Although the world has changed significantly over the past few decades, one thing has stayed consistent: our love for candy. While the rudiments of these sweet treats have stayed the same, the processes for manufacturing, distributing and experimenting have undergone a digital transformation. In this episode of Technology Powers X, we explore how:
- Leading candy manufacturers have reinvented themselves by leveraging technology as the enabler to enter new markets, build new lines of business and manufacture our favorite childhood candy
- The Warrell Corporation invested heavily in technology starting in 2000 and leveraged it as a competitive advantage against larger candy manufacturers
- The implementation of reliable storage and backup capabilities have allowed Warrell to focus on tomorrow – with an emphasis on Artificial Intelligence and IoT capabilities
- Jon Prince, President, CandyFavorites.com
- Annette Warrell-Jones, Marketing Manager, Warrell Corporation
- Clif Dorsey, Vice President, Warrell Corporation
- Steve Emanuel, Manufacturing Manager, Warrell Corporation
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Danielle Applestone: This is Camp Hill in Southeastern Pennsylvania. Over that way, just a short horse and buggy ride across the Susquehanna River is Amish country, and one of this town’s great contributions to the world as we know it is candy. Inside that building, thousands of candies are being produced using processes whose names smack of centuries-old handcrafting, fire roasting, hot panning, enrobing. Each week trucks roll out with nut clusters, chocolate-covered pretzels, brittles, toffee, and inevitably, a number of good-for-you snacks. Yet, however much the world changes, the rudiments of the candy itself remains deliciously the same.
Jon Prince: It’s funny because if you think back to 1971, when Willy Wonka and the Chocolate Factory came out, 49 years later, no one has yet to make the everlasting Gobstopper or lickable wallpaper.
Danielle Applestone: Jon Prince is the president of candyfavorites.com, self-described as the Internet’s first online candy store.
Jon Prince: But if you look at the things that are being made now, they’re basically the same products that have been made for generations, just with slight variations and different shapes and perhaps more advanced flavors and sizes.
Danielle Applestone: What has changed is the industry. Intense competition from multinational candy giants has transformed the category. Smaller companies have had to reinvent themselves. This is a story of a company whose products have changed little, yet, over the years they’ve had to pivot, change their business model and ultimately re-imagine themselves in order to thrive. And it’s the story of how embracing technology made all the difference. I’m Danielle Applestone, engineer, entrepreneur, and I’m not ashamed to say, a huge fan of black licorice. You’re listening to Technology Powers X, an original podcast from Dell Technologies. In this episode, technology powers candy. Seriously.
Few products are as warmly wrapped in fond nostalgia as candy. Today, Annette Warrell-Jones is marketing manager for the Warrell Corporation, a job informed by memories of a father who had the best job in town.
Annette Warrell-Jones: I can remember many, many times coming home from school and calling my father on the telephone before he would leave for work and asking him for peanut butter balls. They were my favorite as a kid, I loved anything that had peanut butter in it. Sure enough, he would never disappoint me and he would bring me home a small bag of peanut butter balls. It was a piece of hard candy that had a soft center in it, and I just thought they were the best.
Danielle Applestone: As long as she can remember, candy has been a family business. In 1965, her father, his brother, and his father purchased the Pennsylvania Dutch Candies Company in the small town of Mount Holly Springs.
Annette Warrell-Jones: Well, what made us successful in the beginning was that we found a niche where nobody was. The major candy companies, your Mars, Hershey, Nestle, at that time were not servicing the souvenir shops and the gift shops in the tourist areas, restaurants. That’s the area where Pennsylvania Dutch Candies sold their products. They sold them to the place where the traveling public went, and it was a new distribution. Now today, the major three candy companies sell everywhere, but it wasn’t the case then.
Danielle Applestone: While giant candy companies such as Mars, Nestle, and Hershey dominated big cities, the Warrell Company found creative ways to market their candy, often in cooperation with their so-called rivals.
Annette Warrell-Jones: What we did is we did this concept selling, whereas we would take an array of different types of candy products and put them together in a display and then sell that whole display unit into the retail store. And we would kind of categorize the products into different groups and sell them in as a group. So you weren’t just selling one SKU at a time, you were selling a whole program. And so this concept selling kind of set us apart from other distributors and other candy companies.
