Unique anniversary gift idea

Few companies can boast of a heritage as rich--and delicious--as Ghirardelli Chocolate Co. Established in 1852, the privately-held company celebrates its 150th anniversary this year.

But rather than look to its distinguished past, the company has been vigorously solidifying its future growth. Within the last three years, Ghirardelli has introduced new products, broadened its distribution and outlets, updated its packaging for a wider market and revamped its packaging operations.

Making these changes near the company's anniversary is apropos but also somewhat coincidental. Market conditions were right for a strategic move into mass-market retail distribution, explains Tinka Gordon, vice president of marketing and strategic planning. "We've had good economic times for a while. Consumers are also traveling more, which means they've developed more discerning tastes. And there's been a boom in other premium products, like wine and breads. The chocolate category hasn't exploited this trend yet."

For expansion into mass-market outlets (which began last year), Ghirardelli upgraded from the traditional lay-flat fin-seal bag it was using to a high-end stand-up metallized paper bag made by Amcor. "When we decided to go into the grocery venue, we asked, `What's the best way to show our product in this market?'" Gordon says. "The stand-up bag gives us better shelf visibility and presence because of the full billboard of the front panel. It's also a more premium execution. The flat bag was more of a me-too package--less differentiated, less unique. The stand-up bag tested well with consumers. It was a nice signal that we were moving up."

Refresh `signature' look

These latest improvements follow an earlier product introduction of Filled Squares in January 2000. These thin, delicate and delicious (speaking from personal experience!) squares combine the legendary taste of Ghirardelli chocolate with three popular filling flavors: caramel, mint and double chocolate.

The Filled Squares joined the existing line of solid Squares, named after the historic Ghirardelli Square in San Francisco. The Squares--which are the company's best-selling products--are individually wrapped in metallized polyester film, supplied by Bemis and Printpack, chosen for its aroma barrier and stiffness. The wrap keeps the chocolates from getting scuffed and creates an attractive package for display in candy dishes. It also follows the company's signature foil look.

Working with Hornall Anderson Design Works, Ghirardelli redesigned all its packaging graphics in time for the Filled Squares launch. One criteria of the new design was to maximize the impact of the front display panel of the stand-up bag. Ghirardelli also updated its logo. The logo's new typeface presents a gentler and "approachable" image yet retains the brand's equity and recognition.

Go with the `flow'

When Ghirardelli launched the Filled Squares, it switched from a die-fold style wrap to a flowrap for all its Squares. Not only is the flowrap more efficient in production, it also answers the barrier concern. It keeps other flavors out better and is safer from infestation than the die-fold wrap. An aggressive cold-seal co-adhesive ensures proper seals on the flowrap.

Amazingly, after the switch to the flowrap-style package, the company saw a 75% drop in consumer complaints.

Corporate familiarity

With these packaging changes, Ghirardelli made a major investment in packaging equipment, which included three new ACMA flowrappers and a standup bag filler/sealer made by Thurlings, a European machinery manufacturer.

Ghirardelli's parent company, premium European chocolate maker Lindt & Sprungli, exerts its corporate influence in selecting packaging material and machinery suppliers.

But the corporate familiarity with suppliers is a positive, says Manuel Wildberger, Ghirardelli's vice president of operations. Because Lindt is in the same business of selling premium chocolates, it understands Ghirardelli's needs. It has also learned the value of spending money on quality machines and materials. The advantage for Ghirardelli's packaging operation is that high-quality (and expensive) materials run well on its high-speed packaging lines.

Working with time same suppliers has financial and time-saving benefits for both Lindt and Ghirardelli. For example, the standup bag supplier launched a similar package for a product that's made by Lindt. Because of its earlier experience, Amcor had background knowledge of the company's process, expectations and equipment that helped shorten the learning curve for the Ghirardelli project.

Wildberger also points out that using the same manufacturer's equipment throughout the plant lets him gain efficiencies on spare parts and saves time on operator and mechanic training.

All in all, there are fewer unpleasant surprises this way. "When you develop a relationship with a manufacturer, then you know what you're going to get from them," Wildberger says.

Collective knowledge

Ghirardelli prepared for these significant changes by investing in personnel for its packaging department, says Steve Genzoli, director of research and development and quality assurance, who spends as much as 25% of his time on packaging-related tasks.

"The company relies on vendors for many of its packaging concerns, but the vendor's interest isn't always our interest," Genzoli says. "We made the decision several years ago to make sure we had the in-house expertise we would need. We wanted to be more professional in our packaging."

Jeff Karp, a graduate of Michigan State's School of Packaging, joined the company about a year and a half ago as packaging engineer. A few months later, Lynn Avery was hired as director of procurement and outsourcing. Avery brings valuable insights to the negotiating table from his previous positions in purchasing and sales at the Coca-Cola Co. and Bemis Flexible Packaging.

This diverse skill set serves them well because most packaging decisions at Ghirardelli are made by committee, which lets them tap into different backgrounds and resources--including suppliers--for new ideas and approaches.

Sharing the fun

Ghirardelli's anniversary celebration will continue throughout the year, with specially designed pillow boxes (always a successful gift package) and tins. "Consumers love this," Gordon says. "They do really well for us. Since [our anniversary tin] is commemorative, consumers might want to hold on to it."

And, later this fall, you'll see Ghirardelli Squares hanging on the necks of champagne bottles in a promotional partnership with Korbel.

Other promotions, co-promotions and specialty packages will be developed to answer the desires of the company's growing group of customers. Gordon says, "We've had great acceptance in the retail market. Retailers believe--like we believe--that premium chocolate is a product idea whose time has come. We want to trade consumers up to a better quality product. Retailers see revenue and profit in this."

How Ghirardelli produces a good-looking premium package

* Invest in state-of-the-art equipment

* Buy high-quality packaging materials and perform vigorous quality checks

* Train packaging line operators to notice when a package doesn't look right, find the cause and fix it