Blommer talks sustainability, looks to grow - chicagotribune.com
Blommer Chocolate Co. invited media inside its building for the first time in more than 70 years Wednesday, unveiling a $45 million cocoa sustainability initiative and hinting at capacity constraints at its Fulton River District facility.
"We thought it was time to open our doors and begin a conversation," Peter Blommer, the company's president, said to a group of journalists and confectionary industry professionals in town for the Sweets & Snacks Expo.
Since its start in 1939, the company has become nearly as well-known for its secrecy as for the intoxicating chocolate smell that wafts across River North toward Lake Michigan. And although the meeting included a tour of the facility, no photography was permitted.
Rick Blommer, co-owner and vice president of operations, said he "was sorely disappointed" on his first tour of the facility as a child because he'd seen "Willy Wonka & the Chocolate Factory."
"There are no Everlasting Gobstoppers, and there's no chocolate river," he said.
The facility does, however, make a variety of chocolate products from the beans, including cocoa butter, cocoa nibs, baking chocolate, chocolate coatings, cocoa powder, chocolate chips and 10-pound chocolate bars.
The company processes 45 to 50 percent of North America's cocoa, making it the largest on the continent by a factor of about three, executives said. The company does 95 percent of its business in North America but is looking at opportunities for overseas expansion.
Because chocolate is made from commodities with volatile prices, annual revenues swing between $1 billion and $5 billion, as ingredient costs passed on to customers can force prices, and therefore total sales revenue, higher.
Sales by volume have increased 10 percent each year since 1990, Peter Blommer said, noting the performance is well ahead of what he described as a 2 to 3 percent industry average. He declined to name his biggest clients but said the best-known chocolate, baking and dairy companies "probably fall on that list."
Growing pains
Blommer employs 750 at its four North American facilities, including 230 employees in Chicago. Until recently, the Chicago facility had been its most productive, manufacturing 240 million pounds of chocolate and related products every year. But Blommer's facility in East Greenville, Pa., recently eclipsed Chicago, in part because of capacity issues here.
The matter has forced the local staff to "eat a lot of Philly cheesesteaks," as a stand-in for humble pie, Rick Blommer quipped.
In recent years, the Chicago plant's once-industrial neighborhood has become awash in residential development. But Rick Blommer said that has not led the company to consider moving. In fact, the company is hoping to expand here.
"We want to stay in Chicago forever," he said, adding that executives have been looking to build out in the area and add capacity and employees. The company has been waiting for a while.
In 2006, the City Council approved a redevelopment agreement for $37 million of improvements to the Blommer facility. That included about $6.5 million in tax increment financing.
Blommer currently operates on 1.3 acres, at West Kinzie and North Desplaines streets; the redevelopment agreement would expand that area to a 5.5-acre campus.
A city spokesman said the expansion includes three parcels of land, one of which has already been acquired.
Blommer executives said only that the company is "in the legal process" of acquiring a parking lot east of the building and a vacant lot nearby.
An attorney for the owners of the parking lot declined to comment.
According to the redevelopment agreement, "the existing site is presently characterized by obsolete land-use and building layout. During Developer's peak season, there is often truck traffic volume and congestion around the Existing Site, as semi-trailers are waiting to be loaded, unloaded or weighed."
Sustainable origins
Peter Blommer said the company's sustainability efforts began in the 1950s when founder Henry Blommer began what is now the World Cocoa Foundation. The company is in the process of ensuring all of its palm oil will be certified sustainable by 2015.
Blommer defines "sustainable" as a business in which all parties benefit.
So far, the company has spent $13 million on sustainability efforts, such as educating cocoa farmers in Indonesia, Ecuador and the Ivory Coast about improving crop yields. The company uses social contracts relating to appropriate work hours and activities for children.
The company on Wednesday unveiled "Sustainable Origins," a brand that will be used to market its sustainable chocolate to customers, and communicate its efforts more effectively to the public. As part of the effort, Blommer will invest $45 million toward education and other efforts by 2020.
The company estimated that about 7 percent of the world cocoa crop is certified sustainable today. About 10 percent of Blommer's production is certified sustainable.
