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Sweet expansion plan

During its formative years, Pete's Gourmet Confections operated conservatively, leasing space as needed when big orders for its candies came in.

"We operated in one small industrial unit and then a second, a third and occasionally we rent a fourth for larger projects," said Pete Croyle, who owns the company with his wife, Jennifer.

Now the burgeoning candy company has run out of elbow room at its plant on Bateman Drive in Central Point.

As a result, Pete's Gourmet Confections will go before the Medford Planning Commission Thursday, seeking a conditional use permit to remodel a 10,000 square-foot building along Merriman Road currently zoned for light industrial fabrication business.

The building most recently was used by spa lid maker Coverplay, which moved into the building in 2003. Before that, plumbing contractor Cal-Ore Mechanical operated there for eight years.

In the company application, Croyle noted his company will produce less traffic, and its production equipment is quieter than previous uses.

The larger kitchen will allow the confectioner to produce up to 6,000 pounds of goodies per day.

"This will allow us to expand into other types of confectionery," Croyle said.

The company produces rocky road and old-time candies along with marshmallow lollipops. More recently the company has marketed Pete's STOUT Beer Bites — nougats possessing maltiness and hop flavor without alcohol — in small batches.

The Croyles moved to the Rogue Valley from Van Nuys, Calif., in 2006. He grew up in Coos Bay, but they decided the coast was a little too wet for their tastes.

"We found the best of all worlds in the Rogue Valley," Croyle said.

Both husband and wife worked in the motion picture industry — he was a carpenter and she an art department decorator.

"We kind of fell into the confection business," he said.

The couple traditionally made Christmas gifts every year, such as lavender bath salts or baked goods, he said.

"One year, we made a nice kit of handmade marshmallows and cocoa from my grandma's recipe," Croyle said. "We had a few leftover marshmallows and I took it to the guys I worked with for their ski trips or to give to their grandmas."

The marshmallows proved a hit.

"We retired ourselves from the movies and focused on the candy business," he said.

They had no grandiose schemes or plans to lock horns with Kraft or other major manufacturers, but still managed to grow while a lot of companies were falling by the wayside during the Great Recession.

"Over time, we built a good customer and good wholesale base," he said. "We just got larger and larger and began serving larger and larger customers."

It came down to sending samples to potential customers, cold calls and talking to people at stores to set up meetings with buyers, Croyle said.

"We have gotten to where we are because we have boot-strapped our entire business," he said. "We've only done what we could afford to do and haven't taken out loans. Slowly and methodically, we're getting a little larger and we've been very conservative. A lot of businesses are no longer in business because they over-leveraged their credit."

The company first hit the $1 million sales mark in 2008 and has regularly been in the $1 million to $3 million bracket since then, Croyle said.

When big orders come in — such as a recent order for five truckloads of marshmallows — the staff grows to about 30.

Contractually he can't name his customers, but suffice it to say they included the world's top coffee company and other well-known retailers, who put their name on Pete's products.

"We're a 10-year, overnight success story," Croyle said.

The company's preservative-free, all-natural-ingredient marshmallows are made from tractor-trailer loads of sugar and 2,500-pound plastic totes of syrup.

"The marshmallows we make can be made from whatever you need in your kitchen cabinet," he said. "Kraft or the big companies put stuff in it that's not good for you. We can pronounce every word of the ingredients that go into it. We like to think the stuff we make we would give to our kids or to our moms."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.

Francisca Martinez makes marshmallow filling at Pete's Gourmet Confections on Monday in Central Point. The company has outgrown its space and hopes to move to a Medford site if it can get approval from the city. - Mail Tribune / Jamie Lusch