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Chocolatier Lindt To Buy Russell Stover

STEVE INSKEEP, HOST:

So the Swiss chocolate maker, Lindt, has announced plans to gobble up Kansas City-based Russell Stover, the company behind all those Valentine samplers. I know what you are thinking. I know what you are thinking - you know, that's all very fine. You're thinking about all of this business news, but what does it mean for my chocolate? Well, Frank Morris of member station KCUR in Kansas City reports.

FRANK MORRIS, BYLINE: Mr. Russell Stover started his boxed candy business with money he made helping to invent the modern ice cream bar. He brought it to Kansas City in 1931, where the company still has dedicated stores and a faithful following.

JEN BUSTAMONTE: Oh, my gosh. I come here - this embarrassing - I come here every day.

MORRIS: Every day?

BUSTAMONTE: Every day.

MELISSA ROHACH: Every Christmas, we would buy the two-pound box and we would see how long it would last, you know - how many days? - Usually done by December 26, so.

MORRIS: Jen Bustamonte and Melissa Rohach are lifers. They show the kind of loyalty that Jon Cox, an analyst with Kepler Cheuvreux, said made Lindt sweet on Russell Stover and its half billion dollars in annual sales.

JON COX: Lindt is obviously taking over or announced it will over something of an American icon.

MORRIS: Russell Stover, which also makes Whitman's is the third largest chocolate maker in the U.S. now. After the merger, Lindt will be. The exact terms of the deal aren't public. But analyst Jean-Philippe Bertschy with the Bank Vontobel says Lindt will spend something over $1 billion for customers it might otherwise spend years wooing.

JEAN-PHILLIPE BERTSCHY: It's all about taste. It's all about consumer preference, and when you grew up with a specific chocolate, you will always go back to your chocolate.

MORRIS: Bertschy says the United States as a whole goes through more chocolate than any other country. But chocolatiers still see lots of headroom in the market because per capita, French, Germans and Britons eat much more. Lindt has grown substantially in the United States since buying Ghirardelli in 1998. And Bertschy says Russell Stover's 2,700 workers needn't worry about the efficiencies that often cost jobs.

BERTSCHY: Lindt has been, in the past years, always a growth company. They like investing in stuff - investing in employees. So I don't think this is really to cut costs and to lay off employees, on the contrary.

MORRIS: That's partly because Lindt and Russell Stover make fundamentally different products.

RENE BOLLIER: It's an interesting pairing. I would - I would never have guessed it.

MORRIS: Rene Bollier is a third-generation chocolate maker in Kansas City. His family owns Andres, a high-end Swiss-style place just a few blocks from Russell Stover's headquarters. He loves Lindt's premium chocolate and says Russell Stover's product is, you know, sweet.

BOLLIER: One could almost be fast food and one to be fine dining. One is a total experience. It just leaves you wanting more and one gives you your fix quick, but it doesn't really leave you wanting anything.

MORRIS: The merger is not going to leave Lindt wanting for production capacity or U.S. distribution. Russell Stover runs four factories and ships to more than 70,000 stores. Bollier says he hopes the influx of Swiss money and know-how shake up the U.S chocolate industry. For NPR News, I'm Frank Morris in Kansas City. Transcript provided by NPR, Copyright NPR.

Frank Morris has supervised the reporters in KCUR's newsroom since 1999. In addition to his managerial duties, Morris files regularly with National Public Radio. He’s covered everything from tornadoes to tax law for the network, in stories spanning eight states. His work has won dozens of awards, including four national Public Radio News Directors awards (PRNDIs) and several regional Edward R. Murrow awards. In 2012 he was honored to be named "Journalist of the Year" by the Heart of America Press Club.