1-800-Flowers.com executive reflects on Ferrero’s acquisition of Fannie May chocolate: ‘we got a proverbial offer we couldn’t refuse’
“We got a proverbial offer we couldn’t refuse,” said Steve Druckman, the president of the Midwest Gourmet Food Group, a division of 1-800-Flowers.
“Ferrero came to us, and they really wanted it. We decided that was the right thing for Fannie May because Ferrero is one of the largest confectioners in the world and it wanted to expand in the US chocolate market in a big way.
“We also felt like Ferrero could do a lot more with Fannie May with their expertise than we did,” he added.
It wasn’t all sadness and tears when 1-800-Flowers parted away from Fannie May.
The e-commerce retailer has since been busy building a new business division, Simply Chocolate, to fill its white space in the chocolate category, and it has “already doubled our expectations,” said Druckman.
Competitors are now friends
Simply Chocolate is different from Fannie May because it’s more of an online platform where shoppers can select from a wide range of chocolate products and put them in gift baskets, whereas Fannie May has a major presence in brick-and-mortar stores, according to Druckman.
“It’s basically a marketplace where we have a mix of national brands, such as Godiva and Ghirardelli, and local premium products… We’re trying to find more boutique chocolatiers in the corner of Maine for example, that can also tell a story and we’ll put these chocolate-related contents on our site,” he said.
Since these small companies don’t traditionally have large shipping and gifting capabilities, 1-800-Flowers can sell them across the US via its own website, Druckman explained.
“In the past, we couldn’t include some of these brands because they were Fannie May’s competitors, but now we have a great platform to work with them,” he said
Druckman noted Simply Chocolate has partnered with 25 chocolate brands including Norman Love Confections and Vosges Chocolate. In addition to being sold along with other brands in gift baskets, they can also sell their products individually through 1-800-Flowers.
“We will receive orders from our customers, and ask these chocolatiers to ship products separately,” he said.
Simply Chocolate has drawn “tremendous traffic” since its inception partly thanks to its established sister brands also operating under 1-800-Flowers, such as Harry & David (a popcorn producer) and Cheryl’s Cookies, noted Druckman.
“We didn’t start off with a huge market investment [to create Simply Chocolate], but we’re doing very well… We had great seasonal sales during Christmas and Mother’s Day, and each of those holidays is bigger than the next one [in terms of dollars sales],” he said.
Branded chocolate in the works
In the next three to five months, Simply Chocolate will be developing its first line of branded products that will eventually include both chocolate bars and shareable items.
Druckman said, “if we are going to have a ‘good, better and best’ strategy, Simply Chocolate will be in that top-end better category.”
“By the end of this calendar year, we will probably sell truffles and boxed chocolate to begin with, and then evolve from there,” he added.