While the company expects demand for sustainable chocolate products to grow, it's difficult to gauge how much. "It will be determined by our customers," Peter Blommer said.
"We thought it was time to open our doors and begin a conversation," Peter Blommer, the company's president, said to a group of journalists and confectionary industry professionals in town for the Sweets & Snacks Expo.
Since its start in 1939, the company has become nearly as well-known for its secrecy as for the intoxicating chocolate smell that wafts across River North toward Lake Michigan. And although the meeting included a tour of the facility, no photography was permitted.
Rick Blommer, co-owner and vice president of operations, said he "was sorely disappointed" on his first tour of the facility as a child because he'd seen "Willy Wonka & the Chocolate Factory."
"There are no Everlasting Gobstoppers, and there's no chocolate river," he said.
The facility does, however, make a variety of chocolate products from the beans, including cocoa butter, cocoa nibs, baking chocolate, chocolate coatings, cocoa powder, chocolate chips and 10-pound chocolate bars.
The company processes 45 to 50 percent of North America's cocoa, making it the largest on the continent by a factor of about three, executives said. The company does 95 percent of its business in North America but is looking at opportunities for overseas expansion.
Because chocolate is made from commodities with volatile prices, annual revenues swing between $1 billion and $5 billion, as ingredient costs passed on to customers can force prices, and therefore total sales revenue, higher.
Sales by volume have increased 10 percent each year since 1990, Peter Blommer said, noting the performance is well ahead of what he described as a 2 to 3 percent industry average. He declined to name his biggest clients but said the best-known chocolate, baking and dairy companies "probably fall on that list."
Growing pains
Blommer employs 750 at its four North American facilities, including 230 employees in Chicago. Until recently, the Chicago facility had been its most productive, manufacturing 240 million pounds of chocolate and related products every year. But Blommer's facility in East Greenville, Pa., recently eclipsed Chicago, in part because of capacity issues here.
The matter has forced the local staff to "eat a lot of Philly cheesesteaks," as a stand-in for humble pie, Rick Blommer quipped.
In recent years, the Chicago plant's once-industrial neighborhood has become awash in residential development. But Rick Blommer said that has not led the company to consider moving. In fact, the company is hoping to expand here.
"We want to stay in Chicago forever," he said, adding that executives have been looking to build out in the area and add capacity and employees. The company has been waiting for a while.
In 2006, the City Council approved a redevelopment agreement for $37 million of improvements to the Blommer facility. That included about $6.5 million in tax increment financing.
Blommer currently operates on 1.3 acres, at West Kinzie and North Desplaines streets; the redevelopment agreement would expand that area to a 5.5-acre campus.
A city spokesman said the expansion includes three parcels of land, one of which has already been acquired.
Blommer executives said only that the company is "in the legal process" of acquiring a parking lot east of the building and a vacant lot nearby.
An attorney for the owners of the parking lot declined to comment.
According to the redevelopment agreement, "the existing site is presently characterized by obsolete land-use and building layout. During Developer's peak season, there is often truck traffic volume and congestion around the Existing Site, as semi-trailers are waiting to be loaded, unloaded or weighed."
Sustainable origins
Peter Blommer said the company's sustainability efforts began in the 1950s when founder Henry Blommer began what is now the World Cocoa Foundation. The company is in the process of ensuring all of its palm oil will be certified sustainable by 2015.
Blommer defines "sustainable" as a business in which all parties benefit.
So far, the company has spent $13 million on sustainability efforts, such as educating cocoa farmers in Indonesia, Ecuador and the Ivory Coast about improving crop yields. The company uses social contracts relating to appropriate work hours and activities for children.
The company on Wednesday unveiled "Sustainable Origins," a brand that will be used to market its sustainable chocolate to customers, and communicate its efforts more effectively to the public. As part of the effort, Blommer will invest $45 million toward education and other efforts by 2020.
The company estimated that about 7 percent of the world cocoa crop is certified sustainable today. About 10 percent of Blommer's production is certified sustainable.
While the company expects demand for sustainable chocolate products to grow, it's difficult to gauge how much. "It will be determined by our customers," Peter Blommer said.
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