F Hunziker

Wednesday, 27 January 2010

Kennedy's Confection visited one of Switzerland’s biggest private label companies and interviewed their CEO, Konrad Kaufmann. With private label products dominating more and more shelf space in European supermarkets, the business of contract manufacturing is becoming increasingly lucrative for many small and medium-sized confectionery companies. The success of F. Hunziker, a company employing 130 people based in Dietikon  Zurich, Switzerland, demonstrates that it is possible for a small family-owned business to get into the 5,000 ton league of manufacturers.  In an interview with Hunziker's CEO Konrad Kaufmann, Kaufmann told Kennedy's that he believes private label confectionery has not yet seen the peak of its growth. “Today, the market is being driven by so-called hybrid consumers who can be both luxury- and price-oriented. Consumers no longer see a contradiction between buying both premium products and commodities; they simply choose different goods for different needs.” According to Kaufmann, retailers use in-house brands not only to serve customers with lower priced alternatives, but also to provide unique products, which are not available in other stores or from well known brands. “Ideally, a private label specialist such as Hunziker can help retailers' category managers identify and fill the gaps in their product portfolio.” For sustainable success of a private label, the biggest challenge is to differentiate a product from its branded competition. Unfortunately in the very beginning, private labels did not bring much innovation to the category except their lower pricing position. Today though, many successful own-label products have a unique identity both in terms of packaging and product proposition and few,  as in many cases of Hunziker,  are based around some very innovative product concepts. “We are a full service provider, not just a low-cost candy supplier,” said Kaufmann. “If price is the only differentiator you have, your products may vanish as fast as they came to the market.” Being 60 years in the business and coming from a country where the overall market share of private label is above 50%, Hunziker knows the needs of both retailers and brand houses. Last year the company rolled out 97 new products for its clients, an all time high in the company history. Kaufmann believes that innovation, product diversity and quick reaction time is what sets the company apart from its competitors. Hunziker prides itself being one of the very few contract manufacturers in the industry with a capacity to produce almost everything from toffees to hard-boiled and filled sweets and from gelatine- or gum arabic-based candies to coated or pressed sweets. “Some might think it's crazy to employ a range of marketing and R&D professionals as we are ‘only’ private label manufacturers but we see this as our key competence. Being able to innovate faster than our competitors is what makes all the difference.” Today's private labels need to keep up with latest consumer trends to maintain top-of-mind status. According to Kaufmann, products offering ‘natural’ benefits have been burgeoning in the food business for several years now, and the introduction of new ingredients - such as plant-based sweetener Stevia, is spurring a new round of growth in the candy segment too. “We have been experimenting with Stevia for quite some time and are now ready to launch the first products.” Besides functional and natural ingredients, also cold-hot sensory effects are an issue right now, as well as mixed flavours. “Today's confectionery consumers love variety”, said Kaufmann.  To stay ahead of the competition, Hunziker has invested in technology that allows managing product variety both in the technical and procedural perspective. “We are able to produce chocolate- or xylitol-filled candies as well as multi-coloured and -flavoured products.” In terms of packaging, convenient on-the-go products represent a particularly promising arena for candy manufacturers. Kaufmann also identifies upgraded products, smaller unit sizes and re-sealable pouches as some of the packaging trends in Europe. “Despite economising in many areas, consumers,” says Kaufmann, “aren't willing to trade down on indulgence.” He added that there is a growing demand on healthier products, which do not compromise on taste. That, he said, “is why sugar-free candy varieties in particular are selling better these days.” Export business is up to 39 % of total turnover. “We were one of the first private label candy manufacturers to introduce sugar-free products. In the beginning we entered the category out of conviction, today we only need to look at the market data: sugar-free pastilles, lozenges and hard-boiled candies usually outperform the market growth of sugared varieties.” Hunziker  has a broad portfolio of products including: hard boiled candies, chocolate filled but sugarfree or xylitol-filled sweets, gum arabic pastilles, gelatine products, all natural Stevia sweetened candies, original Swiss herbal candies and throat pastilles, toffees, coated and pressed candies and instant beverages. Hunziker has also gone beyond the simple sugar-free proposition. “Our Candida lozenges demonstrably promote the re-mineralisation of the dental enamel which supports the natural protection of teeth. This effect is patented in many parts of the world.” Besides the oral health platform, the company also specialises in functional sweets such as calcium-enriched toffees or vitaminised gummy bears.  Private label manufacturers are increasingly dependent on technology. For example, the complex management of diversified recipes is supported by a FormWeigh.Net system of Mettler Toledo, the horizontal pouch filling line (with our without zip closure) by Laudenberg technology. Hunziker is certified: ISO 9001:2000, BRC, FPA Safe, IFS, GMP (Swissmedic) . Editor’s footnote The use of Stevia as a sweetener is recognised in Japan and US and is approved in certain products in France and Switzerland although restrictions still apply in Europe.

 

< Prev