When DeMet’s Candy Co. announced on April 9, 2009, that it was going to open a greenfield manufacturing facility in Big Flats, N.Y., many observers wondered whether the producer of Turtles was sticking its neck out too far with such an investment. After all, didn’t the executives at DeMet’s, not to mention the investors at parent company Brynwood Partners, a private equity group, know there was a recession going on?
Fast-forward to more than a year later, and Lou Gerstner’s words ring loud and true - and the turtle or should we say Turtles (millions of them) are moving forward.
As David Clarke, president and ceo of DeMet’s, points out, top-line sales growth approached 15% for fiscal year 2010, which ended June 30. Projections for fiscal year 2011 hover near the same double-digit totals.
Thus, when DeMet’s acquired the Turtles brand and related assets in 2007 from Nestlé USA, the company realized that it would have to update the manufacturing facility based near Toronto. But as DeMet’s Chairman Henk Hartong explains, “When we took a step back and looked at the big picture, we realized it made more business sense to build a new facility in the U.S. rather than trying to work within the constraints of our old facility.”
In searching for sites for a new plant, a funny thing happened: sales of Turtles began to grow significantly. As Clarke points out, the company has seen 20% compounded annual growth since it acquired the brand.
“The Turtles brand had such a strong following and affection among consumers and retailers that we just needed to remind everyone they were still around to reignite the love affair,” he says.
Those reminders, which involved Clarke and his crew tweaking both the product and the packaging, fueled the surge in sales.
One of the first things that DeMet’s did upon purchasing Turtles was to restore the original formulation. The premier all-pecan product had been changed by Nestlé USA a few years earlier to include cashew pieces. In a calculated move, DeMet’s decided to return to a pecan-only recipe as well as increase the chop size of the nut.
“It was a way of getting back to the original Turtle,” says Jim Gerbo, senior v.p. of marketing. “When you have a smaller pecan, you have smaller ‘legs’ of the Turtle. The larger chop size of the pecan creates a more irregular shape, giving it more legs.”
Recognizing that there were consumers out there that also enjoyed cashews, DeMet’s opted to produce a cashew-only Turtle, as well. As for the caramel and chocolate components of the famed Turtle, neither was changed. In this instance, no one wanted to mess with success.
“We liked the buttery caramel taste as well as the chocolate, so we left them as is,” Gerbo says.
Such tweaks, while seemingly minor in the grand scheme of things, set the stage for expansion of the brand.
As Gerbo points out, “We think our attention in restoring the original tastes of Turtles has been key to our success.”
One of the details involved packaging.
“When we took over the brand, Nestlé had moved much of its Turtles volume into standup boxes,” Gerbo says. “It didn’t take long for us to realize that standup boxes and laydown boxes represent two different purchase and eating occasions. The standup box heads toward the cupboard, ready for snacking, while the laydown box is for gifting. So we decided to come back with the laydown boxes.”
The move certainly hit a chord with customers and consumers, taking advantage of the nostalgic draw of Turtles in seasonal gift-giving. To that end, DeMet’s revamped the packaging, distinguishing the Original (pecan) Turtle from the Cashew offering with more distinctive color bands.
It also made Mr. Turtle, the longtime mascot, much more prominent on the box.
“When we re-introduced Mr. Turtle onto our king-sized bar packaging, we saw a marked increase in sales,” Gerbo says. “He simply makes the packaging much more fun and engaging.”
Again, the moves were meant to “breathe new life” into what the DeMet’s management team determined were stale seasonal sales. As part of that campaign, the company spruced up the two-pack holiday standup box with seasonal graphics using a multilayer metal laminate. It also combined the Original and Cashew varieties into a combo pack. Such efforts have - in hindsight - made DeMet’s decision to invest in a new facility almost prescient. It was not, however, without its challenges.
Thus, when DeMet’s finalized a location for the new facility in 2008, the time line between shutting down operations in Toronto and beginning production in Big Flats had shrunk considerably.
