Kilwin's Chocoloates owner Chera Tramontin holds popular Pretzel Twists, Nutcracker Sweets and Seafoam chocolates inside of the downtown Ann Arbor store.

Angela Cesere | AnnArbor.com

From bustling retail locations in the heart of downtown Ann Arbor to small solo operations in local commercial home kitchens, chocolate is a hot retail niche this holiday season.

Local chocolate makers and chocolatiers say Christmas 2010 sales are looking sweet, from spiced almonds covered in dark chocolate to old-fashioned seafoam, a delicacy with a light and airy center encased in milk or dark chocolate.

Holiday chocolate sales fluctuate each year, said Chera Tramontin, owner of Kilwin’s Chocolates on East Liberty in downtown Ann Arbor. A lot hinges on the weather.

“If it’s cold and snowy, people don’t come downtown — they go to the mall,” Tramontin said.

Last weekend’s storm not withstanding, the weather has been good for sales.

“We are definitely up this year compared to last year,” she said. “Last year we had bad weather and sales were slow until two days before Christmas, and then we were hit hard.”

But it can be impossible to understand all holiday trends, Tramontin said. While her store had stocked hand-packed boxes of chocolate-covered pretzels for three years, this season they are a hit. So is a chocolate assortment in a decorated see-through box.

“It’s the packaging,” Tramontin said. “People want it to not only taste great but look good.”

A perennial holiday favorite is seafoam, a nostalgic confection that has become hard to find, she said. Customers drive for miles to buy Kilwin’s seafoam for holiday gift giving. “If I didn’t sell seafoam, I’d have some very angry customers,” Tramontin said.

While other businesses that sell chocolate are chocolatiers, Mindo in Dexter is the area’s only chocolate maker, said Barbara Wilson, who owns the home-based business along with her husband, Jose Meza. They make chocolate from the cocoa bean.

The couple travels to Mindo, Ecuador, to buy cocoa beans directly from the farm and ferment, dry, roast and grind the cocoa before they bring it back to Dexter.

Mindo Chocolate Makers sell baking cocoa and 100-gram and 30-gram chocolate bars in 20 flavors, from popular cherry and ginger to exotic habanero (a hot pepper), Wilson said. They’ve been picked up by the People’s Food Coop and Zingerman’s Next Door and are in 22 stores in all. Their cocoa powder is their strongest holiday seller.

This is the first holiday season Mindo has sold commercially, and changes are coming faster than Rudolph on Christmas Eve: They picked up a distributor two weeks ago, extending Mindo Chocolate’s reach in Michigan, and they launched a new website this week that accommodates Internet sales. Their first online sale came from Chicago.

Mindo Chocolate Makers began making truffles for the holiday push, including pumpkin spice and peppermint. They’re also making special-order molded chocolate for the holidays, such as chocolate stars for an area church. They’ve put together two holiday gift baskets with their cocoa powder and chocolate bars — sold at the Ann Arbor Farmers’ Market. And Zingerman’s Bakehouse picked up Mindo Chocolates to make their chess (chocolate cream) pies, Wilson said.

The efforts have seen sales increase 60 percent in December, Wilson said, but it’s hard to know if that’s because of the holidays or natural growth. “Every store we sell to has ordered more for the holidays,” Wilson said.

Nancy Biehn has been making chocolate under her Sweet Gem name since 1997 and said December can bring a four-fold increase in production. She adds staff to handle the rush.

“It hasn’t stopped being totally crazy in my kitchen since Dec. 1,” she said. While she usually works 35 to 40 hours a weeks, December means 70-hour weeks.

Christmas brings out the nuts. And the toffee and the caramel, Biehn said. While Sweet Gem started out making just truffles (these cocoa powder-dusted chocolates borrow their name from the fungus, covered in dirt and rooted by pigs), Biehn added other chocolate confections as her business grew.

Today, her chocolate covered spiced almonds (flavored with cayenne, cinnamon and ancho chile she grows in her garden ad slow roasted by her husband) are a big holiday hit.

“My husband made three more batches than usual,” she said. Sales of the canisters of truffles have doubled from last Christmas and truffle sales are also up. “We’ve sold tons of truffles,” Biehn said. “We have sold 5,000 truffles so far for the holidays. We’ve already passed what we sold last year.”

She also adds an eggnog truffle, with a white chocolate, nutmeg and vanilla bean center dipped in dark chocolate and topped with a white chocolate snowflake.

Chocolate makes for a near-foolproof gift, Biehn said. She fills orders for businesses that want gift baskets for clients and boxes for employees and well as individuals looking for a local gift.

“When you don’t know what people need, food is always a great choice,” she said. “People love the beauty of chocolate.”

This is one in a series of stories by AnnArbor.com’s Business Review about local retailers and their strategies during the biggest sales season of the year. Get more local business news by subscribing to the Business Review newsletter and breaking email alerts.

Janet Miller is a freelance writer and a frequent contributor to AnnArbor.com.