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.
In the mid 2000s, management recruited a Six Sigma black belt to kick-start a continuous improvement focus. "Six Sigma is a tool of lean, and lean has evolved to become a broader approach to eliminating the seven forms of waste," notes Ron Nelson, Just Born's director of manufacturing, himself a green belt. The initiative has grown to include a number of formalized programs, including visual factory, 5S (Sort, Shine, Set in place, Standardize, Sustain) and SMED, short for single minute exchange of dye. Variety is central to candy production, and driving down changeover time is a continuous-improvement priority.
Training floor leaders in skills such as value-stream mapping and how to execute change is part of the shift, but a central focus is changing people's mindsets. A recovery system that returns excess sugar on conveyor belts for rework was a start, "and how you keep from generating the waste to begin with" then becomes the focus, says Nelson.
Art vs. Science
Change comes slowly in process industries, and understandably so. Why abandon the certainty of what's working for the risk of promised improvement? Gregory Ziegler, a professor of food science at Pennsylvania State University who has demonstrated the efficacy of high-shear mixing as an option to accelerate the conche process for chocolate, notes that traditional methods continue to prevail.
"A lot of people believe in the art of conching, that there are magical things that occur during conching," Ziegler observes. Instead, the effects of a 10-plus hour conch can be accomplished in minutes with high shear mixers, but manufacturers are loathe to divest themselves of the large tanks and equipment needed for the traditional conche. "Understanding chocolate as a composite material is not as romantic," he allows, although "a lot of experimentation is going on in small companies."
On the other hand, the convergence of the health benefits of dark chocolate and the growing popularity of high-end foods, be they craft beer or gourmet chocolate, "has invigorated the industry," he continues. Single-unit machines that mill and conch like Netzsch's ChocoEasy, coupled with the application of material-science discoveries, are ushering in product innovations and better control of product structure.
For example, small variations in moisture content have a big impact on material deformation and flow, particularly with milk chocolate, which requires very tight moisture tolerance. Variable moisture levels in spray-dried milk powder can upset transformation in the fat phase. "If you pre-dry the milk powder, you can control the moisture better," Ziegler says, and manufacturers are adding that quality-assurance step to their process.
A former student's thesis demonstrated that predrying could accelerate the process and result in better rheology, though the impact on flavor "remains a mystery," he adds. The same could be said of many confection-process tweaks, which often rely on trial and error.
Such is the case with pump selection. "Confection is not an ideal product to pump," points out Dave Caldwell, product manager-lobe and centrifugal pumps at Xylem Inc., White Plains, N.Y. "The sugar crystallizes. Chocolate is extremely dirty and tends to crystallize on the seal faces." Gentle pumping with no shear might dictate selection of a flexible impeller pump in some applications, but that still leaves the issue of seal selection. "How the line is set up dictates what will work, and every line is different," he says. "Nothing is set in stone."
To illustrate, Caldwell cites a project with a maker of gummy bears. Regardless of the pump used, seal failures persisted. Crystallization caused mechanical seals to crack, and O-rings couldn't tolerate the pressure. Sanitation protocols, product temperature and other operating parameters had to be considered. After more than two years of trial and error, the solution proved to be a lip seal, coupled with a 316-stainless sleeve that fitted over the shaft and could be swapped out when grooving occurred.
While process changes occur infrequently, packaging is another matter. Just Born intends to adopt the Just Right front-of-pack nutritional labeling program, beginning with per-serving calorie information on Mike and Ike packages later this year. The firm's landfill-free status may be trumpeted on products at a later date.
Changes in package type are more complicated, but candy makers intent on the premium market are adopting high-end looks such as the folding box wrapper for individual pieces of chocolate. Sapal SA, a Écublens, Switzerland-based division of Bosch Packaging Technology Co., recently introduced the Starpac600 HL, a chocolate wrapping machine that can hermetically seal individual pieces with a die-fold appearance using oriented polypropylene, extending shelf life and reducing the cost of packets that use aluminum foil.
According to Matthew Carey, senior sales manager, there are machines with higher throughput rates than the Starpac's 600 pieces per minute, but they can produce only one wrap style. Throughput takes a back seat to flexibility when distinctive packaging is the goal, and the servo-driven Starpac is capable of multiple package types with its dual-star wheel folding sequence. "Changeover time is critical," he adds, and the machine uses a tool-less system.
High-speed machines and automation isn't a priority for every confectioner. Labor-intense processes are part and parcel of operations at many boutique companies that rely on "the mystique and old-timey charm of chocolate, to justify premium prices," as Penn State's Ziegler puts it. Bloomer Candy Co. in Zanesville, Ohio, exemplifies this segment.
Actually, Bloomer began repositioning itself to be part of the old-timey, new age wave of chocolatiers a few years ago, when new ownership came on board. Dark chocolate was added to the product line, and sugar-free candies and all-natural ingredients were formulated to tap into consumer trends. A modern necessity management couldn't ignore was an enterprise resource planning system update to give the firm the quality management, traceability and audit records needed to operate in today's business environment. Last year, Bloomer scrapped its legacy ERP and converted to the Tropos ERP platform.
Dismissing the legacy ERP as "a glorified bookkeeping machine (that) needed to be replaced," Bloomer controller Michael Montgomery indicates the firm lacked track-and-trace ability before the conversion. That shortcoming, along with the need for better HACCP record-keeping and a desire to move to electronic quality tracking, dictated the selection of software designed specifically for food production and distribution.
Besides its own products, Bloomer copacks other manufacturers' candies in a rebagging operation. Visibility to all aspects of receiving, inventory and production was lacking, according to Tom Muth, a senior manager with Epicor Software Corp., the Dublin, Calif., owner of the Tropos solution. The migration, which also involved an electronic data interchange system, took about eight months and gave Bloomer job-costing capabilities.
"Job costing was a huge improvement," says Muth. "That kind of visibility was important to them."
Production isn't supported with a supervisory control and data acquisition system, but staffers now scan codes and access checklists with mobile devices and use touchscreens that are "almost an HMI" for data entry, Muth adds. The staff "has a better understanding of the whole process," says Montgomery. "Tropos has inspired employees to learn all facets of the organization beyond their job-specific duties."
A more involved and knowledgeable staff is an intangible asset that will acquire magnified importance. Ownership is in discussions for a possible sale, raising the importance of engaged workers for business continuity.
Should Bloomer be acquired by another confectioner, the organization will follow a consolidation path tread by thousands of other candy companies. A handful of firms have come to dominate the segment, although approximately 1,500 companies continue to feed America's sweet tooth. If product innovation and segment sales continue to grow, U.S. confectioners should thrive.