Transtasman sweet companies join forces

By Dita De Boni

Q: Which two companies are counting their financial success in smart beans, Grubs and Dudes, buttons, budlets and chips?

A: Christchurch-based chocolate-makers New Zealand Food Group and Australian candy-makers Snow Confectionery, which are consolidating manufacturing and marketing efforts in New Zealand to create this country's third largest confectionery company.

Snow, the largest privately owned sugar confectionery company in Australasia, specialising in toffees and hard-boiled sweets, has sold its New Zealand interests to Food Group for an undisclosed sum. Snow will retain a 15 per cent share in the company.

The sale will boost Food Group's annual turnover to more than $14 million and allow it to market an extended range of confectionery more closely resembling the portfolios of rivals Cadbury and Nestle.

Arch Campbell, executive chairman of Food Group and a sweet-toothed chocolate enthusiast, says the company is vying for the coveted second place in the domestic king-size slab market after Cadbury's, a position it jockeys for alongside Nestle and Whittakers.

Mr Campbell guesses the company's share of the domestic slab market under its Richfields brand ("from the rich fields of New Zealand - its a subliminal thing," he says), is about 7 or 8 per cent, adding that Cadbury has at least 87 per cent of the market.

"We were the first company to successfully take on Nestle and Cadbury despite the prevailing wisdom in 1992 that only multinationals could succeed in that market," he says.

Snow Confectionery CEO Colin Hughes adds that Snow hold a corresponding 7 or 8 per cent of the New Zealand sugar confectionery market behind Nestle's Allens brand and Cadbury's Pascall's.

Both men are, however, far more excited about export potential into Australia and Asia which they believe will account for over 50 per cent of Food Group's projected $35 million annual turnover in the near future.

Australian and Asian markets have the potential for "unlimited growth," says Mr Campbell, because the markets are not so dominated by a few large players like Cadbury's in New Zealand with a firm historical toe-hold on chocolate-lovers.

Food Group moved into Australia in 1996 and employs about seven people who merchandise the company's Richfields slab products as well as a second, price-driven brand.

The company has just received an additional order from Australia for three million Easter eggs, and although he will not reveal the buyer, Mr Campbell says 30-person Food Group will be hiring extra workers, having already started importing equipment "from all over the world" to fill requirements.

Warehousing and invoicing needs in Australia are aided by Snows, which are allowing it to use distribution channels and industry contacts, including piggybacking Food Group into a recently negotiated half million dollar deal to supply Indonesia's largest supermarket chain with sweets and chocolate,