Issue #7: Summertime

First of all, sorry for the slight delay on this week's issue, I gotta admit that I am a bit mad at LinkedIn. I had my draft all ready and once I wanted it to publish, the browser refreshed and lost my draft, so I had to start it all over again.

Nevertheless, I am happy to re-share the issue and finally bring some cool news on the confectionery front for all of you. I also did some operational and aesthetic changes with a brand new logo and also a LinkedIn, and Facebook and right now I am working on a Google site that will serve as a temporary blog until I get a proper domain.

But here it is!, a new edition of Confectionery Chornicles for your eyes only, so enjoy and explore all of the new things that confectionery offered in the last week.

Sweet Spotlights 🍭

Perfetti Packaging

Perfetti Van Melle, a confectionery giant, is honing in on two key strategies to enhance its market reach and consumer engagement:

-Leveraging impulse-buying tendencies.

-Focusing on the long-term functionality of product packaging.

The company recognizes the importance of these factors in marketing and is tapping into them to maximize consumer reach. This approach is part of Perfetti Van Melle’s broader strategy to adapt to evolving market trends and consumer preferences, ensuring that their products not only appeal to customers at the moment but also provide lasting value.

Perfetti Van Melle’s success in the confectionery market can be attributed to its research and innovation strategy, which has led to a significant market share, particularly in the Indian sugar confectionery market. The company’s management credits this success to differentiations not only in products but also in marketing, advertising, pricing, and distribution. This multifaceted approach has allowed Perfetti Van Melle to maintain its leadership position.

Looking forward, Perfetti Van Melle aims to optimize its supply chain planning process to navigate the complexities and volatility of today’s market. The company’s investment in supply chain transformation is expected to foster innovation in planning and decision-making across the over 150 countries where it operates. By focusing on both consumer-facing strategies and internal operational efficiencies, Perfetti Van Melle is positioning itself for long-term success in the global confectionery landscape.

(Perfetti van Melle taps long-term functionality and impulse-buying placement as major confectionery strategies (foodnavigator-asia.com))

Pepper vs Salt

Dr Pepper has carved out a unique position in the beverage market, distinguishing itself from competitors like Coca-Cola and PepsiCo with several competitive advantages. One key strength is its high brand recognition and strong reputation, supported by a wide sales and distribution network and a product line that includes healthy, low-calorie options. The brand’s diverse and extensive product mix caters to a broad audience, which has been bolstered by strategic acquisitions.

Another significant advantage for Dr Pepper is its bottling contracts with major beverage companies, which have helped establish its portfolio and presence in the American market. This, combined with a strong foothold through diverse brands, has enabled Dr Pepper to maintain a solid market position. Moreover, Dr Pepper’s performance in the U.S. carbonated soft drinks (CSDs) market remains solid, even as the industry faces challenges and they are competing amongst true giants.

Dr Pepper’s growth is also attributed to its lower exposure to overseas markets, which has shielded it from the currency headwinds that have affected its chief competitors to focus on local competition. With most of its revenue generated domestically, Dr Pepper has not been as impacted by the fluctuating international currency rates that have negatively affected the top lines of Coca-Cola and PepsiCo.

In summary, Dr Pepper’s competitive advantages lie in its strong brand, diverse product mix, strategic bottling contracts, and a focus on the domestic market that insulates it from international financial fluctuations. These factors have contributed to Dr Pepper’s ability to outpace its competitors and secure a leading position in the beverage industry.

Cocoa Culture 🍫

Cocoa Price as of 17/06/20

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Prices seem to have stabilized a bit after the large hike we had last month but it is expected to fluctuate much more given the uncertainty that was given by Western African countries in the midst of cocoa resolution over the long term and poor projections for this year's harvest.

Get creative

Candy manufacturers are facing a significant challenge as cocoa prices have soared to record highs. Over the past year, the cost of cocoa has more than tripled, with prices reaching over $11,000 per metric ton in April, a stark increase from the previous average of around $2,500 per metric ton. This surge is attributed to a weaker-than-expected crop, sparking concerns about supply and causing the price spike. The situation is exacerbated by issues in West Africa, the world’s largest cocoa-producing region, where crop disease and low farmgate pricing have led farmers to switch to more profitable crops.

