Getrude Hawk Chocolates gets back to branded basics
After selling its ingredients division to Barry Callebaut in 2017, Gertrude Hawk Chocolates is refocusing on its roots.
Deciding to carve out and sell two-thirds of your business — your successful business — comes with a lot of risk.
But Dave Hawk wasn’t worried about it.
Instead, the chairman of Gertrude Hawk Chocolates was focused on returning to what his grandmother, Gertrude, began in Northeast Pennsylvania in 1936 — making chocolates for fundraising and enjoyment.
“That’s the legacy, and that’s what I was interested in,” Hawk said. “I feel that part of the business is kind of like an heirloom. My job is to take care of it and pass it to the next generation.”
In late 2017, Gertrude Hawk sold its thriving ingredients division to Barry Callebaut Group, which has pushed to expand its footprint in the market serving bakers, ice cream makers and other food manufacturers. Gertrude Hawk retained its namesake brand, fundraising offerings, wholesale operations and Frango mint production — along with about half of its 500 employees.
Barry Callebaut CEO Antoine Saint-Affrique said in 2017 the acquisition added new capabilities and technologies to the chocolate maker’s toolbox.
“The acquisition allows us to expand our product portfolio into new markets and offer an even wider range of products and services than before,” he said. “Gertrude Hawk Ingredients will play a cornerstone role in our Specialty and Decorations business and we intend to further build on their team and their capabilities.”
Hawk never imagined Gertrude Hawk’s ingredients division would mushroom to produce more than 30 million pounds a year when David Speakman, coo at the time, suggested the company begin making miniature peanut butter cups in the early 1990s. But it did, and Gertrude Hawk has been “riding the rocket” ever since, Hawk said.
The company was already producing ingredients in 12-hour shifts 24/7, and Gertrude Hawk couldn’t take it any further without applying more resources.
Enter Barry Callebaut. Dave Johnson, former president of Barry Callebaut Americas, had initially approached the company two years before about buying the ingredients division. In 2017, Gertrude Hawk was ready to explore the idea.
“I felt much freer about selling because it was established on my watch,” Hawk said. “It became something that I felt more comfortable with. They have taken over, and they’re going to be able to grow that business.”
The sale, which closed Nov. 30, 2017, included Gertrude Hawk’s Dunmore, Pa. manufacturing facility and the equipment associated with ingredient production. Gertrude Hawk agreed to move its brand manufacturing and administrative operations to its 160,000-sq.-ft. warehousing and distribution facility across the street, a building once owned by Casual Sportswear.
Untangling and separating operations — and renovating a building for food manufacturing — is tough enough, but the timing didn’t make it any easier. Gertrude Hawk began making plans in July 2017, not long after signing a letter of intent, and began moving equipment in September that year.
“It’s not what you’d call a recommended business practice to try to move in the middle of your season, but we survived,” Hawk said. “Our people were great. They rallied and said, ‘We have to do this.’”
Hawk said those who’ve stayed with Gertrude Hawk have been pleased with the decision, including R&D Manager Greg Zarnoski, who’s been with the company for 40 years.
“Riding the rocket of ingredients, the brand kind of lost in the shuffle,” he said. “We didn’t pay that much attention to the brand because we couldn’t. Now we can, so there’s exciting things in the pipeline.”
Since some equipment stayed with Barry Callebaut, Gertrude Hawk also installed additional machines in the new facility. Everything was up and running by February 2018. All told, the company spent $15 million moving, renovating and investing in equipment.
In August, Gertrude Hawk hosted a grand opening marked by installing a time capsule in a cornerstone. Hawk’s granddaughter, Julia, is charged with opening it in 50 years, at age 61.
When Candy Industry visited last September, the company was in the process of moving into its brand-new office space, which features in the entryway a portrait of Gertrude Hawk in her 30s in front of the family home in Dunmore.
Hawk said Gertrude would never have predicted this future for her little business, which she began to bring in extra cash during the Great Depression.
“My grandmother would absolutely be flabbergasted,” he said. “She had no dream of anything like this ever happening.”
And now, the Hawks can continue to pay it forward. The sale helped fund the Hawk Family Foundation, endowed with $24 million. Donations will support causes in Northeast Pennsylvania, naturally.
“This is where it all started,” Hawk said.
In addition to refocusing on the brand and the company’s other operations — expected to bring in $50 million in 2018 — Hawk also hopes to improve Gertrude Hawk’s online capabilities.
“To me, this is just a continuation of what we’ve done for the last 80 years,” he said. “Nothing stays the same. You just have to continue to go out and meet the customer. The customer hasn’t gone away. People are as interested in chocolate today as they were 50 years ago. We just have to meet them.”