sweet & healthy [ March 31, 2010 ]
March 31, 2010
getting fresh: The Easter candy cometh
For candy addicts (and confectionery retailers), it’s one of the most wonderful times of the year.
This week, stores are turning up the volume on their seasonal displays (offering last-minute deals such as World Market’s ”25% off select merchandise” sale). And just days from now, children the world over will wake up to find baskets brimming with sweet treats (Marshmallow Peeps, jelly beans, miniature chocolate eggs, etc.) delivered by a certain bunny (perhaps better known as mom or dad).
As for me, I look forward not to the 8-hour drive to Ohio this Thursday (ugh), but to the familiar plastic grass-filled, lime-green woven basket that will greet me Sunday morning. Like coloring eggs with my father, searching for my basket on Easter morning is a tradition my mother still upholds. I may not be a child anymore, but I’m still a kid at heart.
Case in point: As mentioned in “Sweet Talk” in the March issue of Retail Confectioner (www.retailconfectioner.com), I recently participated in the Woman’s Club of Evanston’s (Ill.) annual benefit show, which raised funds for the Center for Independent Futures (www.independentfutures.com). My roles included June Cleaver, Ms. Green (M&M) and an even more unusual one: trabbit. (You read correctly.)
Now, I’ve been a bunny before. In a childhood dance recital, I represented April as the Easter Bunny in “Calendar Girls.” (Ironically, one of this year’s show parodies was of the same song, and I was cast in that, too.) But never a turtle. And never a trabbit -- that is, part rabbit, part turtle; the costume merged both species through the use of bunny ears and a tale, and a brown shell and pink underbelly. (Again, you read correctly.)
As also mentioned in Retail Confectioner, gift-giving is a big part of the Woman’s Club show. In addition to receiving spring flowers from fellow cast members and friends out in the audience, I also received an unexpected present from another trabbit: Candy Teeth Bubbagum (“Chew the Gum! Eat the Teeth!”) and Lip Pops Lollipops (“In Your Face Sucker!), both shaped like rabbit teeth.
I decided to regift both the teeth and the pop in an Easter care package for my nephews (ages 8 and 3), who no doubt will enjoy looking like Bugs Bunny as much as I enjoyed hopping and sliding across stage. Said care package also contains Florida’s Natural Brand Healthy Treats Fruit Snacks: Au’Some Fruit Nuggets & Sour Strings, individually wrapped inside colorful plastic eggs. (Turns out there’s more to Easter than Marshmallow Peeps, jelly beans and miniature chocolate eggs.)
Recently, my art director purchased another unfamiliar Easter treat (for himself): Dubble Bubble Egg Shaped Bubble Gum in assorted fruit flavors, from Concord Confections. And my cover story trip to World Market last month revealed innovative confectionery treats for the spring season from manufacturers both domestic and international. (Check out “Bazaar Behavior” in this month’s Retail Confectioner.)
As for me, I intend to dodge the Easter aisle this week, opting instead for outdoor activities that free my mind of much-desired candy and chocolate … at least until Sunday. Let’s hope the weather holds.
According to Planalytics Business Weather Intelligence, the warm front many states are experiencing will result in “pent-up demand” for spring spending and “stellar conditions for Easter shopping and dining.” Sourcing BigResearch, Planalytics says that U.S. consumers will spend an estimate $13 billion during Easter week, with weather having a strong influence on purchasing patterns and holiday plans.
Weather in Eastern Canada, Northeast U.S., the Ohio Valley and the Southeast will be sunny, warm and dry, resulting in “high volume holiday shopper traffic and restaurant business,” Planalytics reports. Meanwhile, an increased chance for heavy showers and thunderstorms, some severe, late in the holiday weekend “could curtail shopper traffic” in the U.S. Plains, Western Great Lakes and Prairies. In addition, cool weather and frequent periods of rain “are likely to hamper holiday shopping and travel” in the Western U.S. and Canada.
