A bit of biscotti
A leading baker of premium biscotti and almond thins in North America, Nonni’s Foods LLC, Oak Brook Terrace, Ill., is growing quickly, expanding its baking capabilities and product mix. The 25-year-old Nonni’s brand grew out of true Italian family traditions and small entrepreneurs. Today, the company, which cherishes those family traditions, is able to bring them to a new level, producing assorted biscotti flavors and sizes and new biscotti ‘thins.’ We toured one of Nonni’s four production facilities, which expertly manufactures the flavorful, crispy, original biscotti as well as the new mini biscotti version.
Every one of the biscotti products baked by Nonni’s Foods LLC, Oak Brook Terrace, Ill., brings baking artistry and handmade quality to consumers who want a taste of Old World Italy and the finest ingredients and recipes. The company’s 40-plus stock-keeping units (SKUs) of Italian cookies may not sound like very much to some bakeries and snack companies, but we’re talking biscotti here. And in the world of biscotti, that’s a pretty sizable amount. It’s also the only nationally available line of biscotti in the U.S.
“We’re not like a lot of other companies that have a lot of SKUs,” states Peter Hetrick, executive vice president, sales and marketing. “We’re extremely disciplined about maintaining a number of items and eliminating complexity as best we can. When we introduce a new product or SKU, we evaluate the entire group [within that product category] and determine if all of the items in the group are performing as we expect they should; if not, we take items out of action.”
The company owns four bakeries as the result of various acquisitions. Majority-owned by the Wind Point Partners private equity firm, Nonni’s Foods acquires successful or about-to-be-successful bakeries, which has allowed it to enjoy significant growth over the last eight years, and will help it realize plans for even more expansion.
The Nonni’s Biscotti brand has been around for 25 years and was originally started by two college students. The grandmother (Nonni means grandmother in Italian) of one of the students made homemade biscotti based on her traditional recipe from the little town of Lucca, Italy. All of the students’ friends loved the cookies, so the students thought that maybe they should start a biscotti business, selling the delectable cookies to local coffee shops. One thing led to another, and their tiny biscotti business called Nonni’s was born in San Francisco, where the students went to college.
“They continued to grow the business from that point forward,” recalls David Bere, chairman and CEO. Bere says the students later sold the business to a private equity firm and the rest is biscotti history. “Today they still follow the brand and the bakery business,” he says.
Nonni’s Foods says it’s fully dedicated to quality across its total product line and organization. For that reason and more, it won Snack Food & Wholesale Bakery’s Best New Products of 2012 online voter’s poll, in which we reviewed all of the new products we published in Snack Food & Wholesale Bakery and on www.snackandbakery.com in 2012.
“We’re very pleased that we won the poll,” says Bere. “We’re a relatively small company, but we’re really interested in moving forward, and there’s excitement around that. We have to innovate because innovation is a big part of our success. The drive the people here have is another part of our success.”
All of Nonni’s Foods’ products are made using premium ingredients, including whole almonds and pistachios, real fruits and select chocolates. Sold nationally through grocery, clubstore, mass merchandise and drugstore channels, the line includes the original long-stick Nonni’s Biscotti, based on the original recipe brought from Italy by the grandmother of the company’s founder. Available in clean white cartons printed with the black Nonni’s logo and featuring photo vignettes of the product and color-coded graphic elements, these full-sized biscotti come in eight flavors, including Salted Caramel, Toffee Almond, Decadence, Limone and Turtle Pecan. Specialty flavors such as Chocolate Peppermint Crunch and Gingerbread are available for a limited time during the holidays in cartons displaying deep jewel-toned graphics. “The whole graphic scheme changes for the holidays and is more luxurious,” Bere explains.
As the original products became successful, Nonni’s Foods was able to expand in 2011 and introduced Biscotti Bites. The “bites” are mini versions of the original long-stick biscotti and come in three flavors, packed in convenient standup bags for an on-the-go snack anytime. Another smaller treat is the Mini Biscotti, which is distributed through clubstores in a handy canister that provides plenty of sharing opportunities.
“We had such a great expectation of growth, in fact, that we went well beyond one production facility and grew to have four facilities scattered across North America,” Hetrick says. “So we’re in very good shape.”
After purchasing the THINaddicitives brand of thin premium biscotti almond thins in January 2012, Nonni’s Foods began shipping the line that summer. Established in Canada by V.I.S. Inc., the THINaddictives brand is currently available in the U.S. in Cranberry Almond, Pistachio Almond and Chocolate Almond flavors. The purchase also included the V.I.S. state-of-the-art baking facility in Montreal.
“The THINaddictives brand is a strong strategic fit with Nonni’s, which complements our successful biscotti business and allows us to expand into the fast-growing thin cookie segment, giving us two growth brands within the premium cookie category,” says Bere.
