Siblings propel family-owned Edward Marc Brands to success
Innovative product launches, close Costco partnership helps Pittsburgh-based company continue to evolve
“Most people miss Opportunity because it is dressed in overalls and looks like work.”
— Thomas A. Edison
Thomas Edison’s description of opportunity still rings true today. And one could easily substitute the word entrepreneurship for opportunity. As Chris Edwards, co-ceo of Edward Marc Brands explains, many potential employees cite their desire for working in an entrepreneurial environment when applying for jobs at the Pittsburgh, Pa.-based chocolate enterprise.
“Be careful what you ask for,” he warns them, because entrepreneurship often entails rolling up one’s sleeves and doing whatever is necessary to get the job done. He, together with his coo brother Mark, and executive v.p. sister Dana, is very familiar with Mr. Opportunity showing up at the door.
After all three enjoyed serving the nation by working in the White House in George W. Bush’s administration (2000 – 2005/07) within the logistics and operations department, the trio decided to return to the family business — one that had its roots going back 104 years when their great-grandparents Charlie and Orania migrated from Greece and settled in Pittsburgh.
At-a-Glance: Edward Marc Brands
Headquarters: Pittsburgh, Pa.
Sales: $60 million (Candy Industry estimate for 2018)
Plants: 2 (Pittsburgh – 85,000 sq. ft. and Trafford – 10,000 sq. ft.)
Production Lines: 3 enrobing lines, 6 automated belt coaters
Products: Panned confections, enrobed chocolate specialty items, bark, truffles, chocolate confections
Brands: Snappers Crafted Snacks, Edward Marc Chocolatier, The Milk Shake Factory
Chris Edwards, ceo; Dana Edwards Manatos, executive v.p.; Mark Edwards, coo; Dona Edwards, president; Jeff Edwards, senior adviser
When the three received a call from their uncle in 2005 saying he was planning to retire and needed someone to continue the family business being run by their parents, Jeff and Dona, Mark was the first to move back, leaving the glamour and glitz of Washington to his siblings.
In doing so, he learned the art of making handcrafted chocolate from his uncle and parents, all of whom worked in the family’s retail chocolate shop and “factory” in Trafford, Pa. The former movie theatre that had been converted into a chocolate shop, which included a retail shop and living quarters on the first floor, a production space in the basement and offices and storage space on the second floor, proved to be not only a training ground for Mark and his siblings, but also an innovation incubation center for the trio.
“It all happened here, on this marble table,” says Chris, while providing Candy Industry a tour of the 10,000-sq.-ft. Trafford facility.
Here refers to the breakthrough product, Snappers, that jumpstarted the family business from a modest $200,000 annual revenue to a projected $60-million operation in 2018.
Thus, when Dana and Chris committed to leaving the White House for the family business in 2007, they did so without totally pulling up D.C. stakes. Looking Mr. Opportunity directly in the eye, the trio submitted an RFP (Request for Proposal) to set up a chocolate shop in the Pentagon, which they received despite several competing bids.
“The Pentagon is the world’s largest office building, with 30,000 people,” Chris explains. “The shop gave us a lot of visibility and enabled us to pick up a host of government contracts. It became a huge success.” It also provided the Trafford factory needed sales as it phased out its retail shop.
“Overnight” success fueled a story by the Washingtonian magazine about the “Politics to Sweets” operation, now known as Edward Marc Brands. In committing to combine their talents to the family business, one of the first steps the trio took involved reinvigorating the image, look and impact of the company.
Serendipitously, Rachel Moyer, a Northeast region Costco buyer, happened to come across the magazine article featuring the new chocolate shop in the Pentagon. That revelation dovetailed with the fact that her son would always order a daily milkshake from The Milk Shake Factory, a retail arm of Edward Marc Brands, while visiting his grandfather in Pittsburgh.
Her son’s unwavering loyalty to The Milk Shake Factory milkshakes led to Moyer discovering that the fourth-generation Edwards siblings had revitalized the company’s soda fountain origins into a modern-day dessert destination. The concept actually was Dana’s final project prior to graduating from college, one that had captured the imagination of Pittsburgh’s populace.
