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Hilo Gold
Big Island Candies says 'aloha'
to double-digit growth...
by Wendy Kimbrell
CANDY
INDUSTRY May 2000
If you build it,
they will come. And if you provide a high-quality product supported by a
savvy marketing approach, they'll keep coming back. And so will their
friends.
Those straightforward business practices
are the foundation of Big Island Candies' success, and comprise the basic
strategy for the Hawaii-based company's plans for growth, gradual but
sure.
Big Island Candies, based on the Big
Island of Hawaii in the city of Hilo (pronounced 'hee-low'), merchandises
its near 80-item line of gourmet chocolate and baked confections primarily
from one 4,000-square-foot retail outlet. And although the establishment
is located in one of the most remote locations in the country, Big
Island's Hilo shop rings in annual retail sales of nearly $8 million.
That's a staggering dollar figure for
just one retail outlet, but it's easy to comprehend how quickly the
revenues stack up as one observes the seemingly endless stream of visitors
pouring through the store as they alight from bus after crowded bus. Local
patrons and tourists alike regularly cram the strategically planned
aisles, while they eagerly carry armloads of product to the ever-ringing
registers. "There are many
Hawaii residents who fly in from one of the other islands, take a taxi
here, buy product for themselves and gifts for their friends and family,
then go back to the airport and fly back home," says Allan Ikawa, Big
Island president and owner. The
company's burgeoning catalog and internet sales don't prevent Big Island
fans from making the journey personally.
Keeping
it simple
Ikawa, a 50-something entrepreneur who
founded Big Island in 1977, has seen the company's sales more than double
during just the last five years. And although Big Island could easily
quadruple sales overnight by selling to distributors or directly to
wholesalers, Ikawa is committed to keeping business at Big Island simple
and independent.
"I've been approached by the major
discounters who want to buy trailer loads of our product, but I've turned
them down," Ikawa says. "I'm a simple man, and I'm not motivated
by short-term monetary gain. If you care only for money, you're not going
to be successful in the long-run."
Nevertheless, Ikawa is preparing for
steady growth, to the tune of annual double-digit revenue increases.
"Since we moved to this location two years ago, I have acquired three
surrounding properties, in preparation for future expansion." Before
the company begins tearing down walls in its production faciloity,
however, Ikawa is focused primarily upon increasing efficiencies in its
existing 20,000-wquare-foot production facility. The company also plans to
increase catalog and internet sales while broadening and enhancing brand
awareness.
"Just
because we're located in Hilo, that doesn't mean that people across the
world can't become as familiar with our brand as they are with Godiva,"
Ikawa says. "The limited distribution of our product -- catalog,
internet and our own retail sales -- combined with our Hawaiian gourmet
quality, creates a mystique that people will go out of their way to
attain," Ikawa says.
And go out of their way they do. Many of
the tourists who frequent Big Island's retail store are from the Far East.
Upon arrival at Big Island Candies,
patrons are greeted with a friendly "Aoha!" from Lizell
Medeiros, Big Island's official greeter. Medeiros offers a free product
sample to each customer, then directs him or her to a counter offering
freshly brewed Hawaiian coffee.
Meanwhile, retail salespeople quickly
direct the heavy traffic with a presentation of the product-of-the-day, and brief explanation of the store's layout (often rattled off in
Japanese). Once in the store, customers are free to view the actual
production process taking place behind huge plate glass windows that
reveal the majority of Big Island's production facility. A
painstaking process
Closest to the viewing area is the dipping line, where five to seven plant
workers painstakingly dip the company's famed shortbread cookies into
Peter's chocolate. Each cookie is dipped individually, by hand.
"We couldn't
find a machine that could provide the proper angle of chocolate that we
wanted," Ikawa says. He notes that the dipping line is efficient
because production switches frequently throughout the day from a variety
of different shortbreads and dipped products to chocolate batches.
"This way, when we switch from one
product to another, we don't have to shut down the whole line, sanitize it
and then start it up again. And besides, the customers love to watch the
hand-dipping," Ikawa says.
Still one of Ikawa's key priorities in
2000 is to purchase new production equipment. Big Island's 20,000-square-foot production facility runs one shift daily, yet manages to produce all
varieties of the company's diverse product line. And while the Hilo facility
produces a variety of chocolate-covered macadamia nuts, brownies, crisps and nut/marshmallow blends, Big
Island's plain and chocolate dipped shortbread cookies are the company's
most prolific sellers. Shortbread
cookie production begins in the bakery area, which Ikawa confesses to
placing in a hidden area of the plant. Shortbread
cookie dough batches are mixed in one of three Hobart mixers then manually
dropped into an extruder. The result is a series of rectangular blocks of
cookie dough that are wheeled to a cool room for chilling overnight.
The next morning,
the dough blocks are run through a slicer that cuts the dough into
rectangular slices. The slices are placed on large cookie sheets that are
subsequently place into one of three Baxter ovens. After baking, the
cookies cook, and are manually wheeled to the dipping line. After dipping,
the chocolate is allowed to set on the cookie overnight.
The next morning, cookies travel first
through a Safeline metal detector, and then to Formost Packaging's
FW340mII Fuji form, fill, seal wrapper.
After wrapping, the cookies are manually
packaged into Big Island's gold boxes, which are then sealed in cellophane
before being placed either on the store's shelves, or into one of many baskets
for orders via the catalog or internet.
Says Sherrie Ann
Holi, chief operating
officer, "One of our biggest priorities right now is to really get
the catalog and internet portion of our company going, and try to reach
more people out there."
The company launched its website last June,
and was shocked at the immediate response. Plans are to continue
fine-tuning the website with frequent updates, including announcements of
new products, which the company makes quarterly.
Meanwhile, catalog sales continue to climb,
and although the company's mail-order business is five years old, Holi
believes it has great potential for growth.
"One of the
issues we've been wrestling with is our brand equity," Holi explains.
"Our old company logo is attractive, and we like it, but we were
afraid that our company name was lost. So, we introduced a new identity
this year. We'll continue to use the old logo, but our new identity
answers the issue of people being able to read and recognize our name.
The new logo, as described by Big
Island's Spring 2000 catalog, represents the company's heritage, traditions,
and commitment to embrace the future.
"The swirl at the heart of the logo
symbolizes positive energy moving like the waves of the ocean while also
representing the swirl of chocolate," the catalog reads. "The
brushstroke line suggests the universal link between the past and future,
and our desire to connect the world by sharing gifts of
aloha with you." The logo's
representation of positive energy reflects Ikawa's commitment to positive
energy at Big Island Candies. "We have a very low turnover rate here
because I believe that if a person is happy, that energy gets directed
into the product, and into the organization as whole," Ikawa says.
Ikawa, a community philanthropist and avid
golfer, often offers tidbits of his life's philosophy during conversation.
And, he has weathered blows that add credibility to his words. "I
nearly went bankrupt three times," he says with perfect candor.
"But I didn't fail because I never gave up. I just refused to give
up."
Ikawa has spent the last decade training
his key managers in the school of tenacity. His stepdaughter, Holi, has
been with the company for 10 years, as has Bonnie Honda, the company's
chief financial officer.
"I'm getting old," Ikawa jokes.
"And basically all I want to do is to play golf. I've prepared
Sherrie and Bonnie to run the company successfully whether I'm here or
not."
Nevertheless, Ikawa's hands-on approach
cannot be denied. Nor can his penchant for hanging tough until troubles
melt into gold. And according to Ikawa, Holi and Honda are equipped to
carry the torch. "They're good, and they're tough. They just need to
keep believing in that."
END
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