One Sweet Spot

Annie B’s and B.T. McElrath under one roof at Henke Foods’ new production facility.

New neighbors are quite literally poppin’ up in Mahtomedi. Henke Foods is building out a 20,000-square-foot production facility—formerly the Kowalski’s central bakery—for its growing line of specialty food items. The simple building almost disappears between Century College and Chuck & Don’s, but it houses a delicious scene right out of Willy Wonka and the Chocolate Factory.

Annie B’s has a 40-year history of creating small-batch popcorn and caramels in Kellogg, Minn., and Justin Henke, who had a background in food sales, bought the company in 2012. In 2015, Henke joined forces with Northeast Minneapolis-based B.T. McElrath Chocolatier to expand the product line under the name Henke Foods. The consolidation has been great for business, but the heart of it all is a simple love for all things delectable. “I’ve just always loved candy,” Henke says.

The popcorn, caramels, chocolate and novelty items are all still made by hand in small batches from high-end, all-natural, locally sourced ingredients. And about 30 Henke employees—some from Annie B’s and B.T. McElrath—take care of the entire production process, from purchasing to running the confection kitchen to packaging, all right in Mahtomedi.

The high-touch approach is one that helped in the acquisition of the building itself. Kowalski’s has carried the products for years and worked with Henke to come to a mutually beneficial purchase agreement. The deal closed within a month, and production was up and running quickly because of all the food-safe finishes and industrial kitchen equipment that were already in the space. There were some updates, like new flooring and electrical throughout, and it took time to figure out how two distinct product lines could be combined in one facility, with one staff.
“Our team has really stepped up, especially with training in new people,” says Henke. With the two brands came the unique challenge of unifying workplace cultures while keeping the best characteristics of each. “That’s been the biggest challenge, but also the most fun. It’s a fresh start in a lot of ways—we get to create a new destiny together,” Henke says.

The McElrath line moved from Minneapolis last winter, with Annie’s following in the spring. By early summer, both brands—and their combined staff—were in full production while the company renovated offices and public-facing spaces.

Past the front offices, there are gigantic popcorn kettles that swirl coconut oil with huge metal agitators, Whirly-Pop-style. Copper pots, “fire cookers,” are held over high heat to melt caramel before popcorn can be dunked in it, then cooled in a refrigerated room with mesh whirlers to cool and separate. There are mountains of bagged sugar and corn kernels labeled mushroom, yellow and white. “They’re all shaped differently and respond differently to the popping process,” explains Henke, who’s clearly become an expert on the subject.

As we walk into the 65-degree confectionary space—a sea of stainless steel and huge versions of recognizable kitchen tools—Henke rattles off product types and the unique processes they involve. “Enrobed items,” he says, are the chocolate-coated ones, like peanut-butter cups and chocolate-covered caramels. The R&D team is working on a chocolate-covered popcorn, a nod to the new partnership.  Henke and the team are using the expanded facility to dream up products they couldn’t have made before. “We all do the taste-testing; I guess that’s a team effort,” says Henke with a chuckle.

Jenny Mahoney is deli director for Kowalski’s, overseeing products and a team of deli managers in stores across the area. She’s been with the company for 21 years, working directly with Henke Foods for the last few, and she’s tasted her share of Henke Foods products.

“I have a hand in what we carry and what we want the shopping experience to look like,” says Mahoney, who pays close attention to food trends and fills the shelves with up-and-coming products that are as local, sustainable, and interesting as possible. “If we have the opportunity to work with a local producer, we will. Working with Henke Foods has always been a wonderful partnership,” she says. “They’re carrying on the legacy of B.T. and Annie’s and building on it, which is just so fun. I can’t wait to see what they do next.”

Give ’Em a Try

Henke Foods has historically focused on customized gift items and wholesale contracts, but hopes to make use of its new high-traffic location by adding a retail store in the front of the building. In the meantime, look for some of these favorites online or at local retailers.

In 2016, the company sold 115,000 large bags of its Original Caramel Corn. It’s gluten free, made from non-GMO popcorn, and downright delicious. Try the cheddar or sea-salt caramel varieties—or the Triple Threat mix of caramel, cheese and white—to change it up.

DIY Caramel Apple Kits were released in early summer, with a pumpkin spice variety out this fall. Each includes a pound of the signature Annie B’s caramel—which is all-natural and gluten free—with instructions and sticks. Mahoney is excited to carry them at Kowalski’s in the produce section, alongside deliciously dippable Minnesota-grown apples. “We are super-pumped about those,” she says.
The Salty Dog Chocolate Bar is a solid 3 ounces of deliciousness, with butter toffee bits in 70-percent dark chocolate, topped with rough sea salt. Mahoney swears by them as Valentine’s Day or year-end gifts that are sure to score extra gold stars among teachers. And although he tries not to be too partial, they’re Henke’s favorite as well.

One-up the trick-or-treat competition this year (or dress up your stash for the parents) with individually wrapped Annie B’s Caramels. The company sold 10 million pieces of caramel last year in classic caramel and fun flavors like coconut, blueberry and cherry. One word: Yum.

A few years ago, Annie B’s was featured on Oprah’s “Favorite Things” list. Before the reveal, Henke worked directly with O, The Oprah Magazine, to create a special-edition gift box. “There was a very short window to get everything together—we were scrambling to get enough production space,” recalls Henke. “But it was a lot of fun, and sales went through the roof.”
Oprah’s Favorite Gift Boxes are made in the USA—out of solid pine—and filled to the brim with 35 original Annie B’s caramels. The year they were featured by Oprah, over 5,000 boxes flew off the shelves as “You get one!” and “You get one!” rang out coast to coast.