Stronger Than Steel: McKeesport Candy Co.

Written by Kelly Hayes Madden

Published by Distribution