Darrell Lea hits licorice and chocolate payday in US as Anthony Albanese opens expanded Sydney plant

Americans can’t get enough of Aussie confectionery giant’s licorice and chocolate bullets, with Darrell Lea investing $45m to expand its Sydney factory. And even the PM is a fan.

Americans are quickly falling in love with Darrell Lea’s famous licorice, assorted chocolate bullets and Rocklea Road to emerge as a major export driver for the iconic Australian confectionary company, giving it confidence to invest $45m in expanding its Sydney factory.

And the boss of the almost 100-year-old licorice and chocolate maker, which also owns Life Savers, believes consumers will still have the appetite and disposable income to pay for his treats despite a looming interest rate hike on Melbourne Cup day, rising rents and other cost of living pressures.

Darrell Lea chief executive James Ajaka told The Australian on Wednesday after Prime Minister Anthony Albanese officially opened the expanded confectionery manufacturing plant in Ingleburn, Sydney, that the company’s annual revenue has almost doubled in the last few years to $500m.

“Our (confectionary) segments are seeing strong growth and particularly at a time when maybe consumers are pulling back a bit on discretionary spend, affordable items or snacking items are on the rise,” Mr Ajaka said.

And its global growth is primarily coming from the US, where shoppers can’t get enough of Darrell Lea licorice or chocolate bullets, which are known as bites over there. Darrell Lea now exports around $80m of confectionery to North America and into popular retailers such as Costco, Trader Joe’s, Walmart and CVC Pharmacy.

Darrell Lea licorice and chocolate are proving a hit in the US.

Darrell Lea, founded in 1927 and bought by private equity firm Quadrant for $200m in 2018, is now the largest manufacturer of licorice in the world.

Over the last 12 months, its Ingleburn factory has pumped out one billion chocolate bullets, as well as tonnes of Life Savers and fruit Pastels. It is part of Rite Bite Group that also houses other snacking and health brands such as Well Naturally and Munchme.

“We 18 months ago launched Life Savers in a big way into that bag format, up against tough competition like Allen’s and the Natural Confectionery Company, and in that period we have captured 14 per cent to 15 per cent of market share and so for us the investment is primarily based on global growth supporting Australia growth and giving us capabilities to innovate.”

Cost pressures and inflation – led by a more than 60 per cent increase in cocoa prices and 50 per cent rise in sugar in the last year or two – has pushed Darrell Lea to lift its own prices slightly but Mr Ajaka says it has been in line with the broader market and hasn’t stopped consumers filling their baskets with his raspberry licorice, fruit tingles or soft licorice.

“We have put prices up a bit, but in line with the market, and per 100 grams our products are still seen as great value for money, hence our sales continue to grow.

“From a value perspective, the (confectionary) category is still up around 6 per cent. I’m a father of four young kids, and I think a lot of parents are probably more entertaining at home. There are probably some things from a discretionary perspective that they are parking, and I think affordable treats and brands that they love are still being consumed,” he said.

The $45m investment in the Sydney factory will double its output and Mr Ajaka said it underlines the confidence the group has in its brands and the broader category, even if interest rates continue to rise and cost of living pressures mount to squeeze household budgets.

“You can buy a bag of bullets that will last a family of four or five for a week, for $5, and I think we are well-placed to cater to all types of economic cycles. And so we feel confident in the products we are making, the customers we are working with and the way we are engaging with consumers.”