Still operating his general store, James Baker rented out part of Jeremiah Smith and Daniel Vose’s paper mill to set up manufacturing the following year. Business accounts record the first known sale of Baker-made chocolate on July 2, 1772.
Through the 1770s as relations between America and England deteriorated, James faced trade embargoes but continued to buy cocoa from merchants in Boston, Marblehead, Salem and Newport, often grinding cocoa for them in exchange for other goods. He even did some business with John Hannon, grinding chocolate for him during 1773, with Hannon returning business by making a chocolate delivery for Baker in 1774. Over the years, Baker’s chocolate business increased with cocoa purchases gradually dominating his business records. For a time it appears that even his brother John became involved by carting materials to and from Boston as well as helping to make and deliver chocolate. Prior to and during the American Revolution, smuggling cargo became quite common-place for many businessmen, and most likely James was no exception. Despite a possible lull in the chocolate business during 1777, operations were soon back in early 1778.
In 1779 John Hannon set sail on a trip to the West Indies and was never heard from again. The following year, James Baker took a pivotal step to shut the doors on his general store and go into chocolate production full time. Company lore maintains that in 1780 James bought out Hannon’s widow and obtained full ownership of Hannon’s business to produce the first chocolate branded as “Baker’s."
Through the 1780s and 1790s James expanded his business by making chocolate in different local mills, including the fulling mill of Edward Preston (his brother-in-law) and Daniel Vose’s paper mill. Baker might have even rented a small store front in downtown Boston to sell some of his goods. More and more of his business relied on a barter system, where he traded supplies with other merchants in exchange for ground cocoa. Business continued as a family affair when James’s son Edmund began delivering finished chocolate to customers at the age of sixteen. Several years later in 1791, at the age of twenty one, Edmund became business partners with his father. James finally retired from chocolate making in 1804, at the age of sixty-five, leaving the business in Edmund’s hands.