Fuji Oil And The Future Of A Family Business

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Chicago — The sale of Blommer Chocolate Co. to Fuji Oil Holdings Inc. in late 2018 brought an end to nearly 80 years of family ownership for the company, which through three generations had grown to become the third largest industrial chocolate manufacturer in the world with $1 billion in revenue.

Peter Blommer, CEO and the third-generation of the family to lead the company, sat down with Candy & Snack TODAY to discuss what led to the decision to sell, the synergies this new relationship brings and how the company will continue to give back.

Candy & Snack TODAY: Your family has been in the chocolate business for four generations and you have built a successful business and globally recognized brand name. Why did you decide to sell now?

Peter Blommer
Peter Blommer, Blommer Chocolate Co. CEO

Blommer: You can imagine what a difficult decision that was for our family. For 80 years we have been very passionate about the chocolate business and I am proud of what we have built. I consider our legacy a true family business success story. But what became clear to us is that we operate in a global marketplace, which is consolidating at each step of the supply chain, from bean traders and processors to the large branded chocolate companies. Our challenge was managing the size and pace of global investment. Our expansion to China has been an important and successful step for us and I am excited by the prospects of growth in that market. But I knew our balance sheet as a private company would constrain further strategic moves. In order to speed the pace of our expansion plans, we decided to look for a partner.

Candy & Snack TODAY: What did you see in Fuji Oil that made them the right partner?

Blommer: We felt a responsibility to provide the business what it needs to continue to grow and be successful while balancing the needs of the family and I couldn’t be more pleased with how it all worked out. The combination of Fuji Oil and Blommer was a perfect match. We share very similar values and aspirations. Each of us brings complementary businesses and capabilities with no redundancies. We make each other stronger and better, and together we can capitalize on the exciting global opportunities in our industry.

Candy & Snack TODAY: Can you describe the strategic significance of this purchase for both companies? How does chocolate fit into Fuji Oil’s global business?

Blommer: This is a significant strategic move for both companies as it creates an expanded global footprint to capitalize on growth and serve our customers. This network now includes 16 chocolate and compound processing plants in 10 countries around the Pacific Rim, so we are well-positioned to serve some of the fastest growing markets in the world.

The partnership accelerates global expansion for both companies beyond what either could have achieved organically. For instance, this transaction provides Fuji with critical scale and capability in chocolate manufacturing. What you might not have known is that Fuji entered the compound coating business in Japan in the 1960s, and has grown it organically and through smaller acquisitions over time. However, the acquisition of Blommer increases the chocolate segment from 21 to 41 percent of Fuji’s total business. In fact, chocolate and compound coatings are now the largest business segment within the Fuji Oil group.

Another of Fuji’s goals is to establish a significant presence in North America and this purchase increases their business in this market from 17 to 37 percent of total revenue. And this will continue to increase with the construction of a second oil processing plant in New Orleans opening in early 2020.

Blommer represents 25 percent of Fuji’s revenue and, thus, we will play a critical role in the business going forward. That was important to me. And the Blommer brand name will continue. In fact, we now will be able to provide Blommer branded products and our high level of customer service to many new geographic regions. I am excited by the opportunities this creates for our employees as well.

Candy & Snack TODAY: What synergies do you envision coming from this combination?

Blommer: Blommer and Fuji bring complementary core competencies to the table. Blommer has 80 years of cocoa processing technology and chocolate manufacturing knowledge, while Fuji has nearly 70 years of expertise in oil and fat technology, emulsification, fermentation and soy proteins. Together we have more than 500 research and development scientists and applications technicians operating out of 15 centers around the world. We are eager to combine these technical capabilities to drive new product innovation.

I see great synergies created by bringing a broader product offering to our combined customer base. And, of course, our combined scale will certainly create opportunities. With combined production of over 400,000 metric tons of chocolate and compound coatings, we expect to drive synergies in both operations and procurement.

Candy & Snack TODAY: What opportunities does this create for customers?

Blommer: First and foremost, the combination of Fuji Oil and Blommer will lead to new product innovation and increased global sourcing options for our customers.

Candy & Snack TODAY: How does all of this change how customers will do business with Blommer Chocolate in the future?

Blommer: There is no question this purchase will drive exciting changes and opportunities. As part of a global organization with more than $4 billion in revenue, we increase our ability to support our customers globally; combine our technical resources to help our customers innovate and grow; leverage our scale to ensure a competitive cost structure; and elevate our commitment to sustainability across our supply chain. All of this is good for the industry.

What won’t change is the fundamental way Blommer does business. First, Fuji bought Blommer because they appreciate what we have built, the relationships we have developed and the way we do business. Second, the leadership team at Blommer will not change. I am very excited to continue in my role with the talented team we have built. Lastly, we will retain our family’s core values which inform how we do business. This is in our organizational DNA and is embodied in every employee.

One thing that will be different is that my other family members will not continue with the company. This is an adjustment for many, including me, given the long history of family involvement.

Candy & Snack TODAY: Blommer Chocolate has a long-established commitment to sustainability. How will this be impacted?

Blommer: Both companies are deeply committed to investing in sustainable supply chains and we will continue our involvement in industry efforts in sustainable cocoa and palm oil. Blommer has been committed to cocoa sustainability efforts for decades, as a founding member and current board member of the World Cocoa Foundation; a member of Cocoa Action, a stepped-up sustainability commitment among the leading global cocoa and chocolate companies; and through our own farmer outreach under our Sustainable Origins programs in West Africa and Latin America. Likewise, Fuji’s commitment to palm oil sustainability includes becoming a member of the Roundtable on Sustainable Palm Oil in 2014 and, more recently, the creation of UNIFUJI, a joint venture with United Plantations to sustainably source and process oil in Malaysia.

We now have an even greater opportunity to combine our efforts and share best practices to build on our existing programs and continue to advance sustainability.

Candy & Snack TODAY: Executives at Blommer, including yourself, have taken on leadership roles in our industry for decades. Do you intend to carry on this level of participation?

Blommer: This will not change. Our family has always felt a responsibility to support and help lead our industry and the associations that serve us, including NCA, PMCA, CMAA, RCI and many others and we look forward to continuing to work together with other industry leaders to build and protect the confectionery industry. C&ST