Fresh From ISM

Look closely and you’ll see I’m reading Cologne’s daily newspaper, the Kölner Stadt-Anzeiger, while sitting in the Bar Tabac restaurant on the next to last day of the International Sweets and Biscuits(ISM) fair. Christine Hackmann, Koelnmesse’s press officer, was kind enough to snap the photo for me, even allowing me a bit of deception in that I pretending to read German. (I convinced her that I needed a prop to authenticate my presence, given my readers’ awareness of my wanderlust and love of cafes.)

As I get ready to tackle the last day of the show, I thought it would be good to share some first impressions prior to our usual comprehensive coverage in March. Call it a pre-emptive strike into trend tracking.

Before I share some observations gleaned from the industry’s most respected confectioners, I have to relate my fleeting brush with beautiful people at Lambertz’ Chocolate Party on Monday night, the second day of the show.

Always a much sought-after invite, Hermann Bühlbecker, the flamboyant managing director of the traditional gingerbread/biscuit manufacturer, annually throws an over-the-top extravaganza featuring present and past celebrities in attendance.

Those of you that know me realize that I’m not the type that tracks the whereabouts on stars; it’s simply not my cup of high tea. Nevertheless, when I was informed that I’d have a chance to rub shoulders with Ivana Trump, Linda Evans, models Alex Wek and Petra Nemcova, even Ursula Andress, well, I couldn’t resist.

Let’s just say the place was rocking (It was held at the Waiting Room Restaurant, a beautiful place that actually once was the waiting room for Cologne’s main train station.). Given all the hurdles that candymakers faced last year, it was refreshing to have the opportunity to drink some Kölsch (beer brewed only in Cologne), enjoy some entertainment and see a stream of beautiful women parading down a catwalk with just about every product that Lambertz makes. After all, biscuits and chocolate are synonymous with smiles and satisfaction.

As it turned out, the party proved to be a bona fide celebration, one that coincided with the announcement by a host of major and midsized confectioners that the price of their confections will go up. Having been squeezed by commodity costs that reached historical highs, not only with milk and milk powder, but also with corn syrup, cocoa, oils, wheat and nuts, most candymakers have had to absorb these costs throughout 2007 without so much as a hiccup.

That situation changed in late 2007 and early 2008, starting with such notables as Nestlé, Mars and Hershey, who led it be known that enough is enough. Indeed, in chatting with a host of exhibitors at the fair to date, several large and midsized companies have followed suit, informing their customers that the time has come to make adjustments in pricing.
With margins squeezed to a point where one questions whether it makes sense to operate a business, candy and chocolate manufacturers have pushed back, hoping that this latest move will allow them to prepare for the future.

And the future does seem a bit tenuous, with the feared R word looming not only over the U.S. economy, but the world’s in general.

Whether this industry can continue to put on its long-cherished, recession-proof cloak of protection remains to be seen. I, for one, hope so, because as anyone attending the ISM fair can attest, there are a host of candymakers working hard to provide consumers with more choices than ever in high quality, indulgent, fun and satisfying products.

The price increases will help restore some semblance of costing balance for ceos tracking their financials. And it takes breathing room – read profits – to invest in automation, innovation, sourcing and personnel. There are enormous opportunities throughout the industry, but one can’t take advantage of them without adequate funding.

Besides, all of us want to return to partying in 2009.