The Secrets of See's Candies

[Guest]

http://management.fortune.cnn.com/2012/08/22/sees-candies-buffett-berkshire/?iid=HP_LN

[Parsad]

I'm not too keen on the company's plan to expand widely relatively quickly.  You diminish the brand a bit that way, especially in a highly competitive and somewhat localized industry. 

 

I remember speaking to Chuck in the past, and he said it was incredibly important to See's to maintain the quality of their chocolates from location to location.  You add days to delivery and that reduces the quality.  You then have to open more and more factories or warehouses, and that adds business risk.  The industry is very fractured from city to city.  There is always a hometown favorite that is dominant, and has significant history and nostalgia behind the brand. 

 

So See's had deliberately chosen to grow slowly, allowing the brand to organically enter other markets as residents in those regions became more and more familiar to the brand by visiting stores just outside their area.  It's why I will drive two hours to Seattle to buy chocolates at Christmas instead of buying boxes at hometown favorites Purdy's or Rogers Chocolates.  You plop one down in Miami and it just isn't going to do that well.  Cheers! 

[motownsf]

I'm not too keen on the company's plan to expand widely relatively quickly.  You diminish the brand a bit that way, especially in a highly competitive and somewhat localized industry. 

 

I remember speaking to Chuck in the past, and he said it was incredibly important to See's to maintain the quality of their chocolates from location to location.  You add days to delivery and that reduces the quality.  You then have to open more and more factories or warehouses, and that adds business risk.  The industry is very fractured from city to city.  There is always a hometown favorite that is dominant, and has significant history and nostalgia behind the brand. 

 

So See's had deliberately chosen to grow slowly, allowing the brand to organically enter other markets as residents in those regions became more and more familiar to the brand by visiting stores just outside their area.  It's why I will drive two hours to Seattle to buy chocolates at Christmas instead of buying boxes at hometown favorites Purdy's or Rogers Chocolates.  You plop one down in Miami and it just isn't going to do that well.  Cheers!

 

Exactly right.  Retail stores have to be very close to manufacturing centers in the chocolate business an inventory turns so quickly and quality/freshness ultimately determines the level of customer satisfaction. This doesn't hold as much truth in the bulk candy business (gummies), but is true with chocolate. Will be interesting to see how many new manufacturing facilities they open.

[redskin]

Kintsler is my guess for the next CEO of Berkshire.  He started at the Berkshire homestate insurers.  Buffett then sent him to Fecheimer and finally on to Buffett's beloved See's Candy.  Kintsler has been embedded in the Berkshire culture for a long time.

[seshnath]

I'm not too keen on the company's plan to expand widely relatively quickly.  You diminish the brand a bit that way, especially in a highly competitive and somewhat localized industry. 

 

I remember speaking to Chuck in the past, and he said it was incredibly important to See's to maintain the quality of their chocolates from location to location.  You add days to delivery and that reduces the quality.  You then have to open more and more factories or warehouses, and that adds business risk.  The industry is very fractured from city to city.  There is always a hometown favorite that is dominant, and has significant history and nostalgia behind the brand. 

 

So See's had deliberately chosen to grow slowly, allowing the brand to organically enter other markets as residents in those regions became more and more familiar to the brand by visiting stores just outside their area.  It's why I will drive two hours to Seattle to buy chocolates at Christmas instead of buying boxes at hometown favorites Purdy's or Rogers Chocolates.  You plop one down in Miami and it just isn't going to do that well.  Cheers!

I am with you, Sanjeev.  Though, I have to admit I was pleasantly surprised to see their store in DC's Dulles Airport this July and glad that I was flying home with something better than bling-blings for my wife.

[RichardGibbons]

I am with you, Sanjeev.  Though, I have to admit I was pleasantly surprised to see their store in DC's Dulles Airport this July and glad that I was flying home with something better than bling-blings for my wife.

 

Yes, I bought some flying out of Dulles Wednesday last week, and others from a west coast (non-airport) store this week.  Our assessment was that ones from Dulles were OK, not up to the usual standards.  We were guessing they were old.  The ones from the west coast were great.  My wife suggested that it wasn't worthwhile buying the Dulles ones again.

 

Interestingly, the good ones cost about $17, while the inferior Dulles ones were $30.

 

[dcollon]

There is a See's stand in an upscale grocery store near my house, so instead of taking wine or some other useless trinket to parties, a few months ago I started arriving with something from See's.  Most people don't recognize it, but they end up loving it.  My favorite recently was chocolate covered peanut brittle.

 

And the best part about the whole thing is that the store always has a 50% off sales table to move whatever is about to hit "expiration".  I bought a one pound box (that usually costs $20 at the store and $17ish at See's online) for $10.

 

 

[fareastwarriors]

I was with a coworker in downtown (Financial District) SF. My coworker wanted to get some chocolate for his wife. We went in there. The cashier was being so rude to this tourist couple. I didn't know what happened before but how the cashier handled the whole situtation was just terrible. She was swearing at them and calling them inappropriate names. The situtation was awkward for my coworker and I, the tourist couple, and the others in the store.

 

I just hope that cashier was an exception and she was just having a really off day...

  :(

[seshnath]

I am with you, Sanjeev.  Though, I have to admit I was pleasantly surprised to see their store in DC's Dulles Airport this July and glad that I was flying home with something better than bling-blings for my wife.

 

Interestingly, the good ones cost about $17, while the inferior Dulles ones were $30.

I thought so - I had only bought before at Omaha and probably, once at a store in west coast.  So I didn't have a good way to compare.

My choice was go back to India with See's (old or not) or without them.  Shipping costs to India are high enough to justify the price, though.