News & Trends
January 1, 2008
New England Confectionery Co., Inc. (NECCO®) to Become Portfolio Company of American Capital Stratagies, LTD.
New England Confectionery Co., Inc. (NECCO) announced in early January that it has become a portfolio company of American Capital Strategies, Ltd. (Nasdaq: ACAS). The asset purchase was completed on December 21, 2007.
American Capital elected to partner with president & CEO Domenic M. Antonellis and Clear Creek Capital LLC because of its belief that a renewed focus on core competencies will grow NECCO into a leader in the confectionery business. NECCO will focus on several areas of growth, including growth through acquisitions, expansion of existing product lines and introduction of new products. In addition, NECCO seeks to expand its contract manufacturing business with strategic partners seeking to outsource production to NECCO.
“In its 160th year of operation, NECCO is reborn with renewed energy and spirit,” Antonellis said. “As the oldest multi-line candy company in the U.S., our rich heritage presents a solid foundation for growth and expansion. I am extremely enthusiastic about the growth opportunities ahead for NECCO’s customers, vendors, brokers, employees and partners.”
Kellogg Company Acquires the United Bakers Group, a Leading Russian Cracker, Biscuit, Cereal Manufacturer
Kellogg Company, producer of cereal, biscuits and convenience foods, announced in mid-January that it has acquired The United Bakers Group, one of Russia’s largest cracker, biscuit and breakfast cereal producers. United Bakers’ products, marketed primarily under the Yantar and Lyubyatovo brands, are a strong strategic fit with the Kellogg portfolio. The brands hold number one or number two positions in their respective categories.
Terms of the transaction were not disclosed. With United Bakers’ 2007 net sales of approximately $100 million, the transaction is not expected to have a material impact on Kellogg Company’s 2008 operating profit.
United Bakers’ nearly 4,000 employees, including its management team, will join Kellogg Company. The acquisition includes United Bakers’ six manufacturing facilities located throughout Russia as well as its large sales and distribution network. The business will continue to be headquartered in Voronezh, Russia, and will report for Kellogg Company’s European business unit.
Turkish Company Purchases Godiva
The Campbell Soup Co. will sell its Godiva brand to Turkey-based Yildiz for $850 million. Yildiz is the parent company of confectionery and snack firm Ulker, and Godiva will join its range of confectionery products once regulatory approvals are made. Ulker, which recently earned a 57% share of the Turkish chocolate market, sees the Godiva acquisition as a prime opportunity to establish itself as a premium chocolate presence not only throughout Turkey, but also the world. Campbell first announced plans to sell the luxury chocolate brand in August, stating that the chocolates do not fit in with its renewed focus on soup-based snacks, ready-made meals and vegetable drinks.
Topps on Track for 2008 Promotions
Marketers at the Topps Co. will continue to keep their brands contemporary in 2008 with a series of fun, kid-oriented promotional programs.
One of the most high-profile is Topps’ multi-brand tie-in to the Warner Brothers live-action movie “Speed Racer,” slated for a May 9 theatrical debut. Topps’ Baby Bottle Pop, Push Pop, Juicy Drop Pop, Ring Pop and Bazooka Bubble Juice brands are participating.
This marks Topps’ first movie tie-in, reports Bill Berkowsky, customer marketing manager. It will be supported with television commercials complete with footage from the movie, display shippers that become available in late March, and a sweepstakes in partnership with Warner Brothers and the Cartoon Network. The Speed Racer initiative also includes an online component that will allow kids to log onto a Web site and propel virtual race cars around tracks complete with features like Baby Bottle Pop Mountain and Juicy Drop Pop Straightaway.
For Baby Bottle Pop, Topps will introduce a “Message in a Bottle” promotion. Baby Bottle Pop SKUs will feature a message written in food-grade. The message will prompt the child to go to a Web site and, using the Baby Bottle Pop’s UPC code, to join a virtual community, where kids may write and send messages to other community members. The whole set-up will be completely secure for children; the program has been developed so that it scrupulously adheres to the guidelines of the Children’s Online Privacy Protection Act, Berkowsky says.
Display shippers and power wings will support the Message in a Bottle promotion at retail. The promotion will encourage repeat purchases, Berkowsky explains, because “the more Baby Bottle Pops you buy, the more codes you receive and the more message bottles you can launch.”
CMA to realign with NCA
The Chocolate Manufacturers Association has announced that it will realign with the National Confectioners Association in an effort to establish a unified and solid voice of leadership for the U.S. confectionery industry. According to CMA’s board of directors, the interests of CMA’s members will be addressed through enhancements to NCA’s structure. Additionally, nine members of CMA are members of the NCA, according to NCA president Larry Graham. The re-structuring is slated for completion on March 31, 2008, the end of both associations’ fiscal years.
|NPD's Snack Fact|
|100-calorie packs not only help with portion control while snacking, they also help with portion control during lunch meals.|
|Percent of Snack Eatings by Day Part*|
|Total Snacks||100-Calorie Packs|
|With Breakfast Meal||6||2|
|Instead of Breakfast||5||2|
|Between Breakfast & Lunch||13||17|
|With Lunch Meal||10||19|
|Instead of Lunch||3||3|
|Between Lunch & Dinner||27||27|
|With Dinner Meal||5||3|
|Instead of Dinner||2||1|
|After Dinner Dessert||12||7|
|Late Night Snack||10||13|
|*Data is for the two years ended in June 2007
Source: The NPD Group/Snack Track
NPD's SnackTrack® service goes beyond purchase data to present a complete picture of when, where, how, why and by whom products are being consumed. Learn more by contacting NPD at 866.444.1411; www.npd.com
Spangler promotes key executives
Spangler Candy Co., Bryan, Ohio, a 101-year-old family-owned company, recently implemented a series of promotions.