So Moyer connected with Chris. After all, Costco has often encouraged local companies to submit product concepts for evaluation, banking on the idea that regional affiliations go a long way in driving sales. Hence, Moyer asked Chris what the company does best. After Chris responded that no one beats Edward Marc’s caramel, Moyer tossed out a challenge: “Bring me a product and we’ll consider it.”
Coincidentally, there already had been some thought amongst the trio about producing a “Terrapin”-like product, Terrapin being the company’s name for the trademarked Turtles confection, which is a pecan and caramel cluster enrobed in chocolate.
“We make a great Terrapin,” Mark says. “We had been looking at the sweet snacking market and trying to come up with the next wave of innovation. Snappers proved to be a perfect fit given our manufacturing capabilities with regards to Terrapins.”
And although laying a dab of caramel on a bed of pretzels and then enrobing them top and bottom with milk chocolate and a dark chocolate drizzle doesn’t sound terribly complicated, it’s easier said than actually done.
After scouring the supermarket shelves for the right kind of pretzel — it’s important to remember that the caramel is deposited hot, which complicates the process — the Edwards crew came up with the Snappers sensation.
After Moyer took a bite of the sample, all that was left was finding a way to have the first of four truckloads ready in four months.
“All we had was the product,” Chris recalls. “There wasn’t any packaging, no pretzel supplier, no high-end production line. But we had to do it.”
Did it they did, despite the first pretzel supplier bowing out of the contract at a critical period. The supplier thought it could replicate the Snappers product on their own, Mark says.
It soon became clear that the Edwards clan would have to get into the pretzel business real fast.
“We had to make sure that the pretzel contained the same ingredients as those already printed onto existing pouches,” Mark explains. Typically, getting dies made and formulations perfected takes three months. They only had three weeks supply left of their existing pretzels.
Mark, using a combination of bravura and begging, managed to convince a supplier of pretzel equipment to allow him to access its R&D center and finalize the formulation and pretzel shape. In doing so, he was able to find a co-packer willing to handle the order.
“They would have to run the pretzels 24/7, which was definitely a culture change for them,” he says.
And just as the last run of existing pretzels from their original supplier was coming to an end, a new shipment rolled into the Trafford plant. A plea for a “just-in-time” miracle had been answered. When the last of 26 pallets was loaded into the Costco truck, the realization that Snappers was going to be a major hit sunk in.
The move toward “scaling up” began, with the acquisition of used equipment designed for more volume production being the first step. The search for a larger plant also began, a search that ironically led them to the Lawrenceville neighborhood, the same area that their grandfather and grandmother had set up their first chocolate shop in Pittsburgh.
It truly was full circle, Chris says.
The explosion of Snappers through Costco required the group to quickly expand pretzel production, turning to four pretzel co-packers to meet the demand. Again, the need to maintain product integrity during a tricky production process required constant monitoring.
In 2015, the company took over a 50,000-ft. building in the Lawrenceville neighborhood, setting up a base for high-volume, high-quality production. An “Alpha” line for the production of Snappers — custom-built by Mark and Jeff was installed. A second line — supplied by Aasted — followed, with a third to be installed this quarter.
To diversify their product portfolio, the trio developed a panned dark chocolate coconut almond confection, again a case of opportunity reappearing in sweaty overalls.
“We got a call around 5 p.m. early last year about participating in Costco’s MVM (multi-vendor mailers) program, a coupon program requiring a supplier discount,” Mark explains. “They wanted an offer from us by 10 a.m.”
Given Mark’s finance background — it’s what he majored in college — Chris was confident his brother’s penchant for efficiency and containing costs could deliver a product that would meet this new challenge.
“We were looking at a $7-million order,” Mark adds. Drawing on their chocolatier skills and exacting production calculations, the company submitted Dark Chocolate Coconut Almonds as their item for consideration.
