Chocolat Frey yesterday announced that it had acquired a majority stake in SweetWorks for an undisclosed sum. The deal took affect retroactively as of 1 January 2014.
Complementary portfolios
Chocolat Frey spokesperson Christoph Schmassmann told ConfectioneryNews that SweetWorks and Chocolat Frey had similar business models with chocolate and chewing gums and complementary product ranges.
“Take chewing gum for example. SweetWorks is very strong in the sugar-based gumball segment, but rather weakly positioned in the case of sugar-free chewing gum. On the other hand, sugar-free chewing gum is one of Frey's strengths.”
He added that the US was attractive because of high chocolate consumption, a growing premium segment and increased awareness of Swiss Chocolate.
Prior to the deal, Frey was only present in the US and Canada in travel retail and with private label products.
Frey was already producing gum but the company will produce sugar confectionery again for the first time since 1974. However, the bulk of SweetWorks business is in chocolate and gum.
CEO and staff retained
Current owner and CEO Philip Terranova will continue as president of SweetWorks.
Through the deal, Chocolat Frey has acquired a production plant in Buffalo, New York, with around 200 employees. It has also added SweetWorks’ Canadian subsidiary Oak Leaf Confections, which employs 250 people in Toronto.
Schmassmann said that his firm would aim to produce Chocolat Frey products at the newly acquired factories, but with chocolate mass produced in Switzerland.
SweetWorks will operate as an independent business and Chocolat Frey said that production facilities and staff would be retained.
Brands and sales
SweetWorks brands include Niagara Chocolates, Sixlets and Nerds candy and Oak Leaf gum. The company also manufactures and packages chocolate and gum for private label customers, and Frey intends to retain this part of the business.
Chocolat Frey is owned by Swiss retail market leader Migros. The firm posted sales of CHF 387m ($440m) in 2013 and held a 36.8% share of the Swiss chocolate market.