By Dan Sanchez | Mar 06, 2019
Industry: Food & Beverage
Selling candy bars out of a pushcart in San Francisco, Russian immigrant Sam Altshuler started experimenting with various recipes starting in 1918 and came up with the Rocky Road bar. By 1950, Altshuler started a candy manufacturer and named it after his daughter, Annabelle.
Annabelle Candy Company, also known as Annabelle's, is now run by Gogol, Altshuler's grandson, who co-owns the business with his sister, Susan Karl. The company makes candy at the same factory in Hayward, California, Altshuler opened in 1965.
Over the years, Annabelle's acquired other candy manufacturers that have added to Annabelle's catalog, which still includes the original Rocky Road bar, along with Big Hunk, Abba-Zabba, Look!, U-No, and Sour Taffy. "We've managed to stay in business because we have great products that people love, and because we take really good care of our customers," says Gogol.
Considering Annabelle's competes with huge companies such as Hershey and Mars, Gogol feels their success comes from combining a quality product with great customer service. "Competing with larger companies has always been an uphill battle," he says. "We started on the West Coast, and over the years, we gained more national distribution. The problem now isn't so much the competition, but that candy sales are down for a variety of other reasons."
A big one: People are eating healthier and it's hurting candy sales. "We're battling healthier food trends for sure, but another issue is that our candy was popular in the '50s and '60s," he says. "The kids that made our candy popular then are now older, and older people eat less candy."
Gogol is prepared to find new ways to reach a wider audience and has begun by adding new flavors to the line that appeal to new consumers. As an example, the traditional Rocky Road bar is now available in dark chocolate with sea salt. "This can put our candy into the 'high-end' market which is a different category and can go on different shelves," says Gogol. "We also have a new spin-off of our Big Hunk bar and our Sour Taffy is a spin-off of our Abba-Zabba bar."
As trends go, many of Annabelle's products are considered nostalgia candy and have loyal followings and strong brands. That carries over to the manufacturing: Gogol says that much of the success is because the candy is still produced in the same way to maintain the taste and quality people remember. "We have some newer equipment within the packaging area, but for making the candy, we still use much of the original machinery," he notes. "We have mechanics that are very good at keeping it all in good working condition, and since much of it was engineered in-house, the older machines are specifically tailored to making that type of candy and can't be replaced."
The company's employees have been another key to longevity at Annabelle's. "After my grandfather passed away, my mom owned the company and she was not interested in selling it," says Gogol. "We're a union shop, but many of our employees are like family to us. Some have been with the company for more than 30 years."
Challenges: "Our biggest challenge is making customers aware of the product and marketing beyond the older folks who know our brand," says Gogol. "Eating healthy is important, but we also know it's good to treat yourself once in a while and have a balance. Candy makes you feel good, and if we can make younger people aware of the product, we're confident they'll like it. Our biggest strength is that we have solid brands that taste good."
Opportunities: New products and new categories. "We're coming out with higher-end versions of our candy that allows us to be in more categories and additional positions on store shelves," says Gogol. "We're also expanding into more youthful markets with products like our Sour Taffy. Younger people don't know our brands, leaving a great opportunity to expand our products to new generations of customers who we know will enjoy them."
Needs: "We always need to sell more candy, but we're adding to our sales force and have more people placing it in additional areas," says Gogol. "We have very solid distribution with distributors, but we also need to find new customers who are not familiar with our product."