Dean L. Spangler was elected to the position of chairman and chief executive officer. Kirkland B. Vashaw has become president, and William G. Martin has been elected executive vice president and chief financial officer.
Dean Spangler is the great-nephew and Vashaw is the great-great nephew of Arthur G. Spangler, who founded the company in 1906. Dean Spangler is the son and Vashaw is the grandson of Harlan G. Spangler, who was president of the company from 1967 to 1976. Vashaw represents the fourth consecutive generation of the family to lead the company.
Dean Spangler has been CEO of Spangler since 2000. Vashaw joined the company in 2003 to manage licensee relationships with Disney. He has been a vice president since 2006.
Martin joined Spangler in 1999 as controller; he was promoted to vice president and chief financial officer in 2006
In other personnel news at Spangler, Mike Rosenblatt, a veteran of several candy industry marketing positions, has been named a brand manager. His brand management responsibilities include Saf-T Pops, Circus Peanuts and Dum Dum Pops. n
Barry Callebaut Closes Morinaga Deal
Zurich-based Barry Callebaut recently announced the closing of its transaction with Japanese food company Morinaga. The deal includes the acquisition of cocoa and chocolate production equipment at Morinaga’s Amagasaki, Japan, site. Barry Callebaut hopes to upgrade the production lines to generate a total production capacity of 20,000 tons a year. The companies also partnered for a 10-year supply agreement for 9,000 metric tones annually, which doubles Barry Callebaut’s Japanese sales volumes. Liquid chocolate deliveries are expected to commence within the next year. n
Just Born Announces Appointments
Just Born, Inc., Bethlehem, Pa., recently announced several new staff appointments. Timothy C. Jones has joined the company as the global supply chain commodity manager. William J. Thompson is manufacturing finance manager - Peanut Chews. And Chris Schneeweiss has signed on as brand manager for Peeps, seasonal brands and jelly beans.
As global supply chain commodity manager, Jones is responsible for developing and managing supplier relationships, analyzing commodity trends and forecast information, and supporting new product development projects. Jones has more than 20 years of operations and supply chain experience.
In his new position, Thompson is responsible for all daily finance activities at Just Born’s Philadelphia facility, including financial reporting, analysis, controls, product/inventory costing, payroll, accounts payable, and capital expenditures evaluation. He has 28 years of corporate financial experience.
Schneeweiss’ role will include developing and implementing business plans for all Peeps and seasonal brands. He is a veteran of Nabisco Brands and Hershey Foods.
Companies Face Price-Fixing Allegations
Some of the world’s largest chocolate companies, including Mars, Hershey and Nestlé, are facing price-fixing lawsuits in the United States. The allegations began in November 2007, when the Canadian Competition Bureau asked the companies to surrender pricing strategy documents. While the documents contained no proof of any wrongdoing, three lawsuits were filed last month—one in New Jersey and two in Pennsylvania. Last summer, cocoa prices reached their highest levels since 2003, and the lawsuits will undoubtedly increase pressure on the companies, which are already dealing with higher material costs. Additionally, the International Cocoa Organization recently reported that the cocoa deficit is greater than previously thought—242,000 tons compared to earlier projections of 156,000 tons—due to poor weather conditions in Africa and South America.
Sweet Achievement Acknowledged
Meijer, Inc., the Midwestern chain of supercenters, was recognized for its candy category superiority last year when Confectioner named the company its 2007 Retailer of the Year. The annual award acknowledges a strong commitment to the confections category, creative merchandising and ethical business behavior, among other achievements. Few would argue that the best retailers are the ones that recognize this essential truth: It’s about the consumer.
That’s the way it is for the 2007 Retailer of the Year, which of course had a lot to do with why Meijer clinched our annual award.
The team that leads this chain of 179 supercenter stores spanning five Midwestern states excels at figuring out what matters most to consumers and serving it up to them.
Meijer’s frequently touted tagline — “higher standards, lower prices” — does a good job of communicating its positioning in the marketplace. The chain’s prices tend to be lower than most supermarkets, but a bit higher than Wal-Mart. It’s important to note, however, that value at Meijer is not just about price, but product quality and convenient consumer shopping solutions.
Meijer gets its price/value message out to consumers via a “Weekly One Stop” advertising circular. In addition, about a year ago, the company rolled out an ambitious price-cutting initiative — its “Price Drop” program of unadvertised specials. Price Drop features price reductions on a rotating assortment of roughly 5,000 products. New items are added to and dropped from this special sale assortment on a weekly basis.
We made the recognition official in late fall when the Retailer of the Year Award was presented during a company meeting held at Meijer’s headquarters in Grand Rapids, Mich.