almost always includes some component of luck. Knoke’s came in the form of a connection facilitated by a fellow tenant at his first store on Locust Street.
Tom Smith, owner of The Confectionary in DeKalb, Illinois, would turn out to be a mentor to Knoke.
“He got me hooked on making it, selling it and getting something done every day,” Knoke recalled.
But maybe the most important piece of advice that he shared was, “If you’re going to make this work, you have to start making your own candy.”
Heeding Smith’s counsel, Knoke strove to make his candy and in particular his chocolate, synonymous with his identity. It would come to be the taste customers would remember and put Knoke’s Chocolates & Nuts on the map.
The Chocolate
Between milk, dark and white chocolate, Knoke goes through 35,000 pounds a year. The raw chocolate is shipped in 50 lb. blocks. From there it is melted, tempered and made into specific confections from caramels and toffees to pretzels and turtles.
Chocolates have specific “personalities” including taste, texture, aroma and color as well as melting point and varying degrees of viscosity.
Knoke’s success starts with his base chocolate. It is made by Peter’s Chocolate, a recipe perfected in Switzerland in the 1880s and first made available in the United States in 1903. Early on, Smith shared some of his recipes with Knoke to help him get started, a number of which he still uses today.
Another tip Smith shared, make it possible for people to see the process, to watch the maker at work, see the love he puts into his candy.
Tariffs
Even before the recent uncertainty caused by tariffs, Knoke was dealing with steep increases in the price for chocolate. He has seen the price double from $3 per pound to more than $6 in just a few years. Analysis by the Energy & Climate Intelligence Unit of the Office for National Statistics shows that chocolate prices have increased by 43 percent since 2022.
Knoke explained that the majority of cocoa comes from farmers in Africa and South America. The Cacao trees which provide the beans from which cocoa is made can take five or six years to mature and begin producing beans. A healthy tree may produce for as many as 20 years before it begins to decline, but the trees are susceptible to disease and represent a risky investment when compared to other crops like corn or soy beans.
“A blight or disease can impact the trees so farmers are deciding to cut them down and choosing instead to grow different agricultural crops like corn or soy beans,” Knoke explained. “Their land is also increasingly in demand for housing development.”
Occhetti Foods brokers the different nuts Knoke uses in his recipes. While the peanuts and pecans are grown in the U.S. the cashews, which he purchases by the pallet, come from Vietnam. Right now, according to the broker, “cashews are off the board.” Knoke’s six-month contract is up in August. He will not be surprised if tariffs increase his cost.
Kowalski’s chain of high-end markets in the Minneapolis area informed Knoke they would be passing recent price increases along to customers.
“That might be the new norm,” he said.
Knoke fears tariffs on aluminum may impact the tins he uses to package his sweets for the holidays as well.
“Hopefully by July we’ll have a better idea of what’s going on,” he said.
Replacing the custom packaging he imports from China is proving to be a bigger challenge.
“I’m not even calling them,” Knoke said. “I’m having a hard time finding someone to make substitutes here in the U.S. It just might not be as fancy.”
“It’s all making me a little nervous,” Knoke said.
Customers
Knoke is working to increase his online business. He currently derives 65 percent of his business from his retail store, 30 percent from wholesale to retailers like Kowalski’s and area wineries and the balance from online sales. He knows that number can grow.
“We’re still refining the online side. The business is there. We just have to address it more efficiently,” Knoke said.
Technology is not Knoke’s strong suit so he has a team of younger employees working to improve his website’s commerce capacity while he works out shipping options.
For all practical purposes Knoke has been the face of his business, literally a one-man show, since he took over in 2005. Making candy in the window between visits from neighborly business owners eager to share advice and customers critiquing his concoctions has made him a fixture in the community.
Today that simple act of making candy in the window and connecting with passersby is translated into short videos posted to social media that draw thousands of views by potential customers.
Knoke learned early to value his customers’ critiques. Listening to them not only improved his products, it helped to build dependable relationships.
“Our customers are our best critics,” Knoke said. “And a lot of those people have stuck with me.”
He recalled an early episode where he was experimenting with dipping apples. The next day he tried one of the apples and found it had hardened too much. Then he remembered, “Oh
shoot, I sold some.”
Sure, enough a customer returned that morning and reported, “That apple wasn’t very good.” Knoke acknowledged, “You’re right, it was a little hard…”
Over time Knoke mastered recipes Smith had shared with him and began to experiment with his own including caramels, truffles, turtles and chocolate covered potato chips. He also learned the value of managing the availability of specific sweets making them more desirable and growing customers’ expectations.
“I don’t do caramel apples until Labor Day weekend and I’ll dip them until Thanksgiving,” Knoke said. “I only do chocolate covered strawberries during the week of Valentine’s Day. People know to call to reserve their order. I sell over 4000 strawberries.”
As his reputation for quality candy grew, so did his business.
“One guy can only make so much candy.” Knoke said.
A business he had built from the ground up with his own hands now provided livelihoods for employees. It became more than just his story.
Future
In 2014 Knoke purchased what is now his production facility, an old nut roasting plant on Harvey Street. Today he makes 80-90% of all his products in-house.
When asked about his biggest challenge, Knoke hesitated before saying finding a successor.
He realizes the business is still very dependent on him and his expertise and no one is waiting in the wings at the moment. It is something he is beginning to think about.
He is not ruling out one of his three children taking over the business, but he wants it to be their decision. “I don’t want to force them, and I don’t want them to do it because they feel like they should,” he said. “Growing up as a farm kid in the late seventies I saw too many farmers turn the farm over to the kid and five years later the farm is gone or the farmer has to step back in.”
Knoke thinks it is more likely one of his employees who has learned the ropes and been a part of growing the business would be mentored to take over the business.
“There’s a process I need to start going through. I need to find a general manager,” Knoke said.
“When I’m done I’d like to be done with it completely, but hopefully the name sticks.”
In January 2023, Knoke purchased the building that is today synonymous with Knoke’s Chocolates & Nuts, at 218 Locust Street. It resides right between the two buildings previously associated with his business except those were rented. “I think when I purchased the building, I’m in now downtown and I remodeled it and moved in and opened up, it became mine and I felt like I had made it,” Knoke said. “People began to recognize and associate Knoke’s with Hudson.”
One of Knoke’s great joys is seeing a new generation of candy customers come through the door. Parents who were once children buying ice cream at the counter now visit the shop with their own children in tow continuing the Knoke’s tradition.
If you are looking to catch up with Dave, try Sunday afternoons.
“I like coming in on Sundays downtown just to see what’s going on. People stop and just want to talk,” Knoke said. “Pretty soon I’m just in the way. I tell people I’m more of a hindrance than a help.”
Sweet tooth?
“It used to be pretty big but now it’s more about portion control,” Knoke said. “Now one turtle’s enough. It used to be two or three or four… I’ve definitely cut back. It’s definitely still there, it’s just matured.”
Just the Facts
Knoke’s Chocolates & Nuts
Dave Knoke – Owner
Formed: 2000
Address
218 Locust St.
Hudson, WI 54016
715-381-9866
Website: https://knokeschocolatesandnuts.com
Employees: 20
Sq. ft. 5,750