Candy Brands Up For Sales = Sweet Opportunity

Steve’s breakdown: So candy brands Mary Janes, Clark Bars, Mighty Malt Milk Balls, Haviland Thin Mints, Candy Buttons, Slap Stix, and Banana Splits are all for sale. As far we we see, Clark Bar is the big prize here and we suspect whomever takes on these brands will relaunch Clark Bars because they are just F’ing tasty. Stay Tuned.

Oh – and what’s with the featured image? That’s Zipper The Squirrel from Necco’s last ad campaign. Oh Boy . . . he said sarcastically.

WE’RE NOT SURE YET, USA: A week after the abrupt sale and closure of the Necco plant in Revere, Massachusetts, Union Confectionery Machinery is working to sell factory equipment and intellectual property for most of the company’s brands, according to Candy Industry. Necco wafers, Sweethearts and Canada Mints are not for sale.

Candies for sale include Mary Janes, Clark Bars, Mighty Malt Milk Balls, Haviland Thin Mints, Candy Buttons, Slap Stix, and Banana Splits. Anything not sold will be auctioned the week of Sept. 23.

Two of the approximately 240 workers who lost their jobs when the plant shut down filed a lawsuit against Round Hill Investments, which is owned by the storied Metropoulos family and purchased Necco out of bankruptcy, according to MassLive. The employees say because they did not receive advance notice of the plant closure, the whole process violated the federal Worker Adjustment and Retraining Notification Act.

More than a week after the Necco factory was abruptly shut down, apparently because Round Hill had already turned around and sold the candy maker, much of what truly happened is still a mystery. The new owner is still unknown — as are the reasons for such a quick second sale and any plans from the company that now owns the iconic brands.

The 171-year-old company had recently been bought by Round Hill at a bankruptcy action for $17.3 million. The Metropoulos family is known for reinvigorating sluggish brands, and most industry watchers expected the family that resurrected Twinkies and Pabst Blue Ribbon would be able to jumpstart Necco.

But with the news that many of the company’s brands are being liquidated, it’s clear that Necco will never be what it once was. The latest buyer may have kept control of the most well known and beloved brands, but many of the others that are being shuttered have long histories. Taking these brands off the shelf now will upset some consumers who miss them.

While the factory closure has been bad news for Necco fans, it is not hitting the workers as hard as it could have. In the current economy, there is a shortage of factory workers, and other manufacturers have been courting former Necco employees, according to the Boston Globe.

But even though workers may not be feeling the pinch so acutely, they are still out of a job. The workers’ lawsuit, which demands 60 days of back pay, underscores how quickly Round Hill decided to sell Necco. The Metropoulos family has worked with food manufacturing for decades, and should be familiar with the federal Worker Adjustment and Retraining Act. Something with obviously greater financial pitfalls or rewards than the money needed to settle this kind of a lawsuit likely happened to trigger a sale.

A lawsuit filed by Necco’s bankruptcy trustee seems to indicate that Round Hill was unwilling to clean up the factory and make necessary food safety upgrades. As the bidding process for Necco came to a close in May, the Food and Drug Administration issued a warning letter to the factory, pointing out problems like a rodent infestation and unsanitary conditions.

The letter was simply a request to correct the problems; it did not close the factory, order a recall or levy any fines. However, the fix was likely expensive — though the Metropoulos family has a history of investing in factory upgrades when needed. After it acquired Hostess, the family realized its bakeries were in dire need of an overhaul and spent $110 million on renovations.

This news also says something interesting about the recent purchaser of Necco. Because so many brands and equipment lines are being sold off separately, the new owner could be nearly any confectionery company — not just one with the manufacturing capacity to make everything. With just Necco’s signature wafers, Sweethearts and Canada Mints together as a unit, production could easily be moved to an existing factory elsewhere. And it will have to be — Necco sold its Revere, Massachusetts factory in 2017 for $54.6 million. The company, which built that plant in 2003, had an agreement to remain there only through the end of August.

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