Danielle Applestone: That was then. In time though, the big candy makers found their way into those gift shops and tourist areas, with competitions stiffening every year. The global confection market size was estimated at just under $200 billion dollars in 2017, pre-2020 predictions had it reaching $284 billion dollars within five years. The top five global candy companies, led by Mars, control 60% of the world market. It was clear Warrell couldn’t go head to head with the candy giants, so they pivoted. They got out of distribution and became a contract manufacturer. In other words, Warrell began creating candy for others to sell under their own brand label. Today, contract manufacturing represents over 80% of its sales volume. Clif Dorsey is vice president of the Warrell Corporation.
Clif Dorsey: You won’t really find anything Warrell branded out there on any vhelf, but we work closely with a lot of partners through our innovation team and building different brands for folks, so you see all kinds of stuff that’s on the shelves that you’d have no idea came from our factory.
Danielle Applestone: Still, it would take more than strategy to help Warrell thrive. It was time to adopt whole new technologies. John Prince.
Jon Prince: Well, in the 1960s candy was made using production methods, but nothing as sophisticated as now. Ironically, if you think about the production of candy, it’s pretty simple. It breaks down to panning, enrobing, and I guess where snacks are concerned, roasting. In the ’60s, when we would do packaging or any manufacturing, predominantly it was done by hand. There wasn’t production lines like there were now there wasn’t automation, there wasn’t the ability to mine data.
Danielle Applestone: In his 11 years at Warrell, Steve Emanuel has had a front row seat as automation has transformed the company. He began as an hourly packer. Today, he’s manufacturing manager.
Steve Emanuel: We have a confection called a nut cluster, and what that is is just a nut that’s mixed with a binder, such as sugar, salt and a syrup, and then that’s cut into squares. Way back in the day when I started, this was done very manually. It was actually formed in batches and cut and rolled by hand. Over time, we’ve implemented new lines and new processes, and we’ve worked our way from individual batch cooking and into PLC-controlled continuous cooks. We also implemented a confectionery bar line that has everything inline and cuts and processes all in the same step. We actually push over 3,300 pounds an hour, which is more than we would have produced an entire day back when I started.
Danielle Applestone: For Warrell, new technology hit its stride in 2000, when it moved to a 200,000 square-foot facility in Camp Hill, 25 miles away. As its production scaled up, digital technology became a vital link to Warrell’s operations. Clif Dorsey.
Clif Dorsey: It is very important for Warrell in many ways, because of all the different departments. We need a way to hand that data and communication through every level of concept, of sales, commercialization, project management, the whole way out to shipping and receiving. To follow a work order the whole way through, you need solid systems in order to trace that and to track everything the whole way through, inventory control. Without all of that, you can’t grasp what’s being produced on the floor, therefore you can’t invoice, therefore you don’t make money.
Danielle Applestone: As manufacturers everywhere are discovering, IT systems do more than coordinate production and company departments. They’re also vital to planning and marketing. Though candy may be, in many ways, an old-fashioned product, Jon Prince can’t imagine a company such as Warrell thriving without the kind of insights that only big data can provide.
Jon Prince: Oh, it would fail. I mean, Warrell has been one of the great companies because they’ve been pushing boundaries. I mean, they make different products, they make different formulations, but again, they focus on panning and enrobing. I believe they do roasting and things of that nature. But without data, you have no idea to know what demographics want. For example, on the east coast, people tend to favor dark chocolate, on the west coast, they tend to favor milk chocolate. The data that comes from stores can formulate the amounts that you’re going to need, which allows you to minimize loss. Even down to the supermarket, when you go to a supermarket and you see candy at the checkout, it’s not just a random amalgamation. It’s what’s called a planogram and it’s carefully forecasted by traffic and consumer taste patterns and things of that nature. Without data and without technology, you can’t be in business today,
Danielle Applestone: Yet, as so many have learned the hard way in this industry, depending on data means depending on IT infrastructure and safely backing it up against any number of threats. Blanca Garcia is with the data protection division at Dell Technologies.
Blanca Garcia: It means that you’re protecting the data from many different types of dangers, including data corruption, sometimes downtime resulting from loss of hardware or software or natural disasters. We’re seeing this every day more and more, that you see the increasing danger of cyber attacks as well.
Danielle Applestone: At Warrell, who owed much of its success to reliable data, the existing backup system was a growing concern.
Clif Dorsey: The biggest struggle that we had with our backups were they were inconsistent.
Danielle Applestone: For Clif Dorsey that led to many uneasy days.
Clif Dorsey: They were failing. The backup window was taking almost 12 hours to complete, and when it did complete, most of the time they were not successful or valid backups. We’d have to try to rerun them the next morning. Then one of the other largest problems we had is that not all of our data and servers were even in the backup schedule, so we would go through that whole process to collect maybe 25% of our valuable data.
