Swiss chocolate and cocoa products manufacturer Barry Callebaut will acquire the ingredients division of Pennsylvania-based Gertrude Hawk Chocolates, allowing Barry Callebaut to expand its specialties and decorations business in North America.

 

With 370 employees and a state-of-the-art facility in Scranton, Pa., Gertrude Hawk’s ingredients arm has grown into the family-owned company’s largest division. It sold 13,000 tons and brought in $83 million between 2016 and 2017. 

 

Gertrude Hawk has developed innovative technology and processes to make ice cream and baking inclusions, propelling it to become a leader in the ingredients market and create lasting partnerships with customers.

 

“Barry Callebaut has at its fingertips everything needed to continue the growth of the business, including a seasoned, highly respected sales force that calls on virtually every baker and ice cream maker of any size around the world,” Gertrude Hawk Chairman Dave Hawk said in a news release. “Also from a community perspective, this is a dream come true. We have the opportunity to bring a world renowned, state-of-the-art chocolate manufacturer to the Scranton area. How often does that happen?”

 

Upon completion of the sale, Gertrude Hawk will move its branded business across the street into the Casual Sportswear building, which it owns. The 175,000-sq.-ft. facility will house offices, manufacturing, warehousing and logistics. Slightly half of the employees will become employees of Barry Callebaut. The existing plant, along with all equipment related to the ingredients business, will also be part of the transaction. 

 

Dave Hawk, in a company newsletter to employees, indicated that primary use of the sale proceeds will be “to pay for construction and move to the Casual building, and to pay down debt we have accumulated from all the equipment installed” for the Ingredient Business. 

 

“The second largest use of the proceeds will be a very substantial contribution to the Hawk Family Foundation. That money will allow us to greatly increase the amount of philanthropy we do in our community,” he wrote.

 

In a phone interview with Candy Industry, Hawk explained that “This was the perfect time for us.” Noting that he had been approached by Dave Johnson, president of Barry Callebaut Americas, two years ago about the sale of Ingredients Division but had refused at the time, Hawk said he eventually agreed to the sale after Johnson’s persistence and seeing the potential for added growth.

 

“We took the ingredient business as far as we could go,” he said. “We do very little in the baking industry with ingredients, but Barry Callebaut has contacts with all the major players. Also, we process peanuts, which will enable them to offer peanut spreads and peanut confections. This is a great thing for all employees.”

 

As for Gertrude Hawk’s branded business, the chairman indicated there’s plenty of opportunity for growth.

 

“This place has always been a great incubator for ideas, and I see three areas for growth,” he said. “First, there’s the non-sweet/savory coating product segment; second, products that use less chocolate and are formulated with better-for-you ingredients; and third, the manufacturing of products that carry the alphabet soup bylines, that is organic, Free Trade, non-GMO, etc.”

 

He also remarked that the company’s fundraising business was growing. Acknowledging that Gertrude Hawk will also be looking at non-chocolate acquisitions, Dave Hawk promised that “You haven’t heard the last from us.”

 

With the acquisition of Gertrude Hawk Ingredients, Barry Callebaut will further extend its leading role in decoration and inclusion products for food manufacturers, particularly in the North American market. The acquisition will allow Barry Callebaut to expand its portfolio with new technologies for shell moulding, panning, and enrobing, and also with solutions for shaped inclusions and peanut butter chips, a popular product in North America. It will also be the first facility within the Barry Callebaut network of plants that processes peanuts.

 

With Barry Callebaut’s acquisition of D’Orsogna Dolciaria in Europe, this acquisition underlines the company’s strategic efforts to grow in the value-added specialties and decorations business, which serves food manufacturers and gourmet customers seeking differentiation, premiumization and personalization.

 

“Gertrude Hawk Ingredients adds new capabilities, technologies and skilled employees who we are happy to welcome to the Barry Callebaut family,” said Barry Callebaut CEO Antoine de Saint-Affrique. “The acquisition allows us to expand our product portfolio into new markets, and offer an even wider range of products and services than before. Gertrude Hawk Ingredients will play a cornerstone role in our Specialty & Decorations business and we intend to further build on their team and their capabilities.”

 

The transaction is subject to regulatory approval and is expected to close in October 2017.