Newsletter.

Factory closings in Illinois, South Carolina

Increased cost efficiency has resulted in the closure of manufacturing facilities by Brach & Brock Confections and Russell Stover Candies. Brach will close its 67,000-square-foot plant in Sullivan, Illinois, resulting in the layoff of

nearly all the 55-60 employees. "We need to consolidate operations to become more competitive and efficient in the candy industry," says Ken Uhlarik, plant manager. The plant, slated for closure April 30, produces individually wrapped starch jelly candies, and tableted candies. To aid employees, a job placement firm has been hired, and in-house job training sessions will be held for three months. The factory has been in operation since 1928 as the Lucy Ellen company. It was purchased in 1967 by S&S Laboratories before it was purchased by Brach & Brock in 1975. Based in Chattanooga, Tennessee, Brach operates plants in Chicago; Winona, Minnesota; and Delavan, Wisconsin ... Russell Stover Candies will close its Marion, South Carolina manufacturing plant by May 1 for cost efficiency reasons, says Co-President Tom Ward. "The plant is designed to hand-dip candy exclusively ... and the lay out made it impractical given the efficiencies in our new plant." Last summer, Russell Stover opened a 462,000-square-foot plant in Corsicana, Texas. The South Carolina plant employs 600 people year-round, and up to 1,100 during select holidays. These employees, says Ward, will be offered the opportunity to transfer to other Russell Stover plants. Ward says there are no plans to close additional manufacturing facilities.

M-B Candies sold to Rucker's

M-B Candies, Inc., Cicero, Illinois, has been acquired by Rucker's Wholesale and Service Co., Bridgeport, Illinois, and now operates as Rucker's Makin' Batch Candies, Inc. "We've always been interested in manufacturing our own product and this seemed like the time with the offer from M-B Candies to sell," says Chad Rucker, director of operations. "They were looking to sell, and it suited our interests. Our main interest was in their peanut butter log," he says. Rucker's plans to double production over time, and increase the number of M-B employees from 18 to 50 over a two-year period. Currently, it is building a 14,000-square-foot plant in Bridgeport near its distribution center, and will move operations there from Cicero in May. The new plant will use all the equipment from the Cicero facility, and all plant workers have been offered jobs at the Bridgeport plant. Bill Dyer, former owner and president of M-B Candies, will serve as a consultant at Rucker's for a three-year period.

Nestle' gains power, Kraft achieves balance

Two industry giants are tightening their hold on the growing energy bar market with the acquisition of PowerBar Inc. by Nestle USA, and the Balance Bar Company by Kraft Foods. The acquisition of PowerBar, the leading U.S. manufacturer of energy and nutrition bars, includes its Canadian and European subsidiaries. The purchase will provide Nestle with significant growth opportunities in the fast-growing nutrition sector. "This trend, coupled with Nestle's nutrition know-how and worldwide research and development capabilities will allow us to grow this business and expand it globally," says Joe Weller, Nestle chairman and CEO. Headquartered in Berkeley, California, PowerBar operates a manufacturing facility in Boise, Idaho, and a distribution facility in Charlotte, North Carolina. The fate of the 275 PowerBar employees is not yet known ... The acquisition of Balance Bar, a leading maker of nutrition/energy bars, by Kraft Foods was completed through BB Acquisition, Inc., Kraft's wholly owned subsidiary. Based in Carpinteria, California, Balance Bar will report to Kraft's Callard&Bowser confections business in Rye Brook, New Jersey. "Balance Bar clearly is aligned with consumer trends in health and convenience, and will make a great addition to our product portfolio," says Dave Johnson, president of the beverages, desserts and snacks division.

Thorntons enlists new growth strategy

Following the failure of Thorntons plc, the U.K.-based speciality chocolate manufacturer, to achieve profit expectations for the 28 weeks ended January 8, it has enlisted a change in growth strategy. During this period, operating profit fell six percent to 12.4 million [pounds sterling], and profit after exceptional items fell by 4.9 percent to 12.2 million [pounds sterling]. Overall sales, however, rose 7.5 percent to 94.3 million [pounds sterling]. "The market is changing and is increasingly demanding novelty, value and creativity and we are responding to that challenge. We are also exploring other avenues to maximize and benefit from the increasing strength of the Thorntons brand name ..." says Chairman John Thornton. In order to focus on strong profitable growth, Thorntons plans to accelerate the development of its e-commerce business; increase new product development initiatives with a strong focus on the family-share market; pursue alliances with greeting card shops; and direct funds toward improvements in existing stores to enhance customer service. Coincidence or not, Chief Executive Roger Paffard left Thorntons by mutual agreement last month.

World's Finest aligns with Renders Digest

Chicago's World's Finest Chocolate, one of the nation's leading chocolate sales fundraisers, will increase its selling power through an alliance with QSP, Inc., the fundraising subsidiary of The Readers Digest Association. "What we're looking to do is to provide our customers with the best chocolate program and offer them the best magazine and catalog programs," says Howard Zodikoff, executive vice president, World's Finest. The 200 representatives in World's Finest United States and Canada sales force, and 300 of QSP will combine the product lines they offer for sale by schools and other organizations. Privately-owned, World's Finest will continue independent operation of its cocoa growing and chocolate manufacturing facilities. "This strategic alliance ... allows World's Finest to focus on its core strength of manufacturing premium chocolate," adds Edmond Opler, president, World's Finest.

Sherwood to reduce labor shortage impact

Sherwood Brands Inc., Rockville, Maryland, will adjust its production scheduling to reduce the impact of labor shortages on revenue and profits. The company's labor supply problem has prevented sales from rising higher, and has caused overtime and related labor costs to run above what was anticipated. "We have enough business to run second shifts at our manufacturing facilities in Rhode Island and Virginia, but we cannot hire all of the people we need to staff these additional shifts fully because of all the extremely tight labor market conditions in these areas," says Uziel Frydman, president and CEO. Sherwood's revenue growth continues to exceed expectations by the company, who expects to report earnings over $10 million for the second quarter of fiscal 2000. Although it expects to report a loss for the second quarter, third quarter revenues are anticipated to double from last year's $5 million and exceed $10 million. Sherwood manufactures branded confectionery products and gift items.

Cadbury reports nine percent growth

Last year, sales revenue for Great Britain's Cadbury Schweppes plc grew by five percent to 4.3 billion [pounds sterling], with its confectionery business showing a strong performance. "Most of our major business units produced strong results, with our key chocolate companies growing profits by an average of nine percent. There was also a resurgence in many of our emerging markets, with excellent performances from India and Malaysia," says John Sunderland, chief executive. Cadbury's Russian confectionery business increased its volume by five percent and reduced losses; and Wedel, Poland's leading chocolate brand, was successfully integrated with Cadbury's Poland business. "China had an excellent year, growing volumes over 90 percent, and reducing losses, and is on track to break even during 2000," adds Sunderland. Cadbury's confectionery volumes were flat for the year.