Danielle Applestone: As his concern grew, he decided to see what would happen in a real data recovery situation. The answer wasn’t good.
Clif Dorsey: We’ve had a couple situations that led me to it, but one of the biggest where we did a tabletop exercise to try to recover in the form of a DR event. What could we redo? How long would it take us to recover from that event? We were unsuccessful in many different ways, we just could not get recovered. One of the scenarios that I play is picture a full hockey arena. We have all the players on the ice, we have the coaches, we have everybody in the stands, all the vendors, everything. Picture that is all of our data on all of our servers. Empty that arena and then asked me to put everybody back in based off of our backups. I might be able to put the players on the ice, but that’s not everything. We wouldn’t be able to do anything else and I couldn’t even guarantee that I had the right players on the right teams.
Danielle Applestone: The company’s IT hardware was outdated and unsupported, which, for Clif Dorsey, inspired a number of metaphors.
Clif Dorsey: You feel like you’re on an island. You have nowhere to turn to. You have no backup, you have no safety net, if you will. I was able to get that server recovered and get our database back and everything was fine, but there was a moment that I was like, “We do not have the right pieces in play. We don’t have anything that we need. Enough is enough.”
Danielle Applestone: It was time to make a move. That’s when Warrell adopted a new technology to secure its IT environment, the Dell EMC integrated data protection appliance. Blanca Garcia.
Blanca Garcia: Instead of a customer having to go out and purchase all of the different components, do all of the design, the planning, then the building and configuring, with an integrated appliance, all of the pieces of a data protection solution come integrated in a single appliance, all of the backup and recovery software, all of the hardware that you need. It really simplifies deployment, and then also management. It simplifies management a lot because all of the components are managed from a single interface or a single console.
Danielle Applestone: The switchover was enough to rescue Clif Dorsey from his desert island.
Clif Dorsey: Our backups now are reliable. We’re 100% covered over all of our servers, all of our data. Our offsite storage allows us that full redundancy. Our backups now take on average about two hours. The best part is it’s zero interaction for my team. We’re kind of a small IT shop. Every morning, we get an email that shows what we call our backup report card. I open it up, I see all of our servers. I count. Yep, they’re all there.
Danielle Applestone: With new storage and backup easing his mind about today, his gaze shifted to tomorrow and towards ways of leveraging the data they were gathering.
Clif Dorsey: We hear big data, you hear AI, artificial intelligence. We have a lot of machines in the IoT world, trying to correlate all of that data individually is tough. Using the technology to collect all of that so we can see where it’s better to run certain products on what machines, that chocolate-covered pretzel runs better on that enrober because of a certain type of chocolate and the temper of the chocolate, that type of bag works better on this bagger. We really have the ability to when our R&D department says here’s a new compound that we want to use for a yogurt or here’s a new center that we want to use for a coating, we can go back into the data that we’ve captured and find out, you know what, that’s going to be best run on this subset of kitchens and machines.
Danielle Applestone: Any close look at the candy industry reveals its yin and yang of tradition and technology. One constant is its emotional connection. So often, the flavor of a favorite candy is closely tied to fond memories, which helps affirm the idea that how ever fast candy manufacturing evolves, candy itself has little reason to change. Industry insider, John Prince.
Jon Prince: Well, I read a statistic recently that 65% of American candy bars have been around for more than 60 years. Again, if you go back to this basic principle that candy is made in very simple ways, enrobing, panning, you can’t really create something altogether new, but you can take something that’s been around for a long time and make it slightly better.
Danielle Applestone: For a 21st century candy company, the recipe for success seems to involve just the right balance of familiar tastes and changing technologies.
Jon Prince: The candy business has changed drastically in the past decade. The businesses that have survived, they’ve looked at the market, they’ve looked at the available technologies, they realized that what happened yesterday has no relevance today, it probably will have even less relevance tomorrow, and they realized, I mean, to quote Heraclitus, the Greek philosopher, changes the only constant. As long as businesses are willing to be flexible, they’re willing to not look at technology as a threat but as an opportunity, and as long as they’re able to remain nostalgia but not bound by their nostalgia, they’ll survive.
Danielle Applestone: This is Technology Powers X, an original podcast from Dell Technologies. For more information about data protection solutions from Dell Technologies and the newest integrated appliances, please visit DellTechnologies.com/DataProtection. To learn more about this episode, our speakers, and to read the transcript, visit DellTechnologies.com/Technology PowersX. I’m Danielle Applestone. Thanks for listening.