The steep increase in cocoa prices is putting pressure on candy makers to get creative with their business strategies. While large companies like Hershey, Mars, Ferrero, and Mondelez are currently shielded from the impact due to long-term hedging contracts, these contracts will expire by 2025, leaving them vulnerable to high market prices. The industry is now bracing for the cost implications, which could significantly affect how these companies manage their businesses and approach innovation.

The current cocoa crisis is the result of a confluence of factors. Adverse weather conditions, supply chain disruptions, and increasing demand have all contributed to the soaring prices. Ghana, the second-largest cocoa producer, is considering delaying the delivery of up to 350,000 tons of beans to the next season, which could send prices even higher.

As a response to the rising costs, candy makers may have to explore alternative ingredients, adjust product sizes, or even innovate new products that use less cocoa. Consumers may also face higher prices for chocolate products, as manufacturers pass on the increased costs. The situation highlights the delicate balance between agricultural production and global commodity markets, and how disruptions in one part of the world can ripple through to affect industries and consumers worldwide. By getting deeper into all of these creative methods we can develop:

-Reformulating Products: Companies are considering changing their recipes to use less cocoa or substitute it with alternative ingredients that can mimic the taste and texture of chocolate.

-Product Innovation: There’s a push for developing new types of candies that require less cocoa. This could lead to the introduction of new flavors and textures that rely on other ingredients.

-Size Adjustments: Adjusting the size of chocolate products to maintain price points without compromising quality is another strategy. This might mean smaller chocolate bars or candies with the same price tag.

-Supply Chain Management: Firms are also looking at ways to optimize their supply chains, such as by working more closely with cocoa farmers to ensure sustainable and cost-effective sourcing.

These strategies reflect the industry’s adaptability and commitment to delivering the chocolate products consumers love, even in the face of challenging market conditions.

(https://www.cnbc.com/2024/06/15/candy-makers-cocoa-prices.html)

Herhey's Saints

I had the great pleasure of visiting Hershey, PA a few years ago to visit the mecca of chocolate production in the US. I was incredibly surprised at the generational efforts that the Hershey family has applied to create a vast wealth around their stakeholders specifically their employees. Hershey built a town to support and grow the wealth of their stakeholders in its time and now that efforts have transcended into the environment and sustainable sourcing of cocoa nowadays.

Recognizing the importance of sustainable practices in today’s global market, Hershey has developed a robust framework to ensure that their operations not only yield economic benefits but also foster social and environmental standards. This framework, known as the Shared Goodness Promise, is the cornerstone of Hershey’s mission to make a positive difference in the world.

The Shared Goodness Promise is built on five foundational pillars that guide Hershey’s actions and aspirations:

1. Driving Responsible Business Growth: Hershey’s dedication to ethical business goes beyond compliance; it’s about creating value that benefits all stakeholders as we mentioned in the intro. This includes ensuring the integrity of their supply chain, ensuring fair trade, and investing in sustainable innovations that propel the company forward without compromising on moral grounds.

2. Reducing Environmental Impact: Hershey is actively reducing its environmental footprint. Initiatives such as reducing greenhouse gas emissions, improving water conservation, and transitioning to renewable energy sources. Additionally, Hershey is revolutionizing its packaging solutions to be more eco-friendly.

3. Activating Remarkable People: Hershey’s success is powered by its people. By nurturing a diverse and inclusive workforce, providing development opportunities, and ensuring a safe and respectful workplace. Moreover, the company extends its reach by engaging with local communities and supporting social programs.

4. Improving Lives Across Communities: Hershey’s philanthropic spirit shines through its numerous initiatives aimed at community betterment. Hershey is committed to making a tangible impact on society. The company’s global presence allows it to address local needs effectively, building stronger, more resilient communities.

5. Nourishing the Lives of Children: At the heart of Hershey’s social responsibility is a deep-seated commitment to children’s welfare. Through comprehensive programs that focus on nutrition, education, and well-being, Hershey is helping to shape a brighter future for the next generation.

In essence, Hershey’s Shared Goodness Promise is a testament to their belief that business success should not come at the expense of the planet and its inhabitants. It’s a holistic approach that balances economic growth with the well-being of people and the environment, ensuring that Hershey’s legacy is long-lasting.

