Candy maker Ferrero may not be done growing in Bloomington-Normal even though the company's new $214 million chocolate plant is now officially open and ramping up production of Kinder Bueno candy bars and other products.
Ferrero North America President Michael Lindsey said during Monday's ribbon-cutting ceremony the company could add to the plant's 200 new jobs.
"There is both room for expansion and we have plans for expansion. I can't talk about them now, but we want to continue to invest in Bloomington," said Lindsey.
He said other companies investing in Bloomington are seeing the same things Ferrero does.
“The combination of great employees, really good infrastructure and proximity to major-major metro markets make it an absolutely ideal place to invest,” said Lindsey.
When it reaches full production all Kinder Bueno products sold in the U.S. will come from Bloomington. Ryan Peterson, vice president of candy and impulse merchandising for Walmart, said that matters to the giant retailer.
"Over 86% of our Walmart customers have told us it is important for retailers to carry American-made goods. And the Kinder Bueno facility will help Walmart continue to provide the chocolate our customers crave, made right here in the U.S.," said Peterson.
Bloomington Mayor Mboka Mwilambwe said the start of production at the new 169,000-square-foot chocolate plant is a "sweet day" for the community. Ferrero's original Bloomington plant continues to make several other brands of candy.
Port strike
It’s likely 45,000 union dockworkers on the east and west coasts will walk off the job at midnight Tuesday morning, disrupting supply chains for everything from bananas to car parts. The International Longshoremen’s Association's contract dispute with the U.S. Maritime Alliance that handles ports in the U.S. could cause price increases and delays for chocolate makers as well.
Lindsey said that prospect is a minor concern.
“A little bit. Not so much on this center [the Bloomington plant] frankly because that’s the benefit of having American production is that we have supply now inside of our borders. We do have other products that are still brought in from overseas and we hope we get to a reasonable conclusion to the port strike as soon as we can,” said Lindsey.
Cocoa shortage
Poor harvests in Ghana last year caused by drought, aging trees, and plant disease have pushed prices for cocoa used to make chocolate significantly higher. West Africa produces more than half the cocoa in the world. Since then, prices have remained volatile, thanks to futures trading by large chocolate makers that are trying to assure a steady supply and by speculators. Some candy makers have raised prices.
Lindsey acknowledged price pressure is a concern for mainstream chocolate makers like Ferrero that may have to pay close to the cocoa price point previously occupied by premium chocolate makers and niche "bean to bar" producers.
“We’re hoping not much. We’re trying to absorb as much of the extra cost as we can as a company. We’re trying to make sure we’re as efficient in our usage. We’ve seen costs start to stabilize in the cocoa market overall. No one can predict where the prices will go. What I can say is that we’ll continue to make sure our products are affordable to the American consumer,” said Lindsey.
Illinois also is home to the company’s first North American Innovation Center. Those research and development labs are in Chicago. The company has a plant in Franklin Park making Butterfinger and Baby Ruth, and a Chicago factory manufactures Keebler products. Ferrero has other facilities in Georgia, Kentucky, Ohio, Arizona, Pennsylvania, and New Jersey.
Candy design
Ferrero said Kinder is the most popular chocolate brand globally, but only 17th in sales in the U.S. among mainstream candy brands. Ferrero hopes production in the Bloomington plant will help change that because of shorter time to market and fresher products on shelves.
It may be hard to discern how companies such as Ferrero can succeed at taste making for the sweet-toothed public interested in a layered ingredient experience. The road is long from something like, say, Charleston Chew, invented in 1922 whose mass market popularity started to fade after a few decades, to longer lasting commercial successes such as Milky Way first made in 1924, and Three Musketeers which dates to the 1930s.
Transitions aren’t easy to see as they happen. For Lindsey, the North American Kinder Bueno investment by Ferrero was born in research and testing.
“We went through iteration after iteration after iteration globally to produce what ended up becoming the Kinder Bueno. It’s the mix of the wafer, the crunchy crispy wafer, with the hazelnut cream. Then you have the chocolate on top. Then you have the enrobing [(a thin layer of chocolate or icing] on top. It’s really four fundamentally different layers which add a whole different experience to the product,” said Lindsey.
He said the Kinder Bueno has the highest repeat buy rate in the world of any product he has dealt with.
