It was challenging enough for candy makers to get through the COVID shutdowns, but now some companies are finding it even more difficult to staff their stores and factories. “It’s really hard to staff and find the workers we need right now,” says Rob Nelson, CEO of Elmer Chocolate. The Louisiana manufacturer has been posting around $98 million in annual sales, and the demand is for them to do more, according to Nelson. “Business is good, it’s just finding the people,” he says.
In addition to losing sales on Big League Chew, because Little Leagues did not form in 2020, Ford Gum & Machine Co., of Akron, N.Y., also has employment issues.
“The lingering impact of the pandemic has been a reduction in labor availability,” says President George Stege. “One good impact has been that we have become more labor efficient in the process.”
However, Armando Crespo, of Dulces De La Rosa, noted that the pandemic and related U.S. government intervention actually helped sales.
“Covid 19 and U.S. Government stimulus helped sales,” says Armando Crespo, of Dulces De La Rosa. The Mexican company based in Guadalajara had a 21.76 percent growth over the last year. She attributes it to the weak U.S. dollar, which has created inflation in the states.
Other companies, like BBX Sweet Holdings, of Fort Lauderdale, Fla., lost sales due to COVID. The pandemic impacted their wholesale and retail divisions, causing confectionery sales to cut in half to $50 million.
Loss of tourism dollars especially hit the Hawaiian Islands. According to its website, Hawaiian Host Group, was acquired in January by private investment company HHML Acquisition LLC for an undisclosed amount. Both Hawaiian Host and its sister company, Mauna Loa, claim sales have dropped 30 percent because of travel restrictions. Company CEO Ed Schultz noted in a recent statement that Hawaiian Host’s revenue has dropped from annual sales of $140 million prior to the pandemic to $100 million now.
“The Pandemic -- it has not been kind to us,” says Dave Hawk, of Gertrude Hawk Chocolates in Dunmore, Pa. “Let us start by saying that Easter is our No. 1 retail season, and it’s not advisable to close all your stores for five weeks before that season, as happened in 2020.”
He notes their fundraising was hurt, especially this past Christmas since many of their groups could not meet. But Gertrude Hawk was able to increase sales through website and wholesale accounts. Quoting his daughter and company chairwoman, Carolyn Hawk Horter, “You do not learn to be a good sailor in calm waters. Well, these are about the choppiest waters I’ve encountered in the 50 years I’ve been in the business, and all I can say is that the next generation, known as G4 (Generation 4), have done a better job than I could have, so in so many ways, things are very well. We will survive this terrible virus.”
For many large food corporations, it was a banner year as people sought comfort during these trying times. Hershey posted a full-year net sales growth of 2 percent increase over 2019.
“While 2020 was a year of unexpected challenges and hardship, Hershey demonstrated resilience and compassion,” says Jeff Beckman. “We are an important part of comfort and connection in people’s lives and our portfolio of beloved brands proved extremely relevant with consumers.”
Hershey completed it's purchase of better-for-you confectioner Lily’s Sweets, of Boulder, Colo., in a deal valued at $425 million. A Forbes article estimated Lily’s annual sales at $110 million. The company was founded in 2012 and offers low-sugar bars, baking chips and peanut butter cups.
1-800-FLOWERS.COM also saw increased business, mainly due to consumers shifting to online shopping.
“We expect this momentum to continue even as customers continue to look for ways to express, connect and celebrate,” says Kathleen Waugh. “Consumer behavior – in terms of online shopping – has changed, and the shift to ecommerce, which was dramatically accelerated during the pandemic, is not likely to revert back. Today, we are a bigger, better, stronger company than we were a year ago.”
It has been a learning experience adapting to a changing world, says Georgia Nut, of Skokie, Ill.
“We’ve learned a lot about how our team members wants/needs have changed and tried to incorporate that into our people plan as best we can,” says John Drehobl, chief sales officer. “Externally, we’ve had to adjust our sales and marketing approach from live meetings to virtual meetings, interactive webinars and by developing more content to illustrate how we can add value to their business with our products or capabilities.”
Second Nature Brands, the new corporate platform for Kar’s Nuts, Second Nature Snacks and Sanders Chocolates, also has weathered the storm, as well according to their communications consultant, Brandi Willard.
“We have seen growth in our treats category throughout the pandemic and continue to see solid growth as we transition back to business as usual,” she says.
The Madison Heights, Mich., manufacturer who acquired Kar’s Nuts and Sanders Candy in recent years, is investing heavily in new products and formulations bringing more than 25 new better-for-you products to retailers and ecommerce customers.
“The new treats, which have been designed to meet the ever-growing consumer trend for nutritionally-conscious snacking and permissible indulgence, will include Sanders Organic Dairy-free Sea Salt Caramels and Sanders Sea Salt Caramel Thins.”
“With regards to weathering the storm of this past year we have to be extremely grateful and impressed by our customers,” says Estee Farber, vice president of sales and marketing for Madelaine Chocolate Co., of Rockaway Beach, N.Y. “(We) were forced to adapt quickly to the situation and the new ways (our) customers purchased. Luckily, we are in an industry where we produce products that bring comfort and joy to so many and that was sorely needed this year.”
“We have been very pleased with our business during the pandemic,” says Kathi Rennaker of Brown & Halley. “We have seen an increase in ecommerce business and only slight decreases in our retail business.”
