Wednesday, July 16, 2014

Boondoggle or Blockbuster?

Boondoggleor Blockbuster??  That is the question of the day for people thoroughly invested in the world of chocolate.
What has happened is that Lindt & Sprungli has purchased Russell Stover Candies for $1.5 billion.  And just to be clear, Lindt also purchased Ghiradelli chocolates earlier in the year.
The question some are asking is whether a supreme chocolate maker like Lindt can match itself with a very mainstream chocolate like Russell Stover (which by the way, annually receives a very poor review from Consumer Reports).
Some speculate that Lindt wants to increase their exposure in the U.S. by integrating with a company which has a great many outlets.  Others are wondering if Lindt will work to improve the quality of Russell Stover chocolate.  Are you familiar with Whitman's chocolates, because those are also a division of Russell Stover.
Through this acquisition Lindt becomes the 3rd largest chocolate maker in North America, with a 10% share of the market.
Others are commenting about the 2008 acquistion of the Wrigley company by Mars. Did that match actually do anything for either company?   Some insiders also point to the recent 8% increase in prices by Hershey.  After all, commodity prices do go up, which forces chocolate and candy companies to increase their prices as well.
Did you know that there is so much excitement in the world of chocolate?  It's not just a candy bar....it is a $1.5 billion box of chocolates!



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