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Sunday, January 2, 2011

A sweet finish to the year

A sweet finish to the year

Christmas is a lucrative time for local chocolatiers as they continue to weather the economy's downturn.
Last update: December 23, 2010 - 10:08 PM

The machines were humming this week inside the sprawling factory at Abdallah Candies in Burnsville. A worker gently sprinkled sea salt onto dark chocolate pieces as they moved along a conveyor belt, while two women on a nearby line stamped "B's" into the warm chocolate that enveloped a vanilla-butter-cream filling.
"They're going out the door as fast as we can make them," said CEO and owner Steven Hegedus, the fourth generation to run the company, as he surveyed the 65,000-square- foot plant. "Business is brisk."
Christmas makes up 35 to 40 percent of annual sales at Abdallah, which manufactures chocolate candies and confections for more than 6,000 gift and specialty food stores across the country, as well as Lunds and Byerly's locally. The company specializes in "everyday chocolate," generally priced lower than most handmade artisan brands, but higher than, say, Hershey's.
If America's sweet tooth provides insight into how consumers feel about the economy, chocolatiers such as Hegedus have some hope for the year ahead.
"We put resources into infrastructure so that when the economy picked up, we'd be poised to be at the next level of production," he said. "That's exactly what's happening now. The recession's not over, but it's picking up."
The $17.3 billion U.S. chocolate industry has expanded, but hasn't regained its prerecession pace of growth, according to consumer market research firm, Packaged Facts. Sales have been resilient mainly because the percentage of Americans who buy chocolate -- 3 out of 4 -- has remained steady.
Industry experts attribute that relative vigor to what economists call the "lipstick factor," where sales of small luxury items stay strong during times of economic hardship because of their ability to lift spirits.
Nonetheless, the recession has forced a handful of chocolate makers in the Twin Cities to become more nimble, and to think of their business in new ways.
Brian McElrath and Christine Walthour, a husband-and-wife team who own wholesaler B.T. McElrath, have completed shifted their business model. A couple of years ago, they manufactured mostly filled chocolates. But in 2009 they boosted production of high-quality chocolate bars.

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