3D printed candy at SXSW: What's next?

Attendees at the SXSW conference are used to seeing the unusual. But this was a first: a 3D printer churning out candy.

The machinery was from 3D Systems Corp. (DDD), a major manufacturer of 3D printing equipment. The system has been in the works since at least January -- 3D Systems and confectionery manufacturer Hershey had announced a plan to create 3D printers for foods, rather than the plastics, metals, or other materials typically used to create items.

Unlike the machine building custom Oreos at SXSW, this probably isn't simply a gimmick or stunt. Hershey and 3D announced a multi-year deal. The machine, which will be commercially available, is called the ChefJet, with the line starting at $5,000 and expected availability in the second half of this year.

The stock price of 3D Systems has quintupled to about $65 from the company's 2011 IPO. It's not the only one in the market. ExOne Co. (XONE), another 3D printing maker, has seen much more volatility, but still the stock started at around $30 in early 2013 and is now between $43 and $44. German-based Voxeljet AG (ADR) is also well down from a 52-week high of $70 but still trades at $33.50, above the $13 IPO price. There was a general big drop when Barron's ran a warning about 3D printing companies seeing unrealistically high valuations. And yet, even with a lot of air let out of the 3D-printed balloon, significant investor interest remains.

Such companies are seeing good traction because 3D printers have proven themselves commercially serious and flexible enough to accommodate a growing set of uses, from costume gauntlets for Iron Man 2 to a 3D comic book cover and literally forming house parts that will be assembled into the final building.

What is intriguing about 3D printing is not blinding speed of manufacturing. The systems are still relatively slow, compared to traditional automated methods. But the systems have some significant advantages. Within a given type and size of manufacturing, a 3D printer has great versatility without the need for extensive tooling and set-up.

There's also the possibility of decentralized manufacturing. Companies can create smaller facilities near customers and create a variety of items, speeding delivery and increasing responsiveness to demand. Eventually, many consumers might own units that print out many product purchases, offering instant gratification and changing the face of traditional product creation and distribution.

Image: 3D Systems Corp.