The shorter window left for moving the processing lines was further complicated with the need to train new employees, many of which had never worked in a confectionery plant.
As Colin Swift, v.p. of operations, points out, most of the 100 employees’ confectionery production experience reflects their hire date - about 10 months. And while that proved a formidable task, introducing food safety and confectionery operating practices from scratch, it did allow DeMet’s to uniformly implement the highest training standards possible.
Thus, by the time the company had its official grand opening on May 11, 2009, the first of three lines that would be eventually installed was already turning out 1,000 Turtles per minute.
“We brought the second line into operation in June and had the third line going by September,” says Peter Wilson, chief operating officer. “After Labor Day, we began producing on a 24/7 basis, excluding time off for cleaning and maintenance.”
The quick ramp-up stemmed in part for the need to refill the pipeline inventory that shrank during the gradual shutdown of the plant in Canada as well as the continuing growth of Turtles throughout North America.
As Clarke notes, “The combination of the sales growth and the moving of the plant made for some very challenging times. We are extremely grateful that our customers showed patience and stuck with us.”
Considering that the three Turtle production lines today turn out nearly 100,000 lbs. a day, Swift and his crew are pleased about the progress that’s been made on the floor, not only in output, but in quality and food safety, as well.
“We recently underwent SQF [Safe Quality Foods] 3000 certification and received an excellent rating,” Wilson says. “We use statistical control practices, incorporating Pareto charts to improve throughput and reduce our loss points.”
Because the company handles nuts, strict attention is given to maintaining complete cleanout of lines when changeovers occur. A conventional clean typically takes about 12 to 18 hours, while a full allergen changeover will encompass 30 hours.
Thus, the focus remains on long runs to increase overall output and efficiencies. Currently, Wilson says the facility is running at a 70% operational effectiveness level, compared to world-class levels in excess of 85%. He’s confident, however, that the Big Flats facility will attain those numbers in due time.
Noting that the Big Flats plant uses much of the processing equipment that was in the Toronto facility, essentially “running an older facility within a new shell,” Wilson says that output and quality improvements continue to be made.
A visit to the Big Flats plant confirms Wilson’s assessment. For example, DeMet’s continues to make its own caramel, a process inherited from Nestlé USA that draws kudos from consumers.
It all begins in the caramel kitchen. There, dry and wet ingredients are batched, mixed and blended, and then pumped into steam-jacketed tank. After cooking, the slurry is transferred to a heat surge tank for additional cooking and moisture removal. A final cook produces caramelization. At this point, the caramel is cooled and transferred to a holding tank for use on the production lines.
Next, the caramel is pumped to one of three Sollich enrobing lines, one of which turns out 45,000 lbs. per day, the other two approach 25,000 lbs. each daily. Typically, a line will run either pecans or cashews.
Once the Turtles undergo cooling and head toward packaging, there are several options from the three enrobing lines. During Candy Industry’s visit, Original Turtles headed toward a Bosch Sig flow wrapping unit that individually wrapped 600 17-gm. units per minute.
The individually wrapped Turtles then proceed up a conveyor toward an Ishida scaling unit, which feeds a Schubert robotic box-forming line. The Schubert unit first takes flat stock, forms and glues the box. The boxes then travel toward four drops, which scale 7 oz. of Turtles into each box. The final stage involves placing a lid on the box before they are placed into cartons. Operating at a rate of between 58 and 68 units per minute, the Schubert unit can handle 7- 8- , 10.1- and 14.10-oz. boxes.
The individually wrapped Turtles also can be directed toward form/fill/seal baggers that handle 3.25 and 4.7-oz. bags. Packaging for laydown boxes and king-sized bars involves hand packing, necessitating temporary help.
“We hire about 80 seasonal workers ourselves,” Wilson explains. “That core number is supplemented by temporaries who join us from local temporary agencies.”
