With Easter approaching, dessert and chocolate companies are ramping up for one of the busiest times of year. For startups in the sweets business, hiring the right people and innovation are key components to building a fast-growing firm in an old-fashioned market.
"Its not for the faint of heart," says Mark Edwards, COO of the candy company Edward Marc Brands, when discussing the confectionery industry. "You have to be OK with uncertainty and have pure confidence in the team to get the job done."
The Pittsburgh-based company owns The Milk Shake Factory, Edward Marc Chocolatier, and Snappers. The family-owned business was ranked No. 421 last year on the Inc. 5000 list of fastest-growing companies. In 2015, Edward Marc Brands counted $24.4 million in revenue, and a three-year growth rate of 914 percent.
'Changing attitudes' in an old-fashioned business
While the chocolatier is 102-years-old, Edwards says it has undergone a lot of innovation. But with manufacturing, which adopts a very traditional business model, he adds that changing attitudes isn't the easiest thing to do. Five years ago, for instance, the company decided to refurbish an old chocolate depositor in six weeks for under $30,000--instead of ordering a new one for $300,000, and waiting seven months for it to arrive.
"You have to change attitudes first, that's the most important thing," says Edwards when explaining how he gets his staff to rally behind an innovative new idea. "Get the [employees] in your factories and partners to buy into this thing that is more important than themselves. If they buy into that, you can do anything."
Adapting in a time of transition
But there's another factor shaking up the industry -- falling cocoa prices. Benchmark cocoa futures hit $2,052 per metric ton in early February, the lowest levels since March 2013, according to CNBC.
The falling prices are part of a year-long decline after weather issues and a shrinking demand from health conscious customers. Edwards says prices are the lowest he's ever seen and because of that, the company is now focused on sustainability and giving more money to the farmers who supply products.
Valentine's Day, Easter, and Christmas give the biggest boosts to the high-end and sweet gifts industries, whereas Halloween is the peak holiday for the chocolates people give away in small format. Chocolate sales spike around this time of year, but the demand for cocoa will only see a slight increase while manufacturers gobble up the beans to produce holiday treats, Edwards says.
The different types of chocolates (think gift sets, everyday pieces and snack items) go through various highs and lows throughout the year. Edwards has observed January as the worst month for sales.
Not just for chocolate lovers
Tariq Hanna, the executive pastry chef of the artisan desserts company Sucre, echoed Edwards' call for great employees who "buy into the madness that you want to embark on." He roots on his workers, "We are going to change the world as we know it, if you think I'm kidding, watch me."
Hanna says he didn't just want to open a pastry shop when the company launched in 2007, he wanted to show people how much fun they can have with food. Hanna and his team took the traditional tastes of New Orleans, where the company is based, and reimagined them in different forms. For instance, the menu offers bananas foster macaroons and chicory chocolates.
Sucre, ranked No. 4129 on the Inc. 5000, earned $5.87 million in 2015 and had a three-year growth rate of 68.1 percent. The company has more plans for innovation in the near future. "Innovation now is creating stable products without compromising quality or having to rely on a crazy chemical that I can't pronounce because I want products to sit on shelves for six months," Hanna says.
Hanna and Edwards may be leading change in their businesses, but for Edwards, one thing will stay the same: the company will still produce the same 3.5-foot tall, 30 lb chocolate bunny that its made since 1914 (pictured above).