Philly candy maker Zitner changes hands

The candy-fueled holiday of Halloween may be less than three weeks away, but in a North Philadelphia factory 'tis the season for chocolate-covered Easter eggs.

Zitner Candy Corp. is in full production mode on a regional sweet treat that begins to appear on store shelves in mid-February and is often sold out by Easter.

The workforce of 10 full-timers at a tiny factory on North 17th Street near Allegheny Avenue swells this time of year, with 12 part-timers and more than 40 seasonal employees who hand-shape the fillings, feed the chocolate-coating machine, and inspect each egg before it's packaged.

Little has changed in the 90 years the company has been cranking out chocolate eggs filled with peanut butter, coconut, marshmallow, and the one-and-only Butter Krak flavor. A smiling yellow rabbit still adorns its packaging. Even its ownership has been pretty stable: It was sold in August for just the third time.

Evan Prochniak, Kenneth Schuster, and Sam Sherman bought Zitner from Sidney Rosenblatt, who'd owned the candymaker for the last 20 years. Rosenblatt, who is also chief financial officer of Universal Display Corp., of Ewing, N.J., could not be reached for comment.

Founded by Sam and Annie Zitner in the 1920s, the company was owned and run by their nephew, Leon Sherman, for 54 years until his death in 1990.

Prochniak, a real estate lawyer in Media, said his four kids are thrilled he's in the candy business and have been bugging him to go on a tour. He'll keep his day job lawyering, with Zitner moving sweetly along under the leadership of operations manager Dennis Palladino.

Though Prochniak would not disclose how much he and his partners paid for the business, the property was sold for $1.2 million. The sale was financed, in part, by a $520,000 low-interest loan through the Pennsylvania Industrial Development Authority. Valley Green Bank, based in the city's Mount Airy neighborhood, provided additional financing.

Originally, Prochniak viewed the factory as a redevelopment opportunity. But the ongoing chill in the real estate business squelched that notion. Instead, he said, he began to see Zitner's candy business as "a diamond in the rough."

Zitner's is a Philadelphia candy brand the way Goldenberg's Peanut Chews and Asher's Chocolates are.

Draw a 120-mile radius around the city, and that's the core distribution area of its chocolate eggs through pharmacies, grocery and convenience stores, and national retailers such as Walmart and Target. Prochniak said Target intends to stock Zitner candy in 100 stores next spring, up from 10 stores in 2010.

Less visibly, Zitner has made chocolate-covered pretzels year-round that are sold under private labels in area supermarkets, usually in the bakery section. Prochniak said he hopes to expand that line geographically as well as promote its Novel T's pretzel line for corporate gifts.

Zitner had sales of about $2.5 million last year. If the orders retailers have been discussing come through, sales could hit $3 million this year, Prochniak said.

The company may develop products for other holidays and intends to apply e-commerce tools to get those Butter Kraks into the hands of former Philadelphians, who tend to pine for regional delicacies like a decent cheesesteak and a real soft pretzel.

But for Zitner's right now, it's all about Easter.