In 1946, Los Angeles was home to 25 family-run, commercial candy manufacturing businesses. Today there are two and soon there will be one.
The Ben Myerson Candy Co. Inc., maker of Sunkist Gourmet Fruit Gems, has sold its candy-making operation to Fairfield-based Jelly Belly Candy Co., which will move much of it out of the city.
Myerson Candy has been operating in Los Angeles in some form for 117 years. Chairman Bob Myerson, now 82, has been working for the company for 70 years. (He started sweeping the floors at age 12).
In fact, Myerson’s been coming to work at 5:30 a.m. for 60 years. He is known for spending hours poring over every invoice to keep an eye on which drivers are reporting missing goods and which customers don’t have cash for payments.
“It’s going to be a tough adjustment,” Myerson said of his upcoming retirement.
The company will continue to exist, but it will focus on wine and spirits. Myerson Candy is the parent of Wine Warehouse in Commerce. The family also manages 21st Century Spirits LLC, which owns Blue Ice Vodka. The candy-making operation to be closed is downtown at 928 Towne St.
“My children are involved with the wine and spirits company and not interested in continuing with the candy, which is their prerogative,” Myerson said.
The Myerson candy company made $280 million in revenues in 2005. Myerson’s eldest son, James P. Myerson, president and chief executive of Wine Warehouse, said the sale of the candy division will cut revenues only by $10 million or $12 million.
About 80 of the company’s 550 employees are affected. Jelly Belly is actively recruiting them with expenses-paid trips and tours of the local school district but doesn’t expect to get more than 20 percent of the staff to relocate to Fairfield, which is about halfway between Sacramento and San Francisco. Jelly Belly will take over operations on Nov. 1 and gradually move the operations north.
The sale, which James P. Myerson calls “as close to a handshake deal as the attorneys would allow,” underscores how the business world has changed in the last 60 years.
“It’s a whole different way of doing business,” said Herman Goelitz Rowland Sr., chairman of Jelly Belly, who added that the parties didn’t quibble over details during the negotiations. “I’ve known the Myerson family all my life and my parents (knew them) before me,” he said.
Family Affair
Rowland blames inheritance taxes for what he calls the disappearing family candy business.
“Families can’t figure out how to pay the inheritance tax, so they sell their business. That’s one of the things that drives family businesses out. We almost lost the business when my grandmother died,” Rowland said.
“Now I’m working in every way I can for my kids to get the business. I need to die in 2010 because there will be no inheritance tax (that year) and my kids will be able to carry on.”
His company, founded in 1869, has already passed through three generations.
Susan Fussell, senior director of communications at the National Confectioner’s Association, doesn’t believe there’s a dearth of family-run candy businesses.
“I think you do sometimes hear that family businesses are being sold, but it’s often to other family businesses. This story is a perfect example of that,” she said. Fussell added that Mars Inc., one of the world’s largest candy companies, is still family-run, and Tootsie Roll Industries Inc. and Just Born Inc., the maker of Peeps, are other examples of family candy businesses.
“The candy industry was built on family businesses and it remains very much a family industry today,” Fussell said.
Still, Myerson said the local customer base has been dying off for years as well.
“There were 25 or 30 customers (in the 1940s), all wholesale candy and tobacco dealers, vendors, vending machine operators. Now they’re all gone. The small, independent candy business has disappeared. The business is all handled by large, multi-state companies, and so our customer base has disappeared,” Myerson said.
Cindy Brooks, product manager for Adams & Brooks Inc., the last family-run candy company in Los Angeles and the buyer of Myerson’s chocolate line, said California laws have made it hard.
“We are seeing a lot of candy companies move out of California, others are selling or going out of business,” she said. “Others move out for business reasons. Insurance and minimum wage are tough issues.”
Adams & Brooks is staying put because “it’s part of our heritage,” she said. The company just keeps looking for more ways to streamline operations, she added.
Brooks’ father, Emmett Brooks, met Paul Adams when he picked him up hitchhiking on a cross-country trip. They started the business in L.A. a few years later in 1932.
New Phase
In 1974, the Myerson candy became the first domestic licensee the second ever of Sherman Oaks-based Sunkist Growers Inc. Sunkist was founded in 1893. Myerson’s father, Ben, started working with Sunkist on pectin candies, natural fruit gels, in the 1930s.
Sunkist now licenses its name to more than 600 products. About 7.2 billion products are now sold under the Sunkist name every year.
Myerson Candy’s business has been predominantly Sunkist fruit gel candy made under the Christophers name. The company still makes a Christophers line of chocolate candies. Since chocolate doesn’t fit into Jelly Belly’s product line, the company sold the chocolate bars to Adams & Brooks Inc., which makes Coffee Rio coffee candy and Whirlypop.
Adams & Brooks in downtown L.A. will take the chocolate-making machinery. It also now owns the brand name and trademarks.
Brooks said its business won’t grow much, but adding Myerson’s Good News bar and Big Cherry bar to its list of chocolates will make its customers happy.
Jelly Belly, on the other hand, a $140 million company with 700 employees, expects the company to grow about 10 percent with the Sunkist products. The company anticipates more growth in years to come, as it takes Sunkist into more international markets. The company recently bought a plant in Thailand. It should be up and running in about a year, dropping prices to the point where Rowland said, “Now I’ll only be two or three times more expensive than the competition.”
Myerson, meanwhile, is thinking about trips to take with his wife, Barbara. They’re looking at India and Africa.
“In fairness to the family, I felt it was time,” he said of retiring. “I’ve been married 54 years and not devoted much time to these things.”
He’ll miss opening the mail the most. He said, “That’s one of the ways you really know what’s going on. You know who’s suing you, who’s unhappy, who’s paying their bills and not paying their bills ”
He’s not going to retire completely. He’ll still be at Wine Warehouse a few days a week for a few hours at a time to check the mail and read the invoices.
“Just to keep the pulse of the business,” he said. “I’ll go in for awhile and do whatever I feel like and when I feel like it, I’ll go home. I won’t have a schedule like I do here.”
