Vertical Focus: Confections
Chocolate Supply Chain: Bean to Bar None
Consumers are more conscious about the ingredients in the chocolate they buy due to vegan diets, lactose allergies, climate concerns, and ethical spending. This increased the demand for premium products and a bean-to-bar approach to manufacturing, says Fortune Business Insights data. These trends are affecting the chocolate supply chain, the report says:
High-quality ingredients: Bean-to-bar production is gaining interest and driving growth in the cocoa and chocolate market. In this process, the chocolate maker controls every step from cacao bean to chocolate bar. One of the main differences between bean-to-bar and mass-produced chocolates is the quality and purity of the ingredients.
Ethical sourcing: Consumers are paying more attention to the agro-climatic aspect of production and ethically produced beans. Sustainability issues, climate change, and unethical sourcing are driving the growth of the bean-to-bar chocolate market.
Health and wellness: A greater focus on health and wellness in the general global population is increasing the demand for high-quality ingredients. With consumers increasingly concerned about the impact of food on their health, the quality of cocoa is becoming a growing topic of conversation, therefore providing an opportunity for market growth.
Where Are My Peeps?
Peeps looked to new partnerships and product expansion to alleviate its warehouse operations challenges and stay resilient during the pandemic.
Just Born Quality Confections, the Pennsylvania factory that produces the marshmallow treats, was forced to temporarily shut in March 2020 as the virus spread. The company opted to forgo making the ghost-shaped treats for Halloween, tree shapes for Christmas, as well as heart shapes for Valentine's Day to focus on meeting the overwhelming Easter demand.
The facility resumed operations in time for the spring rush, with limited production and new protocols in place to protect employees. It also launched two unique flavors: Hot Tamale and Fruit Loops.
The company took some pressure off its operations by working its way into different grocery aisles, collaborating with brands on new Peeps-flavored products including Lofthouse sugar cookies, Kellogg's cereal, and even International Delights coffee creamer.
Skittles Tastes the Rainbow, Turns It Green
Skittles will be the first of Mars Wrigley's products to get environmentally friendly packaging starting in late 2021 or early 2022. The candy manufacturer teamed up with biotech company Danimer Scientific to develop the new, compostable packaging technology for some of its popular products in an effort to improve the environmental impact of small, flexible packaging.
The biodegradable packaging is created through a fermentation process using plant oils. The material breaks down at a reliable rate in industrial composting processes as well as at-home composting. Mars Wrigley aims to achieve 100% reusable, recyclable, or compostable packaging by 2025.
Candy Crushing It
Large global candymakers—especially those focused on e-commerce, the grocery segment, and entering new markets—found a sweet spot during the pandemic, reports CandyIndustry.com. Highlights from the report include:
- Germany's Haribo is breaking ground on its first U.S. candy factory, investing $300 million in the project.
- Italy's Ferrero Group continues to grow. The company is building its first chocolate plant in North America, a $75-million expansion set to open in spring 2021.
- Bazooka Candy Brands saw a 2% growth in year-end sales for 2020. Its e-commerce business grew significantly during the pandemic.
- Argentina confections company Arcor launched an e-commerce platform during the pandemic, which has been growing since May 2020.
- Russian candy company Slavyanka's sales suffered during the pandemic due to border restrictions and lower export sales, but is recovering through the launch of reduced-sugar products and snack bars to increase sales.
- Nestlé saw a 12% drop in its confectionery division for the first nine months of 2020 versus 2019, but e-commerce increased by 47%.
- 1-800-FLOWERS.COM increased sales by $185 million to a projected $810 million due to online shopping surges and candy sales expansion.
Hershey Turns Over a New Leaf
For the first time, Hershey plans to manufacture vegan and dairy-free products, as well as zero-sugar treats and portion-controlled chocolate, to meet growing consumer demand for "better-for-you" snacks. During the pandemic, Americans are consuming more plant-based foods, and plant-based meat sales are soaring.
The brand has already rolled out some better-for-you products, such as Organic Reese's Peanut Butter Cups in both dark and milk chocolate varieties. Hershey also partnered with sweetener company ASR Group on an equity investment in Bonumose, a startup creating plant-based food ingredients such as rare and natural sugars, to improve the taste of zero- and reduced-sugar chocolate.
Hershey's plant-based strategy comes on the heels of Nestlé confirming that vegan KitKats will be available in the U.K. later in 2021. The Swiss brand produces KitKats abroad, while Hershey sells them in the United States as part of a longstanding licensing agreement.
One Fines Upgrade
Chicago-based Ferrara Candy automated packaging operations for its Trolli Sour Brite Worms and Black Forest Gummy Bears—two of its best-selling products—at its Bellwood, Illinois, facility. The upgrade increases efficiency by bringing Ferrara's primary and secondary packaging under one roof, says a PMMI report.
After four scale and bagger systems produced efficient primary packaging, the company implemented compact case packers. The scale has a fines-removal system that minimizes the excess sugar that collects at the bottom of each bag of candy. Fines can make the package look less attractive and interfere with the seal, which needs to close as cleanly as possible, PMMI says.
Phase one involved installing the combination weighers, each paired with a low-drop vertical form/fill/seal bagger, as well as mezzanine-level conveyor connections that take the freshly made candy to the weighers. Phase two addressed secondary packaging. Four automatic case packers were installed as well as four spiral conveyors, which take finished cases up to the mezzanine level and then to palletizing.
Before these upgrades, the candies were bulk-packed and shipped to another Ferrara facility for packaging due to lack of space in the Bellwood facility. However, the team selected automated equipment that fit where it needed to fit in the plant with some reconfiguring.
Each case packer completes 23 to 25 cases per minute, key for keeping up with the upstream candy-making system, which produces 127 pounds of gummy worms every minute, the report says.