A Sweet Deal
Written by Lou Ransom
Published by Pittsburgh Tribune-Review, July 2, 2002
Jon Prince doesn't eat much candy, but he lives and breathes it.
Prince, 36, is the third generation of family ownership of McKeesport Candy Co., a candy wholesaler in McKeesport. The company is celebrating its 75th anniversary this year, a monumental achievement for a business in this highly competitive industry.
"Most companies don't survive half that long," said Prince, whose grandfather, Ernest Prince, started the company in 1927. His father, Jerry, still comes in to work occasionally and holds the title of president. So far, there is no fourth generation to carry the family business.
" It's new every day," said Jon Prince, who grew up running among the aisles of candy, and thought he'd pursue a career in art history. But after a year with the National Endowment of the Arts, he realized he still had the family sweet tooth and came back to the company in 1990
"People ask me why, and I just can't explain it," he said of his passion for the candy business. "I think it is because of the changes in the business; every day, we are handed a square block and we have to make a wheel."
The changes in the candy business, over 75 years, and over the 11 years that Jon Prince has been at it have been "mind-boggling," he said.
The company's unassuming, 25,000-square-foot office and warehouse complex on McKeesport's run-down Fifth Avenue, is piled high with gummy sharks, malted balls and caramels, ready for packaging, along with the familiar bright colors of Reese's Cups, Twix, Lifesavers and Twizzlers. Some new products, like Clicker-Lickers, a combination toy, whistle and lollipop, line the shelves while a 10-pound Hershey Bar is among the novelty items that weigh down another shelf. In addition, the company also sells cigarettes wholesale.
" The secret of our success," said Prince, "is that we sell service as well as candy. It is the most important aspect of this business. After all, everybody sells the same candy. We don't have a widget that we produce that is better than the other company's widget. It is all dextrose. The product is actually secondary. But our hallmark has been our attention to service."
That service includes a 24-hour support hotline for the rapidly growing fund-raising arm of McKeesport Candy. "That is one of the niches we have found," Prince said. "The fund-raising business has been notorious for not being very customer friendly. I wanted to change that.
" We work with schools, church groups, family reunions. We sell to organizations and individuals. We have one young girl that comes in here to get one case at a time, to fund her trip to Chicago to get dance instruction," Prince said. "We put strings on the case so she can take it home on the bus."
" This is a business of constant evolution," said Tom Griffin, a 30-year veteran of the company, who runs the operation. "It is always changing."
Part of the change, he said, is the dwindling number of retail outlets that sell candy.
" Ten years ago, there were 100 independent drug stores in the Pittsburgh area," Griffin said. "Now there are only 12, and I think that all of them are up for sale. Now you have the Wal-Marts coming in, and it will only get worse."
McKeesport Candy had a brief foray into the retail candy business, with its Trifles candy shop in Station Square. That store closed down late last year, and all of the merchandise was moved back to the McKeesport building. "We don't get much foot traffic here," Griffin said. "People walk past here all the time and never know we sell candy."
But candy is not going away. Recent sales figures show that sales of confectionery products increased 3.3 percent over last year, despite a soft Easter, according to figures from Information Resources Inc. for the National Confectioners Association. Gum sales, particularly sugarless gums, have led the way.
The company is probably best known for its Todd's Candy brand. The company gets thousands of pounds of candy in, and repackages it in Todd's bags, doing everything by hand. "More than 95 percent of what we buy in bulk we repackage," all by hand and all following Food and Drug Administration guidelines, Griffin said.
He said those labels have to include all ingredients and even specify if the contents were made in an area where peanuts are processed, because of some people's allergies to peanuts.
The bulk of McKeesport's Candy's business is to supermarkets and hospital gift shops. They sell approximately 8,000 to 10,000 pounds of candy every day.
" This is really a good area for candy," said Prince, who would offer no guess why that is so. "There are probably more candy wholesalers in the Pittsburgh area than in any other area of the country."
The company also is the master western Pennsylvania distributor for Jelly Bellies gourmet jelly beans, manufactured by the Herman Goelitz Candy Co. of Fairfield, Calif. The factory holds hundreds of pounds of Jelly Bellies' 50 official flavors, from Yankee Doodle Candy to new Chocolate Cherry Cake.
Griffin said McKeesport Candy fits in the middle of the size range of local candy wholesalers, which include companies like Fairfield Confectionary in New Castle, S&S Candy and Cigar Co. on Carson Street and Pittsburgh Snax & Nut Co. and Hermanowski's on Penn Avenue.
And more competition is coming. Retailing giant Wal-Mart has recently announced that it will open candy stores within its super stores. Because of its size, Wal-Mart does wholesale business of its own, along with its sister Sam's Club membership warehouse stores.
" We've had customers come in here and try to get us to match the prices they can get at Wal-Mart or Sam's Club," Griffin said. "We ask them, 'Will they give you customer service. Will they deliver?' When you add those costs in, they can't compete. We're a full-service wholesaler, and that's something you can't get from a warehouse club.