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Chicago keeps hold of 'candy capital' title

By Jess Halliday , 10-Aug-2005

Despite some of the best-known confectionary brands leaving the area, Chicago still deserves its 'candy capital' epithet, according to Food Chicago's Candy Institute.

The number of workers employed in sugar and confectionary manufacturing in Cook County fell from 10,170 in 1995 to 5,378 in 2004, according to the Illinois Department of Employment Security.

But as the department changed its classification system midway through this period, Laura Carnes, manager of the Candy Institute estimates that the true figure for 2004 is closer to 6,000.

Although this still represents quite a drop, Carnes told FoodNavigator-USA.com: "Candy companies are becoming more productive and more efficient, and that might be a factor in the falling workforce."

She also pointed out that each food industry worker in the Chicago area has responsibility for more production than a worker in any other state.

Chicago earned its title in the 1900s, when superior railroad links meant that settlers, who brought their authentic confectionary recipes to the area, had access to relatively low cost raw materials such as corn syrup.

These days, however, sugar prices are the highest in the world, and some have blamed this for turning the tide on Chicago's confectionary fortunes. Local companies pay around 30 cents a pound for their sugar - three times the world sugar price.

But according to Carnes, sugar prices are only big deal for sugar confectioners. A saturated market, it is dominated by large brands who are effecting mergers and acquisitions amongst themselves - such as Wrigley's recent acquisition of certain confectionary interests of Kraft, including the Life Savers and Altoids brands. In this environment, it is difficult for small-scale newcomers to get a look in.

What is more, Bill Graham, workforce development coordinator for the Candy Institute, told FoodNavigator-USA.com that companies are starting to use less sugar in their products, replacing it with high fructose corn syrup or moving into the expanding niche or low-sugar or sugar-free confectionary.

Two of the largest confectionary-makers have left the scene in the past 24 months, but there is no indication that this is the result of sugar prices.

Archibald's, the maker of Fannie Mae and Fanny Farmer chocolates, filed for bankruptcy in January 2004, but Carnes said that a major factor in this was a lack of marketing effort and innovation. In 2000, Archibald's employed 650 workers.

Brach's Confections was purchased by Swiss player Barry Callebaut in September 2003, despite lobbying from the Institute to keep it in the Chicago area. Brach's employed 1500 in 2000.

Between them, these two closures account for around half of the job losses in the past decade.

In June, chewing-gum giant Wrigley announced that next year is phasing out production at its Chicago plant over the next 18 months and ramping up capacity in Yorkville, Illinois.

Again, the sugar high was not implicated in the decision, which was explained by supply chain streamlining. While the Chicago plant is split over multiple buildings and floors, the 11-year-old Yorkville site has a one-story lay out.

Wrigley is not abandoning its Chicago roots altogether, however; its corporate and R&D presence will remain in the city - and 50 new jobs are even being created in this area.

Getting to grips with supply chain issues is as relevant for small companies as it is for the Wrigleys of this world.

"Where large companies have control of distribution networks and raw materials, smaller outfits can remain competitive by forming buying associations between themselves," said Graham - and this holds true for all manufacturing, not just confectionary and food.

They can protect themselves by moving to a more efficient and organized just-in-time model, ensuring that production never stops and orders are locked into consumer demand and tracked by computer.

This means that goods spend less time sitting around in warehouses awaiting shipping, and companies need not shell out for raw materials than they need at any given time.

Graham also flagged competition from overseas manufacturers is a factor impinging on the US confectionary market, as cheaper candies have long shelf life if they are packaged properly. Unless there is a specific, local taste, it doesn't matter where they are produced anymore.

Even so, shipments of confectionary products from metropolitan Chicago accounted for 12.7 percent of that supplied to the United States as a whole in 2001, the most recent year for which figures were available from the US Census Bureau. Despite a dip to 10.3 percent in 1997, Chicago's slice of the pie has grown by an average of 2.5 percent per year.

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