K Kellanova

Elf Ernie Keebler and crew will report to Italians

By Micah Maidenberg and Eric Sylvers 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 16, 2019).

In a sign of the times, baker Ernie Keebler is getting a new overseas boss.

The legendary figure has for nearly a half-century run a Kellogg's factory said to churn out some of America's most-known cookies. The plant, called Hollow Tree, is part of a sale to an Italian confectionery giant.

Mr. Keebler isn't worried about layoffs or a factory closure -- a perk of being fictional. Even so, he and co-workers wait anxiously for what comes out of the recently announced $1.3 billion purchase of Keebler and other snack brands from Kellogg Co. by Italy's Ferrero Group.

The Keebler matriarch, who has seen her share of changes, is putting on a brave face for Florence in accounting, Elmer the apprentice and the rest. Kellogg's provided written responses from the Hollow Tree crew to questions from The Wall Street Journal.

"Naturally, a few of our elves were a bit nervous at the big news," Ma Keebler said, through a Kellogg's spokesperson. "I've been working the Magic Oven for a long time, and I assured the elves we will be just fine!"

Under various owners, the workers at Hollow Tree have been credited with making Keebler-brand cookies, including Chips Deluxe, E.L. Fudge Elfwich and Fudge Stripes. British baking company United Biscuits bought Keebler in 1974 and sold it in 1996. Kellogg acquired Keebler five years later.

"The elves have the same vibe as the Seven Dwarfs," said Bob Welke, a former creative executive at Leo Burnett, the advertising agency that gave birth to the elves in 1969. "Sometimes they fumbled their way to victory, but they always did the right thing."

Though Hollow Tree will end up a small corner of the Ferrero empire, its diminutive workers punch well above their weight among Keebler customers.

"I don't care if you're 3 or 70, that's what it's about, the elves in the tree," said Teresa Weese, a bus driver in Columbus, Ohio.

Ferrero said it planned to invest in Keebler: "We intend to offer employment to every elf and human directly affected by this acquisition, whether they work their magic in the Hollow Tree or elsewhere."

Naturally, the takeover is a topic of conversation among Buckets, Fast Eddie, Zack, Zoot, Leonardo and the rest of the team, from the back office to the factory's Rube Goldberg-style assembly line.

"We're no strangers to change," said the elf Chloe, an innovator and recipe taste tester.

Ernie Keebler said Doc Keebler was "practicing and perfecting his Italian baking techniques." Even Ma Keebler, he said, "loves hazelnuts and sure has some big ideas for new cookies."

Products have come and gone over the years. Some longtime Keebler fans have campaigned on Facebook for Keebler to resume making Pizzaria chips and Magic Middles cookies.

With luck, Hollow Tree may avoid the fate of other legacy factories lost in the wake of the global economy.

The Keeblers are fortunate to be in the cookie business rather than say, steel or textiles, experts say. Domestic bakery production has mostly remained in the U.S. Manufacturers want to be close to customers because of the relatively short shelf life of baked goods.

One exception was the decision of Mondelez International Inc. to move production of Oreo cookies from Chicago to Mexico.

Likely no confectioners in the U.S. or abroad can compete with Hollow Tree and its bespoke production techniques, such as using rocketry to color chocolate chips, according to Keebler TV commercials. The factory has more than a dozen employees, including relatives.

Its new owners, too, are a longtime family operation.

In 1946, sweet-shop owner Pietro Ferrero founded his namesake company in the northeast Italian town of Alba. To make up for a shortage of cocoa during World War II, he had experimented with mixing hazelnuts and chocolate.

The smell of chocolate still drifts the half mile from the Ferrero factory to central Alba if the wind is blowing in the right direction.

Mr. Ferrero's son, Michele, is credited with inventing Nutella, the chocolate-hazelnut spread, as well as Tic Tac candies. The younger Ferrero was said to have spent five years testing the shape of what became the foil-wrapped Ferrero Rocher chocolates.

Michele Ferrero's son Giovanni took over the company in 2011. He has since engineered acquisitions in the U.S., including Baby Ruth and Butterfinger candy bars. Annual revenue surpassed $12 billion in the last fiscal year.

Old-timer Doc Keebler sounded unconcerned about any disruptions at the Hollow Tree factory. "What changes?" he said.

The Keeblers, he noted, were still making good cookies.

Write to Micah Maidenberg at micah.maidenberg@wsj.com and Eric Sylvers at eric.sylvers@wsj.com

(END) Dow Jones Newswires

April 16, 2019 02:47 ET (06:47 GMT)

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