Good thing that like the U.S. Postal Service (and Peapod, the subject of Retail Confectioner’s February cover story), the Easter Bunny delivers come rain, sleet or snow. (I’m counting on it.)
Editor’s Note: In the midst of the many Easter e-blasts I’ve received these past two weeks came one in honor of an upcoming day of celebration: Earth Day. Bloomsberry & Co. April 22 marks the 40th anniversary of this environmental incarnation and, as such, Bloomsberry is promoting its Climate Change Chocolate Bar which “comes with a verified TerraPass offset of 133 pounds of carbon dioxide impact. In addition, each bar purchased is in a wrapper that has 15 tips for lightening your environmental impact.” As Bloomsberry suggests, “Do your part to help the earth and eat chocolate!”
Group purchases F&F Foods
Yesterday, Boston-based Gordon Brothers Group announced it had sold its senior secured debt in F&F Foods, Inc. a leading manufacturer of branded and private-label cough drops, mints and candies headquartered in Chicago, to Universal Holdings, an affiliate of GemCap. The move was followed by Universal subsequently purchasing the assets of F&F Foods from assignee Development Specialists, Inc., thus making Universal the sole owner. As part of its acquisition, GemCap has injected new equity into the business to fund continued long-term growth. The sale, which closed Feb. 26, 2010, culminates a year-long process whereby Gordon Brothers sought to successfully turn around the candy manufacturer.
"Gordon Brothers has built its reputation on finding hidden value in companies undergoing change,” says Robert Himmel, co-president, commercial & industrial division, for Gordon Brothers. “We first recognized the underlying enterprise value in F&F Foods in January 2009, and ultimately acquired the company's senior debt in a private transaction in March 2009.The company had excellent product awareness, a strong market position and a dynamic pipeline of active purchase orders. We recognized, however, that it lacked the capital base and credit availability with its existing lenders to manufacture product, continue operations and fulfill orders."
Placing F&F Foods into an assignment for the benefit of creditors, an insolvency proceeding that operates under state law, was a strategic move that proved to be a great benefit to the company, explains John Wheeler of Development Specialists Inc., the Chicago-based firm selected by Gordon Brothers Group and company shareholders to serve as the assignee.
"The assignment process allowed for operational and financial decisions to be made that moved the company from a loss to an operating profit in less than a year,” he points out. “As a result, several hundred jobs in the Chicago area were directly or indirectly preserved and an operational turnaround was successfully completed."
During the turnaround process, Gordon Brothers provided ample capital to fund regular operations while closely monitoring all major financial decisions and expenditures on a weekly basis. The company also provided the additional capital necessary to support the company's turnaround, including funds to purchase new equipment that led to The Hershey Co. awarding F&F Foods a multimillion dollar annual packaging contract for its Jolly Rancher Sticks product line.
Sugar Factory opens second Las Vegas store inside casino
Las Vegas-based confectionery retailer Sugar Factory (featured in the January 2010 issue of Retail Confectioner) opened its second Las Vegas location inside the Miracle Mile Shops at Planet Hollywood Resort & Casino last month.
The new sweet shop broadens the company’s offering with the addition of a café that will include distinctive milk shakes, a crepes menu, a full-service coffee bar and a range of desserts.
“We are excited to expand the Sugar Factory brand and open our second Las Vegas location in Miracle Mile Shops at Planet Hollywood Resort & Casino,” says Rollie Sturm, a partner for Sugar Factory, LLC. “This venue will offer all of the Sugar Factory confections our clients have come to know and love, and introduce our first dining concept with delicious café fare and distinctive dessert selections.”
Best known for its world-famous Couture Pops -- chic, bejeweled stems that sparkle with replaceable lollipop heads -- Sugar Factory carries a vast selection of confections, from classic favorites such as salt water taffy and pretzels drenched in milk chocolate to modern creations such as white chocolate-covered fortune cookies and s’mores popcorn. Sugar Factory’s collection of fun and chic retail merchandise also includes stylish T-shirts, hats, coffee mugs, glassware and more.
The company plans to open two additional locations in Las Vegas later this year.
