June 26, 2009 Sweet Taste of Success

Volume 5 | Issue 2

It’s hard to imagine products that evoke heart-warming traditions more than cookies and candies. However, as Michael Sommers learned

Most adults who purchase sweet treats (particularly during tough economic times) tend to reach for comforting candies and cookies whose familiar tastes and associations conjure up their youth. But what about consumers who are still in their youth? The question has always been a key one for Cory, Brazil’s leading manufacturer of candies and chocolate-covered biscuits. After 40 years in the candy business, the company has found that the answer lies in creating high-quality, innovative products that respond to youthful tastes and stay ahead of youth trends.

Cory began life in 1968, in the town of Lins, São Paulo. Although it started out as a bakery, within a year, the owners had transformed the kitchen into a cookie factory. Five years later, the company purchased Balas Apache, a candy manufacturer located in the town of Ribeirão Preto. Shortly after, Cory decided to integrate production by moving all of its operations to the 46,000-square-foot facility in Ribeirão Preto.

STAYING CONSTANTLY FRESH

The candy segment proved to be a promising one for the fledgling company. In 1979, Cory launched the Icekiss, a breath-freshening mint whose presence soon became ubiquitous throughout Brazil. An immediate best seller, the tiny hard candies transformed Cory into a nationally recognized brand. Despite significant investments in packaging design and advertising, Cory recognized that its main long-term challenge was how to make this popular product seem constantly fresh in the minds of consumers.

With this goal in mind, in 1983, the company unleashed what was to be the first of many industry-transforming innovations when it launched a series of Icekisses whose individual wrappers contained fortune-cookie-style love messages. “This was considered a major turning point in Brazil’s candy sector,” recalls Wagner Nascimento, Cory’s commercial and marketing director. “At the time, candies were viewed as commodities. When we first added messages to the packaging, it was very radical because suddenly consuming candies wasn’t just a sensorial experience, but a social experience as well. We were the first to adopt this approach to appeal to young consumers and as a result our sales really took off.”

To keep its youthful customers’ interest consistently piqued, Cory has since introduced numerous series of collectible variations on the original love message theme. Over the years, these have included friendship messages, horoscopes, photos of popular music figures, and adhesives featuring comic book figures drawn by leading cartoonists. “Kids like novelty,” stresses Nascimento. “So we try to come up with a new campaign around every six months.” One of the most popular by far occurred in 2006 when Cory introduced Ice Clicks. A definite sign of the times, the Ice Clicks campaign invited kids from all over Brazil to download photos of themselves and their friends onto an Ice Clicks Web site. Via online vote, kids also selected the final images that were then packaged with the candies. “This was also an industry first: to make candy into a digitally interactive product.” Claims Nascimento. “Without doing any publicity, we received 1,000 photos a day.”

FLAVOR ICON

By this time, Cory was producing a total of 200 million candies every month at its new, state-of-the-art 39,370-square-foot factory, inaugurated in 2002 in the town of Arceburgo, Minas Gerais. Aside from Icekisses, another big seller is Icekiss Drops, rolls of packaged mints aimed at an older teenage market that Cory launched in the mid-‘90s. Echoing its Icekiss strategy, the company has worked hard at consistently updating the line to keep it novel; in this case by innovating in terms of flavor. After tweaking its mouth freshening qualities, in the late 1990s, the company added chocolate fillings, and more recently, it has experimented with popular new flavors such as tart green apple and melon. “Originally, breath freshening mints came in flavors such as peppermint and eucalyptus,” says Nascimento. “But after we did research into how important taste is to young people, we began working with flavors, experimenting with strong fruit flavors when nobody else was. In fact, we were the first to introduce melon. Since then it has become a flavor icon.”

Hard and chewy candies account for the bulk of Cory’s revenues. According to Nascimento, Cory is the market leader in the hard candy segment although it’s difficult to gauge exact market share since so many of its candies are sold on Brazil’s informal market – mostly by street vendors – for which there are no statistics. While 80 percent of its products are sold through wholesalers, the remaining 20 percent are sold via distributors or exported (aside from Mercosul countries, an important client is South Africa, which happens to be the second biggest purchaser of Brazilian candies after the U.S.)

RISE OF CHOCOLATE

Despite Cory’s candy boom, the company hasn’t turned its back on the products that accompanied its humble beginnings as a bakery: cookies. Fittingly, the company’s specialties are chocolate covered biscuits and wafers, which serve as a bridge and common denominator between the cookie and candy segments. “The increasing popularity of chocolate is the biggest trend in the Brazilian industry today,” says Nascimento, pointing out that rising discretionary income among Brazil’s vast working class means that treats whose prices formerly seemed exorbitant are now downright affordable. “Although chocolate consumption in Brazil is still far behind rates in other countries, chocolate is the fastest growing segment right now. To take advantage of this trend, we’re really developing our biscuit lines, all of which are filled or covered with chocolate.”

Cory is ideally poised to take advantage of both chocolate and cookie markets since it is the only manufacturer in Brazil that produces both lines at its own plant in Ribeirão Preto. “Most of our competitors make either cookies or chocolate,” points out Nascimento. “The fact that we make both means that we benefit from our own expertise and ensure the high quality of our products while taking advantage of reduced costs as a result of scale of production.” The company has been making its own chocolate since 1988 when it first began producing Easter eggs. True to form, Cory immediately set itself apart from the pack by being the first in the industry to include small toys inside the hollow chocolate eggs, an attention-grabbing invention that has now become the norm.

In terms of its two largest cookie lines – chocolate fingers and chocolate covered honey cake – Cory is the largest manufacturer in Brazil. While its product range may otherwise seem limited, each individual line features an unusually wide array of choices. “We invest a lot in variety,” confirms Nascimento. “Whereas other manufacturers may only make one or two types of chocolate fingers, we have a half-dozen options such as white chocolate, fudge, pannetone, etc. Ultimately, we’re always looking for ways to consolidate our presence in the marketplace.”

Aside from a commitment to quality and innovation, Cory views its continued market expansion as the result of its careful fostering of relationships with workers, distributors, and consumers. In-house, the company is proud of the Cory Educational Center, an on-site school, inaugurated in 2002, where employees’ children are provided with supervision as well as an early education (currently until the age of 8). In terms of external relations, Cory has spent years forging strong ties with wholesalers around the country. The company also possesses a consumer council that carries out research and encourages consumers to provide feedback. And while its Web sites offer interactive campaigns such as Ice Clicks that allow kids their 15 minutes of fame, it also features recipes that appeal to their parents. “Human relations are of paramount importance to us,” declares Nascimento. “Although our candy-making equipment and facilities are considered to be the most modern in all of Latin America, we don’t just care about machines. We care about people.”

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