Sweet smell of success: Liddabit Sweets’ Jen King and JoMart’s Michael Rogak in front of a pair of chocolate tempering machines at JoMart’s Avenue R factory in Brooklyn.
Two Brooklyn chocolate companies – one a South Brooklyn icon, the other a foodie upstart in trendy Industry City – are merging as both firms look for a secure future.
Liddabit Sweets, the creation of Jen King and Liz Gutman, is moving out of its Sunset Park production space and into the cramped Marine Park kitchen of JoMart Chocolates, founded in 1946 by Martin Rogak, the father of proprietor Michael Rogak. Financial terms of the deal are being finalized.
In an interview over flourless chocolate cake in the back room of Rogak’s Avenue R location, the two talked about the pressures of being an independent candy maker and why joining forces makes sense. JoMart’s revenue is in the low millions of dollars annually, said Rogak, while Liddabit’s sales are under $1 million, King said. Both firms are closely held.
“We were looking to grow the business just a little bit – no pun intended,” said Rogak, “and I thought I’d rather merge than hire more salespeople.” With the minimum wage in New York State set to rise to $15 an hour by the end of 2018 (by 2019 for small employers), Rogak needs to increase revenue to meet the rising costs of kitchen staff, but at age 65, he doesn’t want to take on years of debt to expand.
For King, who’s 39, and whose partner Liz Gutman will leave the business, the pressure to grow or die simply grew too strong, and the cost of expanding beyond their two-person operation grew too great. A marketing executive would add over $100,000 in salary alone, and they’d have to boost sales by $500,000 a year just to offset the costs. “All the math just started to break down,” said King.
The gentle merger allows King to bring her candymaking skills and existing customer base to JoMart’s small kitchen, where Rogak still makes candy with the same copper pots his father used.
Operating two distinct brands out of the same kitchen means both brands will need to learn to sell to each other’s customers, but they’ll be able to combine forces on everything from buying raw materials to marketing. Liddabit will have it’s own retail space in JoMart’s Avenue R building.
Liddabit tends to sell prepackaged candies, while JoMart sells unpackaged chocolates to other stores around the city. Liddabit specialties include chocolate covered caramels while JoMart has a strong business in chocolate novelties, like Easter bunnies and Thanksgiving turkeys. JoMart also makes many of its own fillings in house, including marshmallow and hazelnut butter, something few small chocolate makers do.
“We’re each doing something the other doesn’t do,” said Rogak. “We’re not trying to conquer the world, but we can satisfy all our customers and maybe a little bit more.”
The merger may also help Rogak solve a gently pressing issue: succession. His father and grandfather were candymakers, and Rogak’s two grown daughters work in health care. “If this tree can add some branches, why not,” he said.
“Mike has been a godfather to us,” said King, describing Rogak’s willingness to help newcomers to the city’s chocolate and candy-making world. She says she’s confident the two will be able to complete the merger. So is Rogak.
“At the end of the day,” he said, “we’re just in the happiness business.”