Downtown Chicago chocolate factory to close

Blommer Chocolate is closing its downtown Chicago factory following plummeting sales and increased maintenance and repair costs for the 85-year-old building, the company announced Friday.

Built in 1939, the brick factory is Blommer’s original production facility, known for sending an unmistakable chocolate smell throughout the Fulton River District from its location at 600 W. Kinzie St. The factory is closing because of “elevated operating costs” and “production reliability issues,” an outcome of the factory’s location and age, the chocolate company said in a news release.

Operations at the factory were shut down as of Friday, and the official closure is May 31, Robert Karr Jr., a spokesperson for Blommer Chocolate, said in an email. More than 250 people work at the Chicago factory, Karr said, and “some” will be offered other jobs within the company.

“The plant has served us well for nearly 85 years, and will be decommissioned,” Karr said.

In a Friday filing, Blommer’s parent company, Fuji Oil Holdings, said the chocolate company saw “extraordinary” losses in the third quarter of the fiscal year ending March 31 after struggling from the effects of the COVID-19 pandemic, rising raw material prices and interest rates, and increased fixed costs resulting from inflation. The company, which also suffered from a decline in U.S. demand for chocolate confectionaries, lost 10.1 billion yen, or about $66.7 million, in the third quarter, according to the filings.

The Chicago factory has also seen an increase in labor costs and “difficulties securing human resources caused by the location of the plant,” according to the filing. Closing the plant and shifting production to Blommer’s other factories is expected to improve the company’s operating profit by $30 million a year, Fuji said in the filing.

Mark Okita, chief operating officer and senior vice president of commercial, said the decision to close the Chicago location was “incredibly challenging yet inevitable.”

“However, in order to propel Blommer to the next level, we must embrace progress, transformation and elevation,” Okita said in a statement.

The closure makes room for the company to focus efforts and resources on the rest of the Blommer properties, and the company plans to invest $100 million in all three of the remaining production facilities over the next several years, Blommer said.

A planned expansion for the Campbellford factory in Ontario, Canada, includes a $60 million investment to make the factory “one of the largest confectionary coating manufacturing facilities in North America,” said Neil Fulton, general manager in Campbellford.

Other manufacturing facilities are in East Greenville, Pennsylvania, and Union City, California, where a total $40 million will help increase operational efficiency and reliability as well as automate processing and packaging equipment, Blommer said.

The North American corporate headquarters at the Merchandise Mart in Chicago will stay open. Fuji, the parent company, will invest in the expansion of lab capabilities at the Merchandise Mart location and create a research and development center. The new center, which is expected to open in the fall, will support future development, concept testing, processing and ingredient research and more, the news release said.

Fuji, a global supplier of oil, fat and chocolate, announced in 2018 it would buy Blommer Chocolate for $750 million, according to public filings. The sale ended three generations of family ownership for the cocoa manufacturer.

In 2020, the Blommer Outlet Store closed after almost 30 years to make room for updates and enhancements to the local chocolate factory. But improvements to the plant were delayed because of the effects of the COVID-19 pandemic, according to Fuji’s filing Friday.

Blommer, the largest cocoa processer and ingredient chocolate supplier in North America, said there are more than 900 employees across the company.