The lightly salted almonds, which are rolled in a layer of sweet coconut shavings and covered in premium dark chocolate, made the cut. The initial volume was estimated at 1.1 million lbs. It turned out to be 1.8 million lbs.
“We were making deals with multiple co-packers to meet that extra 800,000 lbs.,” he says.
Given the initial MVM success with Dark Chocolate Coconut Almonds, it’s not surprising that the item has become one of the company’s best-selling items.
“We expect Dark Chocolate Coconut Almonds to surpass Snappers as our best-selling item this year,” Mark says. And, as with Snappers, the item will be rolled out into mainstream grocery chains, such as H.E.B., Giant Eagle and Ahold.
To accommodate the expected demand, the company just recently installed four Tinsley 74-in. automated belt coaters, each capable of turning out 700 lbs. per batch.
“On the first day of operation, we hit 30,000 lbs.,” says Mark. “We expect to hit about 45,000 lbs. on a daily basis.”
In conjunction with the automatic belt coaters, the company installed a FLtècnics horizontal form/fill/seal pouch machine that uses roll stock to create the packages. It operates at a speed of 140 pouches per minute, greatly speeding up packaging efficiency as well as reducing labor. Total investment for the new facility and equipment to date exceeds $3.5 million.
The increased output and efficiencies work well for the company since it will reveal a new panned seasonal item at the Sweets & Snacks Expo, a speculoos (a cookie butter) center sitting atop cinnamon pretzels and enrobed in white chocolate.
Edward Marc Chocolatier looks to launch a milk chocolate toffee-coated almond item while simultaneously watching the progression of its Caramel Medallions, thin soft creamy batch caramel medallions bottomed in chocolate and accented with a chocolate cord, gain traction.
Chris chuckles about that new product innovation: “We had forgotten to turn on the pretzel feeder while running Snappers and this beautiful Caramel Medallions product came out.”
Other items certain to attract and possibly garner acclaim: Hot Chocolate Bark, which features milk chocolate with crispy marshmallows, puffed rice and a contrasting cord, and Dark Chocolate Strawberry Pistachio Bark, dark chocolate layered with oil-roasted pistachios and tart strawberries broken into individual pieces.
Chris attributes a good part of the company’s success to Costco, which helped propel the chocolate shop/factory into an “innovation factory.”
Since it began working with Costco five years ago, Edward Marc Brands has become one of the club store’s biggest vendors.
“They really helped us grow our business,” he says. “As a result, we have a Costco-first strategy; everything we do goes to Costco first. Plus, their buyers have a hands-on philosophy regarding product development. They even get involved in the thickness a bark should be and the type of inclusions they want to see.”
At the same time, the club store chain realizes that diversification is key to an entrepreneurial company’s growth and encourages partners to expand into other channels, such as C-stores and grocery chains.
Fortunately, for Edward Marc Brands, diversification, as in the expansion of the The Milk Shake Factory came knocking on their door. The first knock came from PNC Bank, which had just built a new office building downtown.
“They were looking for someone local to set up a retail shop on the first floor,” Chris explains. “Given that The Milk Shake Factory had evolved into one of the most popular ice cream shops in the city, they wanted their employees to be able to enjoy a treat in their own building.”
Despite the costs and risk of operating a retail store at such a premium location, the Edwards siblings once again opted to go in, encouraged by their parents Dona and Jeff.
As expected, the downtown shop was designed to become the flagship store, complete with a modern retro look.
“We were initially afraid the PNC location would cannibalize sales from our South Side store location, which isn’t far from there,” Chris says. “But people at the South Side store see that more as a chocolate shop whereas downtown is more of a dessert destination.”
It certainly proved to be just that for the Tull family, whose children loved choosing classic malt milkshakes as well as gourmet offerings such as Bananas Foster and Caramel Macchiato. Their fondness turned into another opportunity for the Edwards family, an investment partnership.
“Thomas Tull, who’s the founder of Legendary Entertainment and a minority owner of the Pittsburgh Steelers, and his wife, Alba, ceo of Tull Investments, were interested in investing in a local business,” Chris says. “They wanted to support a hometown company and saw an opportunity to expand The Milk Shake Factory nationally.”