Like the other products in Nonni’s lineup, THINaddictives grew out of true Italian family traditions. Made from a family recipe, the thinly sliced THINaddictives Almond Thins have a light, sweet taste and better-for-you nutrition. To ensure freshness, the slim almond thins are wrapped three to a pack in printed clear film for portion-control, and packed six wraps to a carton. Looking and feeling handmade, the thins are also light on calories—each cookie is has a mere 30 or so calories, yet is satisfying enough to get consumers through a morning. Additional flavors of Banana Dark Chocolate and Blueberry Oat began shipping in May, and more are in the pipeline.
“We’re considered in the high-quality, premium cookie category,” Bere explains. “Nonni’s Foods is a leader in product innovation, and consumer interest and demand for great-tasting, healthier treats and snacks is giving us significant opportunities for growth with THINaddictives.”
Adds Hetrick, “We’re trying to expand biscotti consumption through new flavors, through the new formats, such as the Biscotti Bites and Minis in the clubstores, and through the THINaddictives from Montreal. THINaddictives were only in a few Costco clubstores earlier, so our mission is to grow what is really on-trend, from a consumer perspective.”
Even more expansion
In January, Nonni’s Foods added another piece to its burgeoning business with the purchase of the La Dolce Vita in-store bakery line from Villa Veneto Corp., Glendale, Ariz. The artisan line of biscotti, macaroons, cantucci and other specialty cookies is packaged in transparent clamshells featuring luxurious, ornate label graphics. Two key components of Nonni’s Foods’ value creation plan are to expand distribution and to acquire complementary product lines. According to Bere, La Dolce Vita positions Nonni’s Foods to expand into other areas of the grocery store and into special retail channels.
“We also want to take the La Dolce Vita in-store bakery line up to another level, so there are several strategies right now,” Hetrick says.
Today, Nonni’s Foods has 450 employees and production facilities in Tulsa, Okla.; Montreal; Glendale; and Ferndale, N.Y. Each plant averages about 40,000-plus sq. ft. and is dedicated to certain products: Tulsa and Ferndale (Ferndale is the largest of the four with the most sophisticated equipment) produce the long-stick biscotti products, Biscotti Bites and Mini Biscotti; Glendale produces the La Dolce Vita products; and Montreal produces THINaddictives.
The company’s overall distribution is in retail supermarkets, clubstores and in-store bakeries. “Grocery/retail and clubstores are the predominant part of our business, probably 85% or more,” Hetrick points out. “The La Dolce Vita line is just getting started, because it’s still a new initiative for us. We don’t produce private-label products; we supply only one restaurant customer—let’s say it’s a major coffeehouse chain. But we have so many large opportunities in the world that we’re going to optimize those first and see where we’re at.”
Hetrick says that while there are a number of local and regional biscotti bakers, Nonni’s Foods has no direct national competitors. “We interact with all of the premium cookies you would expect we would on the shelf,” he explains. “But our products are distributed in almost 80% of the country, so we have great opportunities. The products use the best ingredients in the entire cookie aisle—we know everyone probably says that, but if you go to our ingredient decks, they will indicate, for example, real butter, real eggs, real nuts, real gourmet dark chocolate (that we temper) and real caramel—to provide a great, distinctive taste. And the product is generally healthier than many other sweet or decadent treats. So as a result, consumers often say ours is the best 100 calories they’ve ever had.”
The goal now is to get more consumers to think biscotti. “We’re focused on just trying to expand trial and penetration,” Hetrick continues. “We want to get more people into the franchise because they really like our products once they buy into them. The trend of wanting great-tasting, healthy products is big, and we deliver on that.”
Strong flavor loyalty
So what are the top sellers among the array of biscotti flavors? It depends on peoples’ tastes, Hetrick points out. “I think Salted Caramel has been a terrific hit,” he observes. “It combines the sweet and salty and is very popular both in the grocery and clubstore channels. But people are also gravitating to some of our more decadent flavors, though the traditional almond/anise biscotti cookies always perform very well and people know what to expect from them.”
As Nonni’s Foods continues to add more varieties and flavors, has it experienced any cannibalization? “We thought that might happen, but there really isn’t a great deal of interaction among the flavors,” Hetrick says. “People want their Limone or their Salted Caramel or their Cioccolati. They don’t switch to other flavors, which is a really positive thing for the brand.”
People like innovation in different forms and flavors, Bere adds. “It’s a constant expansion, which is what we’re all about here,” he says. “We’re always expanding the product line with innovative new items. Savory flavors could be the next step. You’re going to see some really fun flavors coming out.”
The company is already working on breakfast flavors in the THINaddictives line. “We’re hitting several different points with this product,” Bere says. “We took the biscotti shape, cut it, thinned it and reinvented it. We think THINaddictives is where biscotti is going.”