For more information please visit www.SugarFactory.com.
Italian chocolate private-label supplier expands to North America
In a move designed to expand its private label chocolate manufacturing program, Lecco, Italy-based ICAM S.p.A., which is owned and operated by the Agostoni family’s second generation, has opened a North American sales office in Los Angeles. Operating under the brand Agostoni Chocolate, the new sales team will be working directly with North American retailers and consumer brand companies to develop premium chocolate products based on a proven private label service model that offers a wide range of stock and custom options.
Carla Baroni, who heads up exports for ICAM, says the decision to open a direct sales office in the U.S. was based on “our strong impression that North American consumers have become very sensitive to chocolate product quality.
“Our recent North American projects confirm retailers there are leveraging premium private label chocolates that emphasize organic farming or unique cocoa origins to create a positive halo effect for top private-label brand families,” she says. Noting that chocolate “is an emotional product category,” Baroni believes “consumers are passionate about chocolate and that excitement can create loyalty that strengthens the entire private label line.”
Family operated since 1946, ICAM is an Italian “modern artisan” farm-to-bar producer of premium all natural chocolate for industrial, food service and private-label customers. A leader in organic cocoa processing (approximately 20% of all global supplies), with an eco-sustainable state-of-the-art cocoa processing facility and a commitment to producing premium product from responsibly grown and sourced raw cocoa, the company produced nearly 7000 tons of private label product, the equivalent of 70 million 100-gm. chocolate bars, last year.
The family’s approach to value-added private label chocolate making is rooted in their commitment to in-house production of all the cocoa-related ingredients in its finished chocolate. Unlike most chocolate producers, the Agostoni family winnows and grinds raw cocoa in-house to produce top-quality cocoa liquor, butter and powder -- crucial basic ingredients for finished chocolate, which they also produce in their factory in the Lake Como region of Italy.
According to Baroni, the company’s ability to deliver strong product quality and differentiation is what sells private label chocolate for their customers.
“Private label sales performance has a lot to do with a great story on the label, followed immediately by a great consumer experience of taste,” she says.
In addition, Baroni believes the Agostoni system of sourcing from unique origins plus total supply chain control gives the company two important advantages.
“First, we are able to deliver strong differentiating claims for the customer’s label -- like organic or single origin or Fair Trade,” she explains. Second, we deliver a premium flavor profile a competitive price for the retailer and the consumer.”
In a recent taste test of organic and Fair Trade chocolate by Which? magazine in the United Kingdom, Tesco’s Finest Fairtrade, supplied by ICAM, won Best of Test honors.
For more information, visit www.agostonichocolate.com.
More chocolate manufacturers moving to ethical sourcing
A recent report issued by London-based Euromonitor International says that chocolate manufacturers are introducing more Fair Trade and “ethically sourced” chocolates in response to consumers searching for more socially conscious products.
The report cites Swedish confectionery manufacturer Cloetta AB’s recent decision to launch a range of Fair Trade chocolates under the Cloetta Good name as an example of this trend. The new line will include four varieties -- milk chocolate, mint crisp, hazelnut and cashew with cranberries -- made from certified Fair Trade chocolate.
Although Fair Trade chocolate remains a niche category in the Swedish market, increasing consumer concern for ethically sourced products may pave the way for future growth.
Interestingly, the author of the report notes that Kraft's recent takeover of Cadbury and a number of strategic decisions elsewhere in the industry could contribute to the commercial success of Fair Trade chocolate lines such as Cloetta Good not only in Sweden, but also in other developed markets around the world.
Global demand for certified Fair Trade chocolate has been increasing steadily, and Euromonitor’s research suggests that international chocolate manufacturers have tried to adjust their corporate strategies accordingly.
Chocolate supplier and manufacturer Barry Callebaut, for instance, stated that global demand for Fair Trade-certified products increased by 50% in 2009. Furthermore, the company expressed its commitment to increase investment in order to meet the requirements of ethical certification such as UTZ and the Rainforest Alliance.
