CHICAGO — In the fragmented $22 billion food gifting market, 1-800-Flowers.com, Inc. has several initiatives under way to strengthen its position. Plans include expanding the retail footprint of The Popcorn Factory and Moose Munch Gourmet Popcorn brands with innovation geared toward millennial consumers. The company also is evaluating how to fill the hole recently left by the sale of its Fannie May Confections business to Ferrero International.
“With Fannie May leaving, we need to have chocolate gifting in a real big way, and we’re trying to figure out what’s next for us in that space,” said Steve Druckman, president of the Midwest Gourmet Food Group at 1-800-Flowers.com. “I can’t tell you whether we’re going to buy something or build something or leverage what we already have. It’s such early stage because this happened really quick.”
In March, Ferrero International entered into an agreement to acquire Fannie May Confections from 1-800-Flowers.com for $115 million. The transaction is expected to close in the coming weeks, Mr. Druckman said.
“It will be an interesting time in our lifecycle at 1-800-Flowers because we buy a lot of businesses; we don’t really sell businesses,” he said during an interview with Food Business News at the Sweets & Snacks Expo in Chicago.
The gourmet food and gifting business of Carle Place, N.Y.-based 1-800-Flowers.com generated $670.5 million, or 57% of the company’s revenues of $1.17 billion in 2016. With a portfolio of food brands including Harry & David, Cheryl’s, The Popcorn Factory, Moose Munch, Wolferman’s, Fruit Bouquets and Stockyards, the company’s products range from gourmet popcorn, cookies and confections to premium English muffins to carved fruit arrangements and top quality steaks and chops.
“We have the widest array of perishable gifts out there,” Mr. Druckman said. “We have a lot of stuff you can only find here. We built a set of brands that have a really loyal following and a unique product. We’ll continue to find these brands that have these unique things.”
The Harry & David business, which 1-800-Flowers.com acquired in 2014, has set out to expand its consumer base by repositioning the Moose Munch brand with an eye toward younger consumers. The company recently partnered with Nestle USA to introduce a pair of Moose Munch popcorn mixes featuring Butterfinger and Nestle Buncha Crunch chocolate brands.
“Our traditional wholesale business with Moose Munch has been to department stores like Macy’s, and Bed Bath and Beyond,” said Steve Lightman, president of Harry & David. “We’re going to start producing these smaller individual serve bags and share bags and put them in all convenience stores, 7-Eleven, Circle K, Wal-Mart. Any place where people are shopping already and want to get Moose Munch, we’re going to have it for them there.”
The company plans to market new Moose Munch products at musical festivals, sports stadiums and similar events and venues.
“We think there’s a whole new way to bring this product to market than just traditional wholesale, and we’re really excited about that,” Mr. Lightman said. “We really want to get millennials and Gen Xers engaged in the Harry & David product line…
“Millennials and Gen Xers are less familiar with the company and the products. For us it’s a great opportunity to get it in their hands and try to grow the market. We won’t walk away from our current customers. We’ll keep doing everything we’ve always done. And we’re going to go over here and try to get new customers with a little different look and feel.”
1-800-Flowers.com also is planning a retail push with The Popcorn Factory behind new innovation in packaging, flavors and formats, Mr. Druckman said. Currently available for wholesale are a line of canisters and a line of multi-serve bags of ready-to-eat popcorn with flavors ranging from buffalo ranch to butter toffee with sea salt.
“We’re experimenting with different inclusions, looking at enrobing or panning the popcorn,” Mr. Druckman said. “There are a bunch of different things you’ll probably see from us in the next six months that we’re developing now.
“It’s a fun space. People love popcorn.”
Beyond that, the company will continue to identify opportunities to build its portfolio of brands on-line and in stores, Mr. Druckman said.“Our two biggest brands are Flowers and Harry & David,” he said. “Those are our anchor brands and are real true national brands. Everything in between are smaller, very profitable brands, but they’re very regional brands. They’re fast growing brands but a smaller base. How do we get those to be nationally known? That’s our goal.”