BestSweet

Source: Food and Drink Digital

Date :29/06/2007 16:13:18

Candy manufacturer BestSweet shows you don’t have to be Willy Wonka to make sweets that tickle one’s fancy

Written and produced by James Buchanan & Michael Magno

It ain’t easy being the sweetest sweet maker in town.

However, BestSweet Inc. has found a way to compete with the biggest manufacturers in the world by producing candies that take the adage “A spoonful of sugar will help the medicine go down” to its logical conclusion.

“We’re a confectionary company, and our niche is that we use confectionary as a delivery vehicle for nutritional supplements and OTC [over-the-counter] drug products,” says Steve Berkowitz, VP of new business at BestSweet. “They are OTC drugs such as cough drops, throat drops, antacids, which is a calcium-based product in a soft chew format. These are considered OTC drugs because of the drug labeling that is required.”

The supplements, adds Richard Zulman, CEO of the company, are also commonly referred to as nutraceuticals, which is a blend of the terms “nutrition” and “pharmaceutical.” Nutraceuticals are generally considered to be medically beneficial foods.

“Then we also do traditional confectionary as well,” adds Berkowitz. “We make branded products, which are our own confectionaries, and we do private label and contract manufacturing. Private label products are sold as store brands while contract manufacturing would be where we produce candies for other branded companies.”

Of the store brands they produce, Berkowitz and Zulman say Wal-Mart is among their largest customers, as are Walgreens and CVS. Contractual agreements prevented them from listing their contract manufacturing customers.

“But we make candy for some of the biggest drug companies in the states,” says Berkowitz, “drug companies that have a consumer healthcare division as opposed to prescription drugs.”

Asked about total sales, both said that as a privately held company they don’t publish those numbers, but the question did spark a discussion of the company’s rather rich and varied history.

Both Zulman and Berkowitz are of South African descent, which is where the company was founded in 1932 by Zulman’s grandfather. The company has remained in the family for three generations. In fact, Zulman and Berkowitz are cousins.

Zulman’s father later took over the company, and in the 1960s and 1970s built it up into one of the largest candy companies in South Africa. “Now, unfortunately, Richard’s in the business,” says Berkowitz as the two of them share a laugh.

“We’ve been in the U.S. since 1976,” adds Berkowitz. “It was an opportunity to internationalize, because South Africa is a fairly small country and a fairly small market. If you really want to grow, you really need to internationalize.”

Originally the company was located in New Jersey, but soon the facility the company occupied no longer met its needs.

“We looked at a number of different areas, including New Jersey, back in the mid 1980s, and this area [Mooresville, N.C.] really seemed to be a good solid place to build a business and attract new people to the company in management as well as general employees,” says Berkowitz.

In 1990, the company expanded into the U.K. with the creation of its sister company Ashbury, which primarily manufactures chocolates, toffees and caramels. The company still exists in South Africa, though under different ownership, as Zulman’s family sold the business.

“We are no longer involved with it, but it is still the biggest candy company in South Africa,” says Berkowitz. “When we sold the business in the late 1990s it was at its peak and we had about a 38 percent share of the South African confectionary market; we were ahead of all the other competitors such as Cadbury and Nestle, which were the two biggest competitors. It was a very diversified company, making all types of confectionary, chocolates, and non chocolates of all different kinds.”

So then, why the focus on niche markets in the U.S.?

“It is more specialized and niche focused, because the U.S. is a very big and very competitive market, and it is very difficult to break into the mainstream products against Mars and Hershey, so we look for niches,” says Berkowitz. “And we have certainly found one.”

Zulman adds, “One of our strengths is our technology and manufacturing skill. So, as to not have to compete with low cost imported products, we need to have more value added, as well as products that are difficult to copy or duplicate. So that’s again another area where we focused our business to create a niche for ourselves.”

The technology they employ is also very specialized.

“There are not a lot of companies that can do what we can do,” says Berkowitz. “There are a lot of companies that can make confectionary. But there are not a lot of companies that can do what we do in the nutraceutical and OTC drug arenas.”

