Wilbur Chocolate Company Business Information, Profile, and History

Company Perspectives:

Our Vision: To be an innovator of unique functional ingredients for the food industry. Our Mission: Wilbur will be the preferred formulator of food ingredients by tailoring fats, flavorings and bulking agents. Our products will enable the food industry to meet the challenges of evolving consumer preferences.

History of Wilbur Chocolate Company

The second-oldest chocolatier in the United States, Wilbur Chocolate Company has been a leader in the manufacture of chocolate and cocoa products for over a century. Best known for its Wilbur Buds, a precursor to the Hershey Kiss, Wilbur supplies a wide range of chocolate items and chocolate coatings to candy makers, bakers, and dairies throughout North America. A wholly-owned subsidiary of Cargill, Inc., one of the largest privately held companies in the United States, Wilbur produces over 150 million pounds of chocolate products and other food ingredients a year. The majority of Wilbur's sales is made through its wholesale business, although it does offer some products through its one retail facility, the Candy Americana Factory Store in Lititz, Pennsylvania, as well as through catalog and phone sales. Wilbur also operates sales of Gerkens Cocoa, selling the Dutch company's cocoa powder, cocoa liquor, and cocoa butter to customers in the United States, Canada, and Mexico.

Sweet Beginnings: 1865-1900

Although Wilbur Chocolate is frequently overshadowed by the other Pennsylvania chocolate manufacturer, Hershey Foods Corporation, Wilbur has carved a solid niche in the chocolate and cocoa manufacturing market and has established its reputation on quality and consistency. Tracing its beginnings to 1865, Wilbur's is the second-oldest chocolate company in the United States, behind Massachusetts-based Baker's Chocolate, now a subsidiary of Kraft Foods, Inc., which got its start in 1765.

Henry Oscar Wilbur had a successful hardware and stove business when he seized an opportunity to enter the confectionery trade with Samuel Croft. They formed Croft & Wilbur in 1865 and set up their business in Philadelphia, Pennsylvania. Initially the two made molasses candies and hard candies that they sold to buyer from the railroad. In short time the business achieved great success as the candies were popular items bought by passengers from train boys.

After nearly two decades, during which the company outgrew its original plant location and expanded its second plant, Croft & Wilbur was split into two companies in 1884. Wilbur became head of H.O. Wilbur & Sons, which specialized in the manufacture of chocolate and cocoa products, and Croft headed Croft & Allen, which maintained production of all other nonchocolate candies. By 1887 continued growth necessitated H.O. Wilbur & Sons to make another move to larger quarters in Philadelphia. When H.O. Wilbur retired that year at 59, two of his sons, William Nelson Wilbur and Harry L. Wilbur, took over the family business. Bertram K. Wilbur, a third son who worked as a doctor in Alaska, joined the business after his brother Harry's death in 1900. Management also extended to French family members Steve and Mass Oriole, brothers of W.N. Wilbur, when they joined the company in the early 1890s, bringing their expertise in European chocolate-making techniques.

A Bud Is Born: 1893-1958

In 1893 Wilbur introduced its most enduring product--the Wilbur Bud--a bite-sized solid milk or dark chocolate molded into a flower bud. The big chocolate morsels and the innovative technique by which they were made came to represent a hallmark of the company. Although Hershey Kisses, introduced 14 years later in 1907, became the ubiquitous chocolate drop, many customers attested to the superior rich quality of the Wilbur Bud. Eric Asimov claimed in the New York Times in 2001, "Kisses have the phantom flavor of insincere greetings, but Buds are as solid and substantial as a hearty handshake."

The company continued to prosper, and in 1905 Lawrence H. Wilbur, a third generation Wilbur, joined the business. In 1909 the company was incorporated as H.O. Wilbur & Sons. In 1913 the company built a new facility in Lititz, Pennsylvania, a small town eight miles north of Lancaster in the center of what became known as the chocolate capital of the United States. Also located in Lititz was the Ideal Cocoa and Chocolate Company.

In 1927 Wilbur entered into negotiations with the Swiss company Suchard Societe Anonyme, and the following year the two companies merged to form Wilbur-Suchard Chocolate Company, Inc. That same year Wilbur-Suchard merged with the neighboring Ideal Chocolate Company. In 1930 Wilbur began the process of relocating its manufacturing operations from Philadelphia to Lititz, and by 1933 production was carried out completely in Lititz. Over a period of time the company sold off Suchard production and sales, and the corporate name became Wilbur Chocolate Company on December 31, 1958.

Changes in Ownership through the Early 1990s

In 1968 Wilbur Chocolate was acquired by MacAndrews & Forbes Group Inc., a New York-based holding company that later sold off its interests in Wilbur in 1986 when sales of the chocolate company were over $100 million. Florida-based AmBrit Inc., the makers of Klondike ice cream bars, purchased Wilbur for $42 million. By 1989 AmBrit and the holding company Clabir Corporation, which had a 58 percent stake in AmBrit, experienced continued financial losses and the two holding companies merged as Empire of Carolina Inc. At that time AmBrit's board of directors strongly rebuffed an offer of $78 million cash and debt assumption by an investor.

In 1992 Empire of Carolina sold Wilbur Chocolate to Cargill Inc. for $42 million and the assumption of $9.1 million in debt. Cargill was the Minneapolis-based food conglomerate that ranked as one of the largest privately held companies in the United States. Among its many holdings Cargill had plants in Europe and Brazil that processed cocoa, as well as cocoa trading and sales operations. Wilbur president William J. Shaughnessy did not foresee the sale greatly affecting operations in the company's two plants in Lititz and Mount Joy, Pennsylvania, nor affecting its 326 employees. Shaughnessy was optimistic when he told Lancaster New Era reporter Doug Wenrich, "Wilbur has been sold many times before and we've now been purchased by a company of unquestionable financial strength and market reputation, with a very high level of integrity." He continued, "This is the first time since 1958, in fact, that Wilbur has been owned by a company with a time line that extends beyond the next interest payment." The year prior to Wilbur's sale to Cargill, revenues totaled $49.1 billion with earnings of $351 million.

