Maker of iconic Sweethearts and Clark Bar candies at risk of closing
The maker of Necco wafers, Skybar, Clark Bar, Mary Jane and Mighty Malts may have to cease operations and lay off 395 people if it can't find a buyer for the 171-year-old business by May 6, according to The Shelby Report. It is said to be the oldest multi-line candy manufacturer in the country.
Michael McGee, CEO of the New England Confectionery Company (NECCO), recently wrote to state officials and those with the city of Revere, Massachusetts, where the factory is located. He told them while talks with potential buyers are ongoing, there's no guarantee of a sale and it's possible not all of the current workers will be kept on even if there is one, The Shelby Report said.
Last year, NECCO sold its 810,000-square-foot plant and 55-acre grounds in Revere to Atlantic Management Corp. and VMD Companies for $54.6 million, according to the Revere Journal. The lease is up in August. The company moved to Revere in 2003 after 76 years in Cambridge, Massachusetts.
During its long history, NECCO has relocated more than once, replaced outdated machinery, updated products and acquired or merged with other firms. However, this announcement sounds like it might have been a surprise after the company moved into the state-of-the art plant in Revere in 2003 and reportedly received some significant tax breaks.
It's not clear why the privately held NECCO is in this situation, but the property was rezoned last year and could be developed with high-tech industries including robotics, biotech and advanced manufacturing, Revere Mayor Brian Arrigo said in Boston Magazine.
While NECCO's brands may not have the popularity of similar products produced by Hershey or Mars, they have long been found in niche candy stores or special sections within retailers such as Wegmans where they are popular with consumers who grew up with them or younger individuals who like to try new things.
It's possible the company's longtime brands — Necco Wafers, Skybar, Clark Bar, Mary Jane, Sweethearts and Mighty Malts — could be picked up by another confectionery firm that might want to add a piece of U.S. candy history to its portfolio. However, it's unlikely that big candy makers who are diversifying their portfolio to include more snacks and fast-growing products to boost revenue would be interested.
Nestle took several months to sell its U.S. chocolate business to Italy-based Ferrero, which saw the chance to expand its presence in America. It's possible Ferrero or a smaller confectionary company such as Leaf Brands will take a chance on NECCO. Leaf successfully relaunched its Wacky Wafers and brought back the discontinued Hydrox cookies and Astro Pops, so it knows how to save slumping and discontinued brands from the brink, or even past it.
NECCO has recently modernized messages on its Sweethearts pastel candy hearts and launched special celebrations on Valentine's Day. It also invested in a 2014 multimedia outreach campaign called "Are You Clark Enough?" to attract millennial consumers to its Clark Bar. The effort took the product from 700 retail outlets to more than 3,000, according to Hill Holliday, a Boston ad agency. Still, it's evident that these efforts have not been enough.
CEO Michael McGee, who joined NECCO in September 2014, has management experience with CPG brands at both Mars and Kraft. He was previously a vice president of marketing for Mars Chocolate. According to NECCO, he "has a consistent track record of reinvigorating brands." That background will no doubt come in handy now, but he has little time left in which to act.
- The Shelby Report NECCO Faces Layoffs, Closing If No Buyer Is Found