Following an auction in a U.S. bankruptcy court, Massachusetts’ New England Confectionery Co. (Necco) has founded a buyer. Ohio-based Spangler Candy Company won the auction with a bid of just under $19 million, The Boston Globe reported.
“We started as a family-owned candy company back in 1847, [and] we’re thrilled to work with a fourth-generation candy company that brings new stewardship to our brands,” Necco Chief Executive Michael McGee told the Globe. “I think our employees will be excited about the outcome.”
McGee — along the company’s executive team — are planning to stay onboard until the end of July. But the team will remain with the company “longer if they need us,” McGee told the Globe.
Spangler was among two other bidders: Round Hill Capital LLC and Gordon Brothers. Another company, kgbdeals Shopping Inc., opted out of the auction before it started. Bidding opened at $15.25 million, and Spangler placed the winning bid at $18.83 million. Necco, which is the U.S.’ oldest candy company, will still be able to make mainstays such as Necco Wafers sweets.
“We’re very pleased that a candy company bought them,” Harry B. Murphy, Necco’s trustee, told the Globe. “They’re going to be running a candy company — [it remains to be seen] where it’s going to be and how it’s going to be, but it’s going to be Necco.”
The candies are made in a suburb of Boston, where the company has a little more than 200 employees. Necco had moved its operations to a large 50-acre site after leaving its longtime plant just outside Boston in 2003. But, if Necco remains in business beyond autumn, it will likely relocate, Murphy said. Even so, Murphy worked to extend the company’s lease from August to the end of November.
Despite the sale, the company’s bankruptcy case is ongoing: Creditors have a mid-July deadline to file claims. According to McGee, the company has debts of over $152 million. But the new buyer isn’t responsible for them.
The news comes as chewing gum companies and confectioners face challenges: Traditional checkout lanes that featured candy are fast being replaced by automated checkouts, and online grocery shopping is coming on the scene.
With online grocery shopping, chewing gum and candy bars are out of sight and out of mind without, say, a checkout aisle. Bubble gum sales, for example, have declined by more than 40 percent over the last decade, and the market for chewing gum in general rests at $3 billion — a decline of more than 8 percent in the same timeframe.
Even so, companies such as Hershey are playing to their strengths. Impulse buying is just one inherent advantage for candy, mints, gum and snacks; there’s also seasonality and multiple pack types for usage occasions. Perimeter and checkout are the two key placements where confectionery companies can still succeed in brick-and-mortar grocery, Hershey CEO Michele Buck told ConfectioneryNews.com in 2017. In addition, Buck sees opportunities in subscription or occasion-based purchase programs online as well as snack offerings.
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