Candy Manufacturers Add Health, Sustainability to Production Operations

Buoyed by a wave of steady growth, North American confectioners are lowering operating costs and climbing aboard the healthy-eating bandwagon.

By Kevin T. Higgins, Managing Editor

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Health and candy traditionally weren't mentioned in the same breath, but times are changing for American confectioners.

A growing body of research tying moderate consumption of chocolate to cardiovascular health looks like a lifeline for a snack segment vulnerable to unhealthy-eating accusations. The merits reside primarily with dark chocolate, and the antioxidant flavonoids it contains is contingent on the process used. But major manufacturers are seizing on the opportunity to adjust their processes and recast their products as a good-for-you indulgence.

Not to be left out, non-chocolate candy makers are enhancing the nutritional value of their products. The Polish manufacturer Otmuchow SA recently tripled capacity on its gummy candy processing and packaging line to 2,500kg/5,512 lbs. per hour and incorporated a dosing and mixing system from Bosch to meter in vitamin premixes, along with fruit juices and flavoring.

At the urging of their trade organization, U.S. confectioners are beginning to include nutritional information in a front-of-pack labeling system known as Treat Right. The graphic presentation mirrors the Facts Up Front program championed by GMA and FMI and includes calories per serving information.

If you're going to talk the nutritional talk, you have to walk the complementary processing walk, and manufacturers are adjusting their processes accordingly. Reduced calories and nutritional enhancements can blunt junk-food invective, and manufacturers are engaged in additional efforts to burnish their reputations as responsible corporate citizens. Those efforts are helping sustain steady growth.

Times are good for confections when the economy stinks, and this segment has enjoyed strong growth in recent years, both internationally and in North America. Citing retail sales data from IRI, the Packaging Machinery Manufacturers Institute in a just-released study reports that chocolate candy retail sales grew 3.8 percent last year to $12.5 billion. The non-chocolate segment is half the size but grew at twice the rate to $6.9 billion, up 6.4 percent. The only sour note was gum sales, which slid 5.7 percent to $3.4 billion.

Those figures understate the market size. They omit foodservice and vending channels and don't factor in industrial sales. PMMI calculates chocolate alone rang up $17.7 billion in overall 2011 sales. Ground cocoa beans, the raw material of those products, topped 126,000 metric tons in 2013's second quarter, a 32 percent increase from Q2 2007. And domestic consumption is a laggard compared to emerging markets in Asia and South America. To meet burgeoning demand, manufacturers are installing systems to enhance the accuracy and control of their processes and reduce waste.

Born again E-misers

Best practices and lean manufacturing principles are driving change throughout food manufacturing, and candy is no exception. In many cases, the initiatives are nurtured by sustainability programs that minimize waste and contribute cost savings that bolster the bottom line.

That path is being followed at Just Born Inc., a Bethlehem, Pa., candy maker that counts Mike & Ike jelly bean-like candies, Hot Tamales and marshmallow Peeps in its brand portfolio. With the backing of the company's then-president, "a bunch of volunteers came together in 2003 to start our green program," relates Bill Slater, Just Born's environmental, safety and health manager. The initial awareness and education focus evolved into a comprehensive initiative that included prioritizing equipment and infrastructure upgrades that drive down energy costs.

Lighting upgrades to LED with occupancy sensors in offices and some production areas were made, with T-8 fluorescents replacing older fixtures in most of the firm's 400,000-sq.-ft. production area. In April, a reuse/recycle program culminated in a landfill-free declaration for the Bethlehem operations (similar status is envisioned for the firm's Goldenberg's Peanut Chews facility in Philadelphia), when a compacting system from Sustainable Waste Solutions (SWS), Souderton, Pa., was installed to handle the 8 percent of nonrecycled trash. SWS hauls the compacted material to Conshohocken, Pa., were it is incinerated in a waste-to-energy facility.

"People are looking for transparency, and they want to do business with companies that do the right thing," notes Matt Pye, Just Born vice president-trade relations and corporate affairs.

The firm's highest profile green initiative involved a former Circuit City warehouse the firm acquired and upgraded to LEED Gold standards in 2009. Upgrades included a new roof with extra insulation and two chillers that reduced energy costs 44 percent compared to a conventional system, using ASHRAE 90.1 (2004) as a baseline. Water use also is substantially lower than typical. The Lehigh Valley Branch of the Delaware Valley Green Building Council honored the project in 2010 as the region's top example of sustainable facility design, construction and management practices.

Half of the 600,710-sq.-ft. building is held at 65° F with low humidity and dust-free air to maintain product quality during storage, a particularly important consideration for a seasonal product like Peeps. Surplus space allows Just Born to address logistics issues: Other candy companies warehouse product there for a cross-docking operation. "Transportation is a big cost for a lot of companies, particularly if you're shipping LTL [less than a truckload]," says Pye. "We're going to the same customers" as the warehouse's other tenants, making the co-loading arrangement mutually beneficial.

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