In an age where business can be done by video conferencing, Rennaker says, “While nothing beats seeing people face to face, we hope the use of the video calls will become common place so that we can be that much closer to all of those we work with.”
Even though the pandemic has changed the way companies do business—virtual versus in-person, increased social media presence versus in-person candy shows, Crespo believes in-person buying and new product presentation will resume.
Just Born Quality Confections, of Bethlehem, Pa., hopes to make up for last year’s losses. Matt Pye, vice president sales and marketing, says the company expects to grow this year about 6 percent over last year’s $231 million in sales, noting they had stopped production in 2020 for Halloween and Christmas to focus solely on Easter and everyday items.
“We were one of a few candy companies who closed their doors completely for six weeks at the start of the pandemic in March (2020) to protect the health and safety of our associates,” Pye says. “We re-engineered all of our processes to be CDC compliant and started back up on May 1 (2020).”
Where some lost business, others gained. Mondelez International, of Chicago, has acquired several companies over the last year including on the confectionery side, Grenade from the UK, which sells Carb Killa high protein bars. They also snatched up Hu Master Holdings, parent company of Hu Products, a fast-growing U.S.-based snacking company that makes vegan and paleo-friendly chocolates.
Even though confectionery and gum sales were down a bit for Mondelez, $10,898 million from 2020 compared to $11,641 in 2019—the entire snacking company ended 2020 up over $700 million with $26,581 million in total sales.
“Our categories were resilient, with the exception of gum which represented 5 percent of our revenue in 2020,” CEO Kirk Van de Put said in a statement. “The strength of our brands was evident, as was the dedication of colleagues around the world who executed with excellence in difficult circumstances.”
Sconza Chocolates, of Oakland, Ca., also had gains, about 10 percent, according to its president, Ron Sconza. Although he would not give an exact sales figure, he says, “I can tell you that the mogul (starch moulding) capability we added at the end of ’19 produced growth results in excess of our expectations FY ’20.”
He says they are currently installing a new high speed chocolate moulding line to make chocolate buttons, like a plain M&M.
“The line is a beast and produces 6,500 pounds per hour.” He expects another double-digit growth this year as well.
In an effort to increase business, Pearson’s Candy Co., of St. Paul Minn., launched new Salted Nut Roll flavors last year on Amazon including spicy and cinnamon churro. The company is “adapting to a balanced brick and mortar and online business model,” says Sandy Banaszak, sales and marketing coordinator. “Engaging in sponsorships and grassroot marketing initiatives,” she says the company is increasing its brands on social media and digitally. “Yes, this will change the way we do business as online and digital marketing continues to grow.”
Original Gourmet Food Co., of Salem, N.H., also cannot wait to get back to in-person meetings and trade shows but expects more virtual meetings in the future.
“It has made communication with our buyers and team much more effective and efficient,” says Toni Worobel, director of marketing.
Sarris Candies CEO Bill Sarris said Sarris had a great year.
“We supplied product to essential businesses, so we were lucky and had a great year,” Sarris says. “We expanded our online business to accommodate online shoppers.”
The Canonsburg, Pa., chocolate company is planning to build a third 85,000-square-foot manufacturing plant in 2022. They also started producing cocoa bombs.
There were a few changes to the list with the acquisition of KIND by Mars and Kar’s Nuts by Second Nature Brands. New to the list this summer are Chocolove, of Boulder, Co., at $60 million, and Pearson’s Candy Co., of St. Paul, Minn., at $45 million.
The Promotion In Motion Cos., Inc., changed its name to PIM Brands Inc., one of the Promotion In Motion Family of Companies.
Management changes include Jean Filion appointed in January as CEO of Nellson LLC, Anaheim, Calif.; Charlie Nelson, became president and CEO of Kenny’s Candy & Confections, of Perham, Minn.; and Dan Lagermeier made president and CEO of Pearson’s Candy Co., St. Paul, Minn., last summer.
Edward Marc Brands restructured at the beginning of this year and is now majority owned by ExWorks Capital. At the end of 2019, the Pittsburgh company which had $60 million in annual sales reorganized, splitting The Milk Shake Factory from the Edward Marc Brands business.
“We moved to contract manufacturing,’ says Chris Edwards, who maintains those chocolate accounts, and eventually exited manufacturing. “Without significant overhead costs, the company was in a better financial position when the pandemic hit in March. This allowed us, our team, to focus on sales and clean up our supply chain making it more efficient and cost effective.”
Now Edward Marc Brands focuses on sales, marketing, and research and development to increase their candy business, Edwards says, which currently is around $35 million annually.
American Licorice Co., of La Porte Ind., acquired Torie & Howard organic hard candy and chews confectioner. CEO John Kretchmer feels the brand is a strong compliment to Red Vines Made Simple, an all-natural, non-GMO project certified line of products. Torie & Howard also compliments recent American Licorice investments, including a minority investment in Theo Chocolate Inc., the first organic, fair trade certified chocolate maker in North America, and an investment in Mindful Nourishment, LLC, the creators of the nutritional snack Zing® bars.
And with the hot demand for baseball cards, especially with non-fungible tokens (NFTs), The Topps Co. Inc., owners of Bazooka Candy Brands, is looking to go public again. They are looking to merge with a special purpose acquisition company in a deal that could value Topps at $1.3 billion. Bazooka Candy Brands was estimated in our “Global Top 100” to do about $242 million in sales for 2020. Topps became privately held in 2007.