SWEET SUCCESS/THE OWNER OF JUST TRUFFLES HAS A PURIST'S APPROACH TO CHOCOLATE THAT HAS GIVEN HER A COMPETITIVE ADVANTAGE AND A CULT FOLLOWING.

Kathleen O'Hehir-Johnson recently moved her store from the St. Paul Hotel to her own retail space on Grand Avenue.
If they didn't use fresh butter and cream in their truffles, Kathleen O'Hehir-Johnson and her husband Roger might be millionaires. As it is, O'Hehir-Johnson's hand-dipped Just Truffles bring in revenue of about $180,000 a year, 75 percent of it from wholesale business.
It could have been closer to $2 million, she's been told, if she'd only accepted one firm's invitation to replace Godiva chocolates in duty-free shops internationally with her own. Instead, by moving her store from an obscure corner of the St. Paul Hotel lobby, where she's been for 10 years, to her own new retail space on Grand Avenue, O'Hehir-Johnson hopes to build up retail sales, which have a higher profit margin, to at least half the business.
Unlike many truffle manufacturers, O'Hehir-Johnson is a purist who won't use wax or preservatives in her confections. The shelf life of a Just Truffles truffle is about 30 days in a refrigerator, two to three days unrefrigerated, and just a few minutes outdoors on a scorching July day, when the crisp chocolate coating splits in what O'Hehir-Johnson considers an unattractive way.
``I won't do what Godiva did to guarantee six months shelf life,'' she said, referring to preservatives.
It's the uncompromising taste of her truffles that has given O'Hehir-Johnson her competitive advantage and built her a cult following. Tenor Luciano Pavarotti and pianist George Shearing are among those who first tasted her delicacies while staying in the St. Paul Hotel and now continue to order truffles delivered by mail. Shearing sent an autographed photo: ``Wish I could play like you make truffles.'' Pavarotti performed at the St. Paul Civic Center wearing a tuxedo accessorized with a gold stretch bow from a box of Just Truffles on his left wrist.
A truffle, says O'Hehir-Johnson, ``is an adult piece of candy - something you savor.'' The hand-shaped ganache center is essentially fresh butter, cream and chocolate, to which Kathleen and Roger may add any of 28 flavors, ranging from amaretto to key lime.
Some manufacturers make their centers heavy and fudge-like, others soft and runny. Just Truffles centers are whipped to a mousse-like consistency, then single-dipped in tempered chocolate so they snap when bitten into.
Trained part-time employees decorate each piece, which is the size of a ping-pong ball when finished.
``We make them from the inside out,'' said O'Hehir-Johnson. Most bulk manufacturers do the opposite, pouring filling into a truffle shell.
Shelf life is always an issue with truffles, according to Lisbeth Echeandia, editor of Confectioner Magazine, a bimonthly trade publication based in Savoy, Texas. Large companies, she said, don't make fresh truffles because of distribution problems. ``This niche marketing is a tremendous opportunity,'' she said, though no one has been able to track how many truffle entrepreneurs there really are.
National retail sales for gourmet chocolate were $740 million in 1997, according to Susan Fussell, spokesman for the National Confectioners and Chocolate Manufacturers Association in McLean, Va. New Department of Commerce consumption figures for '98 will be released soon. Fussell says past figures show the entire $23 billion confection category, which includes everything from chocolate to gum, is growing from 2 percent to 4 percent each year. Gourmet chocolates in general, she said, are growing at a faster pace than the rest of the category.
The only time the economy has affected her truffle business, said O'Hehir-Johnson, was last spring when the price of butter tripled, from $33 a case to $106. She raised prices 17 percent. Otherwise, she said, chocolates are like liquor - people treat themselves despite ups and downs. Shipping is expensive, since she'll only use overnight air delivery services. But for people like a German customer who regularly pays over $50 to ship a $20 box of truffles, it doesn't matter.
O'Hehir-Johnson still works full time at the Minneapolis-St. Paul International Airport from 5 a.m. to 1 p.m. as a Northwest Airlines customer service agent and plans to continue there for another eight years while running Just Truffles.The business began as a hobby and grew from requests by co-workers. Her husband Roger has helped in manufacturing and sales from the time she ordered chocolate by the pound to the present, when she orders two tons at a time.
Her first licensed commercial kitchen was in an old Masonic Hall on Smith Avenue. Now she manufactures in the new store at 1326-A Grand Ave. in St. Paul, where visitors can watch. She's added prepared and bulk tea and coffee, and gift items designed to hold truffles.
La Paperie in Woodbury is her only other retail outlet in the Twin Cities. She has about 30 accounts outside the cities and a number of corporate and bridal clients who pay for innovative decorating and packaging. Being based in a cold-weather state has been an advantage, says O'Hehir-Johnson. ``You don't find a lot of chocolate candy manufacturers in Florida.''
Although there may be a lot of small companies making truffles nationally, said O'Hehir-Johnson. ``They seem content to serve the local area. We're not.''
Executive SummaryBusiness:

• Just Truffles Inc.
• Type: Manufacture upmarket chocolate truffles
• Location: 1326-A Grand Ave.
• Owner: Kathleen O'Hehir-Johnson
• Founded: 1988
• Employees: Kathleen and Roger full time, seasonal part-timers
• Revenue: $180,000
• Key competition: None locally. Big candy companies not comparable.
• Obstacles overcome: Name recognition and perceived value of product
• Competitive advantage: Taste and location.
• Challenges ahead: Offering the same customer service at retail as wholesale