Asked why the company’s products are so difficult to reproduce, Zulman says, “It takes significant resources in systems and people. Also it costs a s... [rhymes with hit] load of money. A double s... [rhymes with hit] load of money.”

These investments also pay off in the product development efforts of the company.

“Technology is used to aid our product development, innovative efforts,” says Zulman. “For instance, in the confectionary side of the business, a gray-area is in the sugar free arena. We can buy materials and produce more efficiently sugar free products than probably anywhere in the world.”

According to both Berkowitz and Zulman, the company further distinguishes itself in its understanding of the elements that must go into the nutraceutical and OTC drug manufacture.

“You have to have the quality systems in place, and by quality I don’t just mean what makes it taste nice, but we are talking about a regulated industry and you have to be able to meet the regulatory requirements of the industry, and we do,” says Berkowitz. “We have the systems in place that enable us to meet those requirements and other candy companies don’t have those systems. It has taken us a long time to get them in place; a lot of knowledge is required.”

Harry Overly, VP of innovation and marketing, chimes in at this point, explaining that when looking at what other companies are trying to do; BestSweet is far ahead when it comes to innovation with respect to OTC drugs and nutraceuticals. There may be other companies that are good at producing confectionaries, but they lack the specific knowledge to match that with active ingredients.

“If you look at all the products that are coming out now, that are trying to cross boundaries between confectionary and nutraceutical, such as energy mints and new gums trying to use active ingredients, most only make claims to their benefits,” he says. “We have worked with all of the major drug companies and we understand what it takes to actually make beneficial claims on the packaging of your product as well as how to deliver a stable product. Most people our size have no experience in those arenas.”

Further, when combining innovation, product stability, and meeting regulatory requirements, the company follows guidelines established for current Good Manufacturing Practices (cGMP) and uses USP standards where applicable.

Good Manufacturing Practices are generally used by pharmaceutical, medical device and food manufacturers to help safely produce products. They are regulations that detail the methods, equipment, facilities and controls that equate to the best practices of the related industry.

The use of “current” in the name for these practices is intended to promote the idea that Good Manufacturing Practices are dynamic. They are not a staid set of principles, but an ever evolving set of practices intended to promote the best ideals of manufacturing for the industries that follow them.

USP standards relate to practices set by the U.S. Pharmacopeia, which sets standards for medicines and dietary supplements.

Moving forward the company has a number of ideas to expand its business.

“One area we are placing significant focus on is growing our branded business, and another would be developing new delivery technologies and new products,” says Zulman. “So we are spending a lot of our resources to promote innovation.”

Asked to expand on what he means by delivery technologies, Zulman says, “In other words, how do we deliver an active ingredient? Deliver an antacid in a different format than it is currently done. You can always have an antacid in a tablet, a quick dissolve type tablet, you could eat a piece of chalk, or you could eat one of our nice soft, flavorful chewable products, or you could eat one of our newer products, which is going to be in a confectionary format. So, it is like taking your medicine in a nice candy way.”

The company also wants to expand on its own branded candy business.

“It could be a combination of chewy type candies and chocolates,” says Zulman. “Again, unfortunately it’s not something we can talk openly about until they are brought on to the market.”

Berkowitz also says the company will be looking to acquisitions. He says there are some plans in the works, but other than that he could not comment.

“We are already national and international, so it wouldn’t be a geographical thing,” Berkowitz says. “It would be strategic to get into other different types of products and to just grow our existing business, to find other companies that have synergy with our company.”

Overly adds, “We are looking for synergies that stretch our competencies so that we can learn more as well. From a branded point of view some of it could be slightly geographical in terms of how we expand distribution systems in the U.S. and make them more efficient as well as our distribution strengths in retail as we continue to grow the branded business and put new products out there; to make us bigger on the retail end.

“We have to consider what opportunities are out there and how we grow our brands to make them relevant to the consumers. Then we would be looking for other brands, other companies within our competencies as well as stretching our competencies as we grow the company.”