Contract Disputes with New Parent in the Mid-1990s

Three years after the sale of Wilbur to Cargill, the union contract represented by the Bakery, Confectionery and Tobacco Workers expired, and workers at Wilbur entered into a protracted labor dispute with the company. In 1995 the main negotiator for Local 464 union, Earl E. Light, remarked that the primary issues concerned health care benefits, forced scheduling, management rights, and wages. He emphasized, however, in the Intelligencer Journal that the real issue was that the small Lititz union was attempting to gain respect from the giant Cargill. Light maintained, "This big company has come in and doesn't care. They want their way."

In September 1995, 11 months after working without a contract, union workers at Wilbur unanimously rejected (175 to 0) a contract put forth by the company. Light continued to assert that it was Cargill that stood as the major obstacle in achieving a contract agreement between workers and the company regarding health care and management issues. Finally in May 1997, nearly three years and over 20 meetings after talks had begun, Wilbur Chocolate and the union employees negotiated a three-year contract that reflected concessions by both workers and the company but that, according to a joint statement reported in the Intelligencer Journal, "gives employees a realistic competitive benefits package."

Smooth Operations in the New Millennium

After what had become a rocky start, operations under Cargill went smoothly at the start of the 21st century. Wilbur Chocolate was, in fact, in a position to acquire companies of its own. In June 2002 Wilbur bought the Canadian company Omnisweet, which manufactured a variety of products for the food ingredient industry, including specialty compound chips and low-melt ice cream flakes. Following the purchase, the Canadian operation was renamed Wilbur Ltd., and production of such value-added products as coatings, inclusions, and colored and flavored products remained in Burlington, Ontario. With this acquisition Wilbur expanded its product base, particularly adding new items to nutritionally-fortified products.

In October 2002, only months after the Omnisweet acquisition, Cargill announced that it had acquired Peter's Chocolate, the California-based unit of Nestlé, and that production of Peter's products would shift from its New York and Wisconsin plants to production at Wilbur's Lancaster County plants. With the addition of Peter's, Wilbur occupied the top-ranking spot as a supplier to confectioners and bakers in the United States. Peter's Chocolate, which gained its name from Daniel Peter, the inventor of milk chocolate, had long been an industry leader noted for its premium chocolates. In a press release, Shaughnessy conveyed his excitement about the merger, stating "This is the most noteworthy acquisition in our 118-year history. We are enthusiastic about bringing together two of the finest and oldest chocolate companies in the United States that share a heritage of loyal employees, customers, and unique products." At the time of the acquisition Wilbur employed approximately 320 employees and expected to increase its work force after production moved to Pennsylvania.

The chocolate industry as a whole received a big boost when the news media published findings about the possible health benefits from moderate amounts of chocolate consumption derived from antioxidants present in chocolate. Already producing sugar-free and nutritionally fortified products, Wilbur was well-positioned to meet customers' demands for healthy chocolate choices. In 2003 Wilbur was the first chocolate-maker in the United States to launch a new line of chocolate coatings that used an innovative combination of artificial sweeteners--erythritol, inulin, and isomalt--to create sugar-free chocolate coatings containing high laxation tolerance, fewer calories, and lower glycemic indexes. Marketed under the brand New Frontiers, these new sugar-free chocolate coatings were fortified with fiber and calcium, were more easily digested than previous sugar-free products, and had the "melt in your mouth" sensation of regular premium chocolates, hitherto never achieved by sugar-free chocolates. Wilbur sold its new confection to the large candymaker Russell Stover, among other customers. As the second-oldest chocolatier in the United States Wilbur kept abreast with new technologies and marketing strategies to maintain its position as a premier supplier of chocolates in North America.

Principal Divisions: Wilbur Ltd.; Peter's Chocolate.

Principal Competitors: Hershey Food Corporation; Baker's Chocolate; Nestlé USA.

Chronology

• Key Dates:
• 1865: Henry Oscar Wilbur and Samuel Croft begin partnership as Croft & Wilbur, a candy business in Philadelphia, Pennsylvania.
• 1884: Croft & Wilbur is separated into two businesses: H.O. Wilbur & Sons, manufacturer of cocoa and chocolate, and Croft & Allen, manufacturer of candy.
• 1887: H.O. Wilbur retires and his sons, William Nelson Wilbur and Harry L. Wilbur, head the company.
• 1893: Wilbur Bud Chocolates are introduced.
• 1900: Kendig Chocolate Company is established in Lititz, Pennsylvania.
• 1902: Kendig Company name is changed to Ideal Cocoa and Chocolate Company after purchase by new owners.
• 1909: Company is incorporated as H.O. Wilbur & Sons.
• 1928: H.O. Wilbur & Sons merges with Swiss company Suchard S.A. to form Wilbur-Suchard Chocolate Company, which in turn merges with Ideal Chocolate Company.
• 1930: Manufacturing operations move from Philadelphia to Lititz, Pennsylvania.
• 1958: Company ceases production and sales of Suchard products and name changes to Wilbur Chocolate Company.
• 1968: Company becomes wholly owned subsidiary of MacAndrews & Forbes Company.
• 1972: Penny Buzzard, wife of former president John Buzzard, opens the Candy Americana Museum in Lititz, Pennsylvania.
• 1992: Wilbur Chocolate is sold to Cargill, Inc.
• 2002: Wilbur acquires Canadian company Omnisweet and Peter's Chocolates from Nestlé USA.