Small Companies Increase Sales

A small chocolate shop in Jeffersonville, IN is having a great year. They have not had to increase their advertising or marketing of any kind, but they still saw a 10 - 15% increase in sales in the last couple of months. Easter was great for them. The reason is that people know the economy is bad, so they are shopping at local small businesses to keep them going. This is just another article that stresses chocolate is more recession proof than other industries.
http://www.wave3.com/Global/story.asp?S=10164110

Stock Price

I was looking at my blogs for the past week and realized that I have not put the stock price in. I had been checking it, but I forgot to mention it. Today they closed at $6.55 they had a high of $6.75 at one point and then went down. Rocky Mountain's percentage of change in their stock price is doing better than Hershey at this point and the average in the confectionary industry. This company does not have a big share of the chocolate market, but they have a good return of equity for the shareholders. If I was putting money in the stock market I would invest some in RMCF, you may not make millions like investing in "Google". I am adding the address, so you can go to the yahoo finance and look at the comparison of RMCF v. HSY.

http://finance.yahoo.com/q/bc?t=5d&s=RMCF&l=on&z=m&q=l&c=HSY

Is Chocolate Recession Proof?

In the US companies think that chocolate is recession proof, and I believe this is true, but in emerging countries chocolate processing is down. Germany grinds cocoa beans for East Europe and Russia, they are estimated to have a decrease of 20% this year. The difference in this is that chocolate is engrained into our culture, but in Russia they do not spend any of their money on something as frivilous as chocolate when they are fighting to feed their families. We see chocolate as a low cost treat in these tough economic times. This article demonstrates how business strategies must be differentiated in different cultures and how some may have to adapt during recession times and others will have to adapt less.
http://www.guardian.co.uk/business/feedarticle/8441780

Cadbury may Merge with Hershey

I have just finished reading the case on Arcelor-Mittel where the #1 and #2 steel companies merged, and industry analysists thought it was a good idea. Then I came across an article yesterday on Cadbury. They have changed their key strategy to target their core business of chocolate, so they seperated from Dr. Pepper/Snapple as a seperate US entity. When Cadbury focused on chocolate they saw an increase in sales by 7%, and they raised their prices by 10%. This was 7% more than their competitors, and then the recession hit and they have seen a 20% decrease in sales more than their competitors; thus, industry analysists are saying that they are sitting pretty for a takeover from one of the large chocolate manufacturers like Nestle or Mars. They do not want to be taken over, so they may look at merging with Hershey. This is similar to Arcelor-Mittel, but Hershey is only #1 in chocolate in the North America and Cadbury is not second by they are in the top five. Both of these companies have brand name recognition. Sometimes I am not sure industry analysists are correct, because a lot of work goes into making a successful merger like a new business strategy and integration of company culture.
http://community.investopedia.com/news/IA/2009/A-Sweet-Combination-CBY-HSY0406.aspx

Duke Analysis and Chocolate

I just finished looking at the Duke analysis. Retail shows a decrease across the board, but everything I have been reading lately. Chocolate is the one thing that is not in a decline. Chocolate is a comfort food and an inferior good and people have been buying more of it especially at small business stores. The Duke analysis is closer for the high cost and quality premium chocolate. Everyone is looking for ways to cut cost, so they are not going to pay $4.00 for one chocolate covered strawberry.

EASTER TRIVIA

I found myself searching the web today looking for chocolate news, and stumbled across some interesting facts.
EASTER FUN FACTS
• The first chocolate eggs were made in Europe in the early 19th century and remain among the most popular treats associated with Easter.
• 90 million chocolate Easter bunnies are made for Easter each year.
• 16 billion jelly beans are made for Easter.
• Each day, five million marshmallow chicks and bunnies are produced in preparation for Easter.
• 76 percent of people eat the ears on chocolate bunnies first.
• Red jelly beans are kids' favorite.
• According to the Guinness Book of World Records, the largest candy Easter egg ever made was just over 25 feet high and made of chocolate and marshmallow. The egg weighed 8,968 pounds and was supported by an internal steel frame.
• 88 percent of adults carry on the Easter tradition of creating Easter baskets for their kids.
Source: National Confectioners Association
http://www.delawareonline.com/article/20090401/LIFE/904010332

Stock Price

Stock price is on the rise at $6.22 today, RMCF still has increasing stock price over the last months when their competitors are still in the negative.