Nevertheless, Barry Callebaut's Chief Executive Juergen Steinemann remained unconvinced in a recent interview about the level of large-scale demand for Fair Trade-certified chocolate and expressed his belief that it will still take many years before certified products become mainstream, Euromonitor reveals.
The report also speculates on the implications to Fair Trade chocolate following Kraft's takeover of Cadbury last month. The American manufacturer, which incurred a £7 billion debt to fund the takeover, might embark on a cost-reduction plan that could slow Cadbury's current strategic expansion into the Fair Trade segment, the author says. Cadbury's deal with the Fairtrade Foundation in mid-2009 was seen as the movement's biggest coup, as Dairy Milk represented the first mass-market chocolate brand in the world to use Fair Trade cocoa.
Euromonitor points out that Jonathan Horrell, UK corporate affairs director for Kraft Foods, recently responded to such questions by stating that the company already worked "extensively" with sustainably-sourced cocoa and coffee suppliers and planned to maintain Cadbury's contracts with the Fairtrade Foundation. Despite these assertions, there was no confirmation whether Kraft would continue Cadbury's ongoing talks to expand its use of Fair Trade cocoa beans to other brands.
The Euromonitor report concludes that many industry observers believe that the new Kraft-Cadbury organization might opt to focus on the extension of Kraft's Rainforest Alliance agreements for other Cadbury brands. Kraft recently signed up with the Rainforest Alliance, an organization which promotes conservation and fair dealings with small growers, to supply some of the coffee beans used for its Kenco coffee brand.
Fair Trade campaigners, however, believe the Rainforest Alliance's production requirements are far less strict than those regulating certified Fair Trade products. This is because the Rainforest Alliance places an emphasis on the preservation of the environment and the sustainability of production rather than on strict production standards and the payment of higher prices to achieve social justice.
Crucially, the Rainforest Alliance scheme offers no minimum or guaranteed price, although farmers under the scheme still gain financially in relation to those who are not signed up to any such scheme.
Kraft's strategy is in line with other large manufacturers in the industry, including Mars, Inc., which outlined in April 2009 its plans to use only "sustainable" cocoa for its products by 2020. The M&M's and Snickers maker teamed up with the Rainforest Alliance and drew up plans for the not-for-profit organization to certify 100,000 metric tons of cocoa annually for use in its products.
Euromonitor’s research suggests that if large international confectionery manufacturers continue to sign up to the Rainforest Alliance's schemes, this might provide an excellent business opportunity for local chocolate manufacturers in developed markets to differentiate themselves via Fair Trade certification. Companies like Cloetta AB in Sweden could seize the opportunity to specialize in the “niche Fair Trade market” and target more demanding ethical consumers who are willing to pay a premium for products offering 'stricter' social value properties.
The analyst points out that this could, in turn, lead to further segmentation of premium chocolate confectionery into semi-ethical (and more affordable) Rainforest Alliance-certified chocolate offerings and more expensive Fair Trade-certified lines. Where and when each company -- small or large -- should position itself is a decision that should be taken sooner rather than later, before the number of players in the ethical chocolate market becomes too large for it to take on new entrants, the author concludes.
For more information, visit www.euromonitor.com.
Sweet of the week: Ritter Sport Milk Chocolate with Strawberry Créme
Ritter Sport of Waldenbuch, Germany has introduced a new limited-edition Milk Chocolate with Strawberry Crème bar, featuring rich European milk chocolate filled with light dairy cream and pieces of real strawberries. Sales proceeds will go to breast cancer research, as Ritter Sport has pledged to donate $100,000 to help promote awareness, ensure early detection and, hopefully, find a cure. The product will hit retail shelves by October, just in time for National Breast Cancer Awareness month. The 100-gm. bars are packed 12 to a sleeve with eight sleeves to a master case; in addition to open stock, they will be available in a 108-ct. floor display featuring tear-pad coupons with a face value of $0.50. The suggested retail price per bar is $1.99-$2.49.
For more information, call 1-201-368-2624 or visit www.ritter-sport.com.