Staying ahead of the pack
Acquisitions have played a major part in Tootsie Roll’s ability to not only stay afloat while others sank but in its ability to increase profit margins. In 1988, Tootsie Roll bought out the Charms Co., known for its Charms Blow Pops. That investment made Tootsie Roll Industries the world’s largest lollipop producer.
Five years later, the company purchased the caramel and chocolate brands of the Warner-Lambert Co., which included Junior Mints, Sugar Daddies, Sugar Babies and Charleston Chew. And it ventured into the cotton candy business in 2000 with the acquisition of O’TEC Industries and its Fluffy Stuff Cotton Candy. Also that year, it acquired Andes Candies, which includes the Andes Créme de Menthe Thins, Cherry Jubilee Thins and Toffee Crunch Thins, as well as a line of Mint Patties.
A lot of care goes into purchasing another company or product.
“It has to be a brand,” says Ellen Gordon. “And it has to have a niche, a message, and we take a look at it and see what we can bring to the table, if our marketing or manufacturing expertise can help it. We have to look at it and see what potential there is for us and how it fits into our organization.”
Tootsie Roll has walked away from some deals that management did not consider “the right fit for various reasons,” Gordon says. But there are still deals to be made — the company plans to continue growing its line of brand names to keep it going for another 100 years.
“We keep our nose on the times,” Gordon says. “Styles have changed. We keep coming out with new products and things that would fit the times better and fit the consumer better at that time.”
The company also continues to invest in its own equipment to stay lean and productive. Tootsie Roll invests millions of dollars to ensure that its plants are state-of-the-art, Gordon says. The company continually implements new equipment and updated information technology to run more efficiently, using its in-house design team to build some of the machinery.