The plan is to open up 25 new stores in the Northeast, using milk from the Tull’s Rivendale’s farm, which combines natural, sustainable farming with innovative techniques and technology, to produce ice cream onsite.
Reportedly, milk from Jersey cows provide a high butterfat content of 4.84 percent, about 25 percent more than average milk, as well as a higher protein content, which hovers around 3.95 percent, about 18 percent more than other breeds’ product. Jersey milk also has 25 percent more calcium than other milks.
Plus, there’s an added benefit. “It makes the best ice cream I’ve ever had,” Chris adds.
“The Tulls will provide the investment and we’ll develop the stores, manufacturing our own ice cream in the store,” he says. “No one’s doing that. It will be farm to table. And our chocolate will be 100 percent sustainable.”
As he explains, the new technology will dramatically cut down on the time it takes to create a milkshake, simply from the time it takes for a scoop of ice cream to properly blend into a milk shake. Thus, instead of requiring at least 2.5 minutes to make a milkshake, it will now take only 45 seconds.
And while efficiency will be a key element in the new Milk Shake Factory stores opening up in the Northeast — seven in the Pittsburgh area this year — transparency and sustainability are also key drivers.
“We’ll be 100 percent transparent from the dairy and chocolate side,” Chris says.
That commitment, however, goes beyond the Milk Shake Factory. This year, Mark will head up the company’s newest initiative, Edward Marc Farms. Having attended a World Cocoa Foundation Partnership meeting last October in Washington, D.C., the coo came away both inspired and agitated.
“It was eye-opening to say the least,” Mark says. “Sustainability is about eliminating poverty, child labor and deforestation. It comes down to what we are as an industry and what we are going to do about it. Our entire success is based on chocolate confections. We talk about people, products, markets, processes, but we don’t talk about poverty in our own supply network. Nonetheless, it’s all interconnected. We don’t want chocolate to be a luxury for future generations; we want it readily available.”
As a result, Mark asked himself and his brother and sister what value could their company offer. After visiting farms in the Ivory Coast and working closely with Barry Callebaut and its Cocoa Horizons program, he enlisted the help of his wife Meaghan, and they determined it was necessary to get involved.
Thus, Edward Marc Farms (EMF) was born, its two-fold mission to grow cocoa profitably and to improve the human living condition on cocoa farms.
“What we want to do is provide the infrastructure whereby farmers can lift themselves out of poverty,” Mark says. “It’s not a charity, but a long-term investment spanning 25 years.”
This year the company looks to lease 1,500 acres in West Africa whereby half will be devoted to cocoa, the remaining half to diversified crops such as corn, wheat, rice and other cash crops. Within that acreage, 30 acres will be devoted to nutrition, that is feeding the community.
“We’ll bring in clean water, education and health care,” he says. “It’s a way of commercializing cocoa, creating a community and allowing children to go to school and play. There will be also opportunities for multiple industries to invest, encouraging diversified incomes, such as raising chickens.”
The goal is to expand the program after the first year to encompass 700 farms, each comprising 1,500 acres and impacting 280,000 farmers over 25 years.
“Our goal is to increase income by 40 percent in the first year,” Mark says. “We take away the risk and expenses of farming, pay for the planting of new trees as well as other infrastructure costs. It is a test model that we look to make repeatable, allowing other chocolate companies to get involved.”
When asked how cocoa farmers responded to the idea, the coo said they simply had one condition: “’Bring us clean water,’ they said. ‘We’ll do anything.’”
It’s all about building trust, Mark asserts.
And still growing Edward Marc Brands, Chris adds.
“We will all still work together,” he says, “but our roles have expanded as the company has evolved. Mark will head up EMF, Dana will oversee The Milk Shake Factory, and I will still deal with the branded side. But this will be the mission of our company and what we want to accomplish [full sustainability and transparency].”
Once again, it’s another opportunity the siblings aren’t walking away from.