Speaking to ConfectioneryNews at Pack Expo in Las Vegas this week, industry veteran and managing director of Bainbridge Associates, Ross Bainbridge, told us about the biggest changes he has noticed in the industry in his four decades in the business.
“The biggest thing is there’s a lot less companies than there were. A number of family-owned businesses merged together or were bought out by other companies," he said.
M&A whirlwind
A storm of merger and acquisition activity over the past 40 years has meant that there are now five core players in the confectionery industry with a clear market lead – Mars, Mondelēz, Hershey, Nestlé and Ferrero.
In the past 12 years alone, Kraft Foods (now Mondelēz) acquired Cadbury, Cadbury itself acquired US-based group Adam from Pfizer in 2002, while Italian firm Perfetti merged with Dutch candy maker Van Melle in 2001. Swedish confectioner Cloetta also recently merged with Dutch firm Leaf - to give just a few examples of recent M&As.
Big players means more automation
“The candy business has become highly automated and that’s because you are dealing with bigger companies now. The smaller businesses couldn’t afford it anyhow [this level of automation], but they are not around anymore,” Bainbridge explained.
He said the automation had meant fewer factory workers and gave the example of a complete gummie line produced by his company which goes from the raw ingredients to the finished bag with only two or three workers.
However, he said it was unlikely that the whole line could eventually run with one person.
“Theoretically you should push a button and it should run all day, but reality doesn’t let you do that – you are going to need people watching the equipment.”
Families to corporations
“The variety of people you can talk to has changed quite a bit between 1970 and today,” said Bainbridge.
“It’s turned into more conglomerates and corporations than family businesses. Of course this means companies have more money and that creates more continuous lines that are more flexible."