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The Honolulu Advertiser
Posted on: Sunday, July 24, 2005

Candy lab seeks home for sweets

By John Schmeltzer
Chicago Tribune


CHICAGO — Knechtel Laboratories is the pre-eminent candy lab in the country — the place big companies, or small ones with big ideas, turn to when they want to create something new.

It has birthed the Frango Mint, the granola bar and other top-sellers for big firms that would rather not admit they didn't make it themselves.

But it's also a Land of Misfit Candies, where up to $6 million worth of unmarketed sweetness sits on shelves or locked in filing cabinets.

The oldest orphan is HK-25 — a premium chocolate, toffee and pecan treat akin to a rich man's Heath bar. After 25 years in development and a rejection from Nestle SA, it has been filed away since the mid-1970s, except for brief reprieves during the holidays when Knechtel executives make small batches for friends.

"This is our silver bullet," said Bob Boutin, executive vice president of the country's only independent candy laboratory, based in Skokie, Ill. "Somebody will want this someday."

The company is optimistic about hundreds of other secret sweets, too. It would like to find good homes for its new fruit bars, batter-fried peanuts, and caffeine-packed breath strips, for example.

Boutin believes a fruit bar, 85 percent of which is fruit concentrate, would be a hit with mothers searching for a healthy alternative to candy for their kids. Knechtel is certain the caffeine strips would be a natural for the military and businesses searching for products that could keep workers alert.

But Knechtel has a problem.

"We're good at being creative, resourceful and putting it in its basic form, but we're not a marketing company," Boutin said. "We've got $3 million to $6 million of finished concepts that we have developed sitting around here."

Little known outside the food and candy industry, Knechtel pulls in roughly $2 million a year running a kid's dream kitchen — mixing marshmallows, chocolates, compound coatings, gums, creams, fondants, high-boiled sweets, taffy, caramels, fruits, panned goods and more.

The lab offers a turnkey approach whereby clients can pay an annual retainer or pay $200 an hour — which pays for lab facilities, work from the 21-member staff and the costs of creating the new product — and leave with a new candy.

Next door, Knechtel operates a small manufacturing facility, Bentley Specialties Inc., which can produce up to 1 million pounds of candy a year while a candy maker readies its own plant.

"The companies want a finished product," said Arthur Krause, co-owner of L-K Enterprises LLC in Winnetka, Calif., which hired Knechtel to develop production plans for a corn flake cereal that produced its own milk when water was added. Knechtel is now trying to interest the Army in the product.

There is no rule on how much it costs to develop a product. Boutin said the company will work with entrepreneurs for as little as $3,000 to $4,000. Development of a product, however, likely will cost as much as $50,000, he said.

The company doesn't receive any royalties from its ideas once they go into production, he said.

And that business plan seems to be working.

Business is steadily expanding — 10 percent to 20 percent a year during the past few years, Boutin said — as companies increasingly search outside for new ideas.