Clean labels are also very important. “With the THINaddictives idea, it’s simple,” Hetrick continues. “The product contains few ingredients and lists cranberries and almonds. When you open the package, that’s what you see and taste, so it makes complete sense. Consumers expect things of us, so we make sure we deliver what they want. They have high expectations about taste and expectations about ingredients and processing. They believe we have an understanding of how to do things and that we are willing to do things others may not be to meet their requirements. It’d be easier for us to do things at a lower cost or provide lower quality, but we’d never do that.”
At Nonni’s Foods, portion control is also an important factor in its packaging. “We’re very much into the portion-control concept,” Bere affirms. “Biscotti is rather small to begin with, but we’ve added the Minis and Bites for sharing around the home and THINaddicitves three-packs, so they all give everyone more choices. But each one bows to a different eating occasion.”
Eating the original, long-stick biscotti is usually for a different occasion than THINaddictives or the Biscotti Bites, for example. “At 10 a.m., when it’s time to give something to the kids, have something with coffee or when they’re on the go, many people reach for THINaddictives or Biscotti Bites,” Hetrick adds. “When it’s time to relax at the end of the day, enjoy a reward, have dessert after dinner, the original biscotti is nice. That’s why some of these businesses have been incremental, because we’re dealing with very different occasions.”
While it’s a challenge to come up with a healthy low-fat, low-sodium, low-calorie baked snack that tastes good, THINaddictives is receiving a warm welcome here in the U.S. “It’s selling like crazy, even to the point where retailers can’t keep them in stores,” says Hetrick. “It’s not designed to be healthy and tasty, it just is that way, because of what it’s made of and how it’s made.”
Bere says that in the 30-plus years that he’s been in the food business, introducing many products, he’s most excited about THINaddictives, the Biscotti Bites and the clubstore Mini Biscotti. “Consumers and retailers are really interested in all of them, which is helping to bring growth back to the premium cookie market.”
Proactive on quality
Some of the things Bere says that he loves about the company are the dedication, expertise, passion and innovation of the staff. “There’s an ethos throughout the whole company of striving for consistency, quality and improvement, with the product, the packaging, the production, everything,” he says. “It’s a challenge to achieve all of this, but it starts with the people. The people at the plants and at headquarters are all very passionate about what they do. All of our factories have creative, involved people who care. They’re really hands-on. And we’re very fortunate to have an owner that allows us to invest in our operations and in consumer marketing—it’s all about growth and continuous improvement.”
Those working at Nonni’s Foods know that food safety has been extremely important to the company and take it quite seriously, says Hetrick. “We have to be very efficient regarding food safety; we follow strict standards. We’re quite fastidious about it. So with the Food Safety Modernization Act (FSMA) regulations and pending changes, we have no problem dealing with them. The updates haven’t affected us all that much. The biggest reason is, this organization has always been proactive about food safety in its manufacturing processes, operational procedures and the documentation.”
Currently, the Tulsa and Ferndale biscotti plants are certified in the Safe Quality Food (SQF) program at Level 3 and Level 2, respectively, and are audited regularly by Silliker, Hetrick says. Ferndale is presently working toward a Level 3 certification. “We were proactive in initiating those certifications and audits, though they were costly and time-consuming, and there’s a lot required of a company willing to make that commitment,” he explains. “But we did it as soon as we could. The other two, newer plants are on the journey toward SQF certification, and it’s definitely a journey, as it takes about a year to complete, rather than a few months.”
Hetrick points out that Nonni’s Foods took a proactive stance on the FSMA requirements because the company must operate at high standards every step of the way, from a manufacturing perspective. “We also provide beautiful packaging, and strive for top quality from a graphic perspective, even though most folks don’t expect a product that looks this great from what is really a smaller cookie company,” he says.
In fact, high standards are buzzwords running throughout the company’s operations, and that includes finding many ways to reduce its carbon footprint. “Sustainability is important to consumers, customers and us, and it’s just part of our ongoing commitment to improvement,” Bere adds.
Nonni’s Foods continuously strives to improve its environmental friendliness, from optimizing pallet counts and increasing the quantity of product on a pallet load to reducing the thickness of its plastic canisters to using recyclable packaging. Nesting biscotti canisters save on transport and shipping space.
“We just never want to lose our drive to achieve,” he notes. “We talk a lot about what’s next for our products and what the next new product will be. In order to remain the leading biscotti baker in the country, we have to constantly innovate, so shame on us if someone else out-innovates us! We don’t think much about the slumping economy because we can’t control that. What we can control is making sure we have the right price-value relationship and the best quality.”
Everyone still wants a treat
Nonni’s Foods considers what it does as providing consumers with a welcome, affordable luxury, especially in tough economic times,” Hetrick sums up. “We always considered Nonni’s to be an affordable luxury. You can have this cookie with real, high-quality chocolate for $3 to $4 a carton.”
And who knows? “The next time we treat ourselves to a Nonni’s Biscotti, there might be a new line extension of it on the store shelf,” Bere says, smiling. We see several opportunities there and, in years to come, you’ll see THINaddictives as a national brand and the next time you look, there will be more of our products available.”