Of course, DeMet’s doesn’t produce just Turtles, although that brand does account for nearly half of its sales. Flipz, which also was acquired from Nestlé USA by Brynwood Partners in 2003, compromises about one-fourth of the company’s sales.
“At one time, Flipz was a $50-million brand,” Clarke explains. “When we purchased it, the brand had fallen off substantially to just under $10 million. Again, it was a matter of giving it some attention and building sales back up again.”
Today, Flipz are available in five varieties - milk chocolate, white fudge, peanut butter & chocolate, dark chocolate and chocolate swirl yogurt - and are produced at DeMet’s Mohnton, Pa., facility.
The 38,000-sq.-ft. facility, which is celebrating its 100th anniversary this year, turns out about 13,000 lbs. of various chocolate-covered pretzels daily. Most importantly, it actually produces the pretzels at the plant, using a steel-encased brick oven dating back to 1951.
Production begins a the mixing station where an operator will - after scaling ingredients such as flour, water, yeast, salt, shortening and other minor ingredients - mix the 300-lb. batch for about 10 minutes.
Once the dough is dumped into trough, a lift deposits the dough into a gravity-fed hopper that feeds a Reading Bakery Systems pretzel extruder. The extruder turns out about 700 lbs. of pretzels per hour.
The pretzels received a short proof and a caustic bath of sodium bicarbonate to attain the correct pH level before passing under a salter. After a 22-minute bake at 500° F, the pretzels exit the oven onto a conveyor belt that feeds a series of cooling tunnels on the second floor of the facility.
Upon leaving the cooling tunnels, the pretzels travel to one of two A.E. Nielsen enrobers. Inspectors check pretzels coming off the conveyors for proper positioning before they receive a bottom and top coating of chocolate or fudge.
After cooling, the pretzels either head toward one of four form/fill/seal baggers on the mezzanine level or bulk cartons, which are filled by hand, or are sent by conveyor to either a Bartelt or Weighpack Swifty stand-up pouch bagger.
During the entire process, operators do quality checks every 30 minutes, be it taking weights, checking tempering temperatures, labeling, code dates, leak tests, etc.
“We monitor our output at every critical point,” says Ken Wilson, head of operations at the Mohnton plant. Again, as with Big Flats, the management team at Mohnton uses statistical process controls as tools to boost productivity while reducing costs.
“Thanks to team building, we’ve been able to reduce waste by 4 % and boost efficiencies by 15%,” Ken Wilson adds.
Such team building at both facilities has enabled DeMet’s to move forward by further tweaking its powerhouse Turtles and Flipz brands.
With Turtles, the company has seen significant movement in sugar-free offerings.
“At one time, sugar-free was the largest single SKU for Turtles,” Peter Wilson points out. And while that has changed, it’s definitely on the “rebound,” he says. “We’re looking to bring back sugar-free in a big way.”
To ensure that greater consumer and customer comfort with sugar-free, DeMet’s reformulated its sweetener substitute. In the past, the sugar-free chocolate used maltitol, exclusively. Today, the sugar-free chocolate features a combination of maltitol and erythritol, which minimizes the laxative effect often associated with maltitol alone.
Peter Wilson also sees additional opportunities for Flipz, emphasizing there’s still “head room” for growing the brand.
And while Treasures, which was acquired from Nestlé USA along with the Stixx brand in 2008, resides in the more competitive chocolate pieces category featuring such players as Hershey, Mars and Nestlé in the mix, the product stands on its own, he believes.
The broad range of flavors and value price point provide a solid base for steady incremental growth, Peter Wilson asserts.
As for Stixx, the chocolate-flavored wafers featuring Butterfinger and Crunch flavors, it’s a product line that simply needs some attention. In time, DeMet’s looks to rev-up both brands.
Like Turtles and Flipz, both brands had a substantial consumer following before falling into disrepair, Clarke points out. He still sees plenty of opportunity for both, given a little TLC.
But with the company’s Turtles leading the charge, it simply comes down to prioritizing.
After all, Mr. Turtle did stick his neck out.