St. Paul's Pearson Candy Co. has purchased Bit-O-Honey, a classic but faded brand owned for years by confectionery giant Nestlé.
St. Paul's Pearson Candy buys Bit-O-Honey brand
The chewy candy was one of Nestlé's smaller brands, but it's a big deal for St. Paul's Pearson, which is expanding its national footprint.
November 18, 2013 at 9:59PM
The price of the purchase, which closed Wednesday, wasn't disclosed. The deal was announced by Brynwood Partners, a Connecticut private equity firm that bought Pearson in August 2011. Pearson, a century-old candy maker, is best known for its Salted Nut Roll and Nut Goodie candy bars, as well as its mint patties.
Bit-O-Honey is a chewy, honey-almond flavored candy that doesn't have the prominence it once had, but still has a national awareness. Pearson intends to revive the brand.
"We plan to bring renewed focus to the Bit-O-Honey brand by increasing its availability to consumers and by offering customers new and innovative Bit-O-Honey products," Pearson CEO Michael Keller, said in a prepared statement.
The deal may bring 30 new jobs to Pearson's St. Paul operation, which has 110 hourly production workers and 40 office employees. Bit-O-Honey is currently made at a large Nestlé plant in Bloomington, Ill.
"It is our desire to bring the [Bit-O-Honey production] assets and jobs to the St. Paul plant," Keller said in an interview. Pearson is working with St. Paul and state officials for financial incentives to do so, he said.
Bit-O-Honey was created in 1924 by a Chicago candy company and has been owned by Nestlé since 1984. One of Nestle's smaller brands, Bit-O-Honey wasn't a high priority, Keller said. At Pearson, it will be.
"Now, it becomes a very important brand for us," he said.
Bob Boutin, president of suburban Chicago confectionery consulting firm Knechtel, called Bit-O-Honey a "nostalgic brand." It may never have lost favor with generations that grew up with it, he said. Baby boomers will recall Bit-O-Honey as the 1970s sticky candy staple, right up there with Turkish Taffy.
But today, ''the kids don't know it," Boutin said, so growing the brand will be challenging.
Bit-O-Honey started as a candy bar divided into six pieces. But nowadays the bulk of its sales come from bite-size pieces in twist wraps, sold primarily through candy distributors and national dollar-store chains. Keller said that with Pearson's strength in candy bars, it hopes to boost the fortunes of the Bit-O-Honey bar offering.
Pearson aims to run all Bit-O-Honey products through its national distribution chain, which has been growing significantly since the Brynwood deal.
Pearson's mint patties are available in Wal-Mart Stores nationally, while the huge retailer carries Salted Nut Rolls regionally. Mint patties are sold through Walgreens nationally, and the pharmacy chain is looking to do the same with Salted Nut Rolls this summer, Keller said, adding that "we are also exploring opportunities with Target."
The Bit-O-Honey deal marks the fifth brand that Brynwood Partners, which manages over $500 million in private equity, has purchased from Nestlé. Brynwood often buys smaller candy brands like Bit-O-Honey, so-called "carve-outs," from big confectionery players.
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The Seattle-based company bought the 348-acre parcel for $73 million.