(Hershey promotes ethical sustainability (confectionerynews.com))

Flavor Fusion 🤯

Not your average footlong

Subway has rekindled the joy of cookie lovers by announcing the return of their much-loved Footlong Cookie. Initially introduced as part of Subway’s Sidekicks menu, the Footlong Cookie quickly became a sensation due to its generous size and delicious taste. The decision to bring back the cookie comes after a customer petition and overwhelming demand, highlighting the treat’s popularity.

The Footlong Cookie’s comeback is more than just a menu addition; it’s a morale booster for many Americans. A recent survey revealed that 70% of respondents felt that indulging in a Footlong Cookie would brighten their day, with even higher percentages among younger demographics like millennials and Gen Z. This overwhelmingly positive response has led Subway to work diligently to ensure an ample supply of the cookies to meet the unprecedented demand. The return of the Footlong Cookie is part of Subway’s broader efforts to innovate and enhance its menu, which includes the introduction of bottled sauces and new signature wraps.

(Subway is bringing back the footlong cookie after it disappeared for four months | CNN Business)

Da big one

The king of line categorization is back! Reese's is introducing yet another product to their line in their Jumbo Cup. I wrote an article a while ago praising Reese's ability to vary greatly in their categorization to reinvent themselves from time to time up to the point of boosting sales seasonally.

This time they have upsized in terms of downsized which is an unorthodox approach in this economy and the snacking trend. Nevertheless, Reese's is one to go against the grain and do their own thing in terms of categorization hence the introduction of this jumbo cup that is equivalent to 4 average-sized peanut butter cups.

The Jumbo cup is an attempt to be more fulfilling to consumers for their snacking time as more people are substituting their meal times for snacking times. Therefore, introducing a bigger more satisfying version of their peanut butter cups will present a more attractive option to consumers alike.

(https://www.hersheyland.com/products/reeses-jumbo-cup-milk-chocolate-peanut-butter-cup-2-8-oz.html)

Sugar Rush (Facts and Stories about your favorite snacks and candies)🧁

The Nerdiest of candies

When we think about the candies that shaped our childhood we go through a nostalgic journey in which we firmly recall the flavor and the image of certain candies that were very present throughout our afterschool hangouts. Candies in our generation were known to have heavy media investment with many iconic commercials and ads, and also very novel in terms of presentation and packaging which made it easy to push a bunch of sugar into our system. One of these iconic examples is the candy Nerds, which was a cash cow for Wonka (Ferrara now) for most of the 90s and 2000s.

Nerds candy has delighted sweet tooths since its inception. The candy’s journey began in 1976 when David Klein and his wife Judy Klein set out to create a unique confectionery. Their vision was to produce a candied version of a popular breakfast cereal, but after several attempts, they ended up creating the tiny, tangy, crunchy candy we now know as Nerds. The Kleins’ innovation laid the groundwork for a new kind of treat that combined both sweet and sour experiences in one.

The official launch of Nerds candy came in 1983 under the Sunmark Corporation, which produced them through the Willy Wonka Candy Company brand. This period marked the beginning of Nerds’ rise to fame, with their distinctive dual-flavored boxes and playful, colorful packaging capturing the hearts of candy lovers everywhere.

Over the years, Nerds have seen an evolution in both flavor and form. While originally available as small boxes containing two separate flavors, the range has expanded to include a variety of spin-off products like Nerds Rope and Nerds Gumballs. The candy itself is made by coating sugar crystals with additional layers of sugar, giving them their characteristic shape and texture. Despite changes in ownership, with the Ferrara Candy Company now producing Nerds under the Ferrero Group, the candy has retained its iconic status.

Today, Nerds stand as a testament to the power of innovation in the confectionery industry. They’ve not only survived but thrived through decades of changing tastes and market competition. From their early days as a novel idea to their current status as a beloved classic, Nerds candy continues to be a favorite for those who enjoy a playful and tangy treat. As they move forward, Nerds candy remains a vibrant part of the candy aisle, promising to bring sweetness and a dash of nostalgia to future generations.

(Nerds Candy (History, Flavors, Pictures & Commercials) - Snack History)

That wraps up this cool confection section (holy rhymes) which confirms my double effort to finally publish issue #7. But it was all worth it. I am going to double down on marketing efforts to spread the good word and make the newsletter more widely accessible. So stay tuned cause cool things are coming your way and as always, reach out if you have any suggestions for the newsletter.