Barry Callebaut recently announced that it would acquire the Pennsylvania-based chocolate company’s ingredients business for an undisclosed amount. The transaction is subject to regulatory approval and is expected to close in October 2017.
The acquisition will also allow Barry Callebaut to expand its portfolio with new technologies for shell molding, panning, and enrobing, as well as shaped inclusions and peanut butter chips, the company said.
Antoine de Saint-Affrique, CEO of Barry Callebaut, said, “We continue to consistently execute our ‘smart growth’ strategy by growing our value-added specialty and decorations business… Gertrude Hawk Ingredients will play a cornerstone role in our specialty and decorations business and we intend to further build on their team and their capabilities.”
In a similar move, Barry Callebaut also recently acquired D’Orsogna Dolciaria in Europe to serve both food manufacturers and gourmet customers seeking differentiation, premiumization and personalization.
The struggle of ever-growing business
Gertrude Hawk Ingredients, currently employs 370 people, is the largest division of the company, and many of its ingredients and contract manufacturing products can be found in US brands and stores across the country, according to a release.
However, chairman of Gertrude Hawk Chocolates, Dave Hawk, was concerned that his expanding ingredients sector has begun to dwarf the heritage brand.
“That little auxiliary business we started in 1994 has grown to the point that it consumes an ever-growing percentage of our time and attention,” Hawk wrote to his employees in a letter. “While I am certainly happy, and proud, of the work we do in ingredients, there is no question that it has distracted us from our heritage.”
Hawk further mentioned that Gertrude Hawk Chocolates has been a customer of Barry Callebaut for many years, and Barry Callebaut had previously hired people away from the company on occasion.
Dave Johnson, president of Barry Callebaut, first approached Hawk two years ago to see if he was interested in selling his ingredients business. Hawk, however, rejected.
“But they kept coming back, and back again. Finally, in January of this year (2017), I agreed to explore their intentions,” Hawk said.
What will happen to Gertrude Hawk Chocolates?
Gertrude Hawk Chocolates will remain an independent business upon the acquisition, but it will move all the equipment used to manufacture the brand and Frango (a line of mint chocolates) into the Casual Sportswear building in Dunmore, Pennsylvania, Hawk said.
“We’ll sell what is the current manufacturing building, and all the equipment associated with making inclusions, contact pack, and large wholesale to Barry Callebaut,” he added.
“The number one use of the proceeds of this sale will be to pay for the construction and move to the Casual building, and to pay down debt we have accumulated from all the equipment installed as we rode the incredible wave of growth of the ingredients business.”
“A little less than half the workforce will become employees of Barry Callebaut, and the rest will remain with Gertrude Hawk Chocolates,” Hawk said.
Gertrude Hawk Ingredients reported a total sales volume of around 13,000 tons during the 2016-2017 period, with sales revenues of approximately $83m.