Nov 18, 2013
15 to 20, depending on the season
By Becky Hurley
Founded: 1903 by Irish immigrant Patsy Mehaney.
Location: Colorado Springs
Privately owned: By three generations of the Niswonger family since 1956
Employees: 15 to 20, depending on the season
Colorado Spring’s revered candy maker is sweet on the past, a connection that continues to drive growth in the digital age.
Even with the help of a mechanical vat mover, Patsy’s Candies co-owner Si Niswonger and employee Lee Garrison strain to lift a heavy container of melted cheese to pour over fresh popcorn. The next step will be to transfer the batch to an assembly line for cooling and packaging.
Meanwhile co-owner and Niswonger brother Mike shows off one of the candy manufacturer’s vintage machines -- a giant time-worn chocolate melting pot that allows Patsy’s to heat, then “temper” the mix to achieve a shiny finished product.
“A lot of commercial companies use paraffin to get the shine. We’ve never done that. You get a better product if you control the process,” Si says.
Fact is, candy manufacturing with its calibrated heating and cooling, coatings, sorting and packaging steps is still very much a hands-on operation, even in the digital age. Labor costs currently account for almost half of company overhead.
“Some of our oldest pieces of equipment is probably from the 1920s or 1940s,” Mike says, adding that today’s equipment suppliers have tried to buy his aging machines. By doing so, they can break down old cast iron and steel parts so new computerized equipment will need to be purchased. Problem is, the older equipment just keeps working, and is among Patsy’s most reliable.
It’s a good thing because business has grown 20 to 25 percent in the past three years. A retail store up front has generated double-digit sales increases and the company’s field rep got a contract for producing specialty bars for the national parks.
“We’re doing Huckleberry milk chocolate (bars) for Yellowstone and a special hazelnut bar for Grand Teton National Park,” Mike says, noting that the company prints its own labels in-house. In addition to private label orders from other candy companies in Seattle or Denver, one of the company’s largest corporate clients for the past 20-plus years is The Broadmoor hotel. Broadmoor-labeled packaged chocolates, truffles and nuts are sold at the hotel’s retail stores and specialty chocolates have been individually wrapped for turn-down and amenity use.
But even its largest customers see only a small number of Patsy’s extensive product line which includes hundreds of varieties and flavors.
“We do it all – everything but hard candy and gum,” Mike says.
Flavored popcorns, caramels, toffees, nut mixes and brittles comprise about 30 percent of Patsy’s production. The largest portion of its confection inventory is chocolate. Mike estimates suppliers deliver 25 to 30 tons of chocolate powders, beans and liquids each year to the Colorado Springs-based factory – most of which comes from domestic sources.
The Niswongers call their operation “regional” but hope to expand nationally based on growing interest in boutique products. Like a number of other candy makers, they’ve experimented with franchising but found it difficult to maintain brand consistency.
Growth areas include new chocolate varieties, wholesale website customer service additions and increased private label sales. New dark chocolate varieties (incorporating healthy options such as bee pollen, ginger, rosemary) have brought customers from as far away as Brooklyn, NY. Athletes who train in the Pikes Peak region are also biting.
“There’s so much potential out there. We’re not a “mom and pop” and we’re not a huge multinational manufacturer. We’re somewhere in between,” Mike says.
Challenges: Manpower and financing growth. “We’re so busy doing the work of day-to-day candy manufacturing that we don’t have the time to analyze and grow our overall business. We’ve considered teaming with another company or with a group of investors,” Mike Niswonger says.
Opportunities: “There’s so much out there – especially for private label and corporate clients. We’re in two national parks and could expand to all with the proper labor force and equipment.”
Needs: “Human capital and cash to fund smart growth. I’d love to get someone on board who could assess the best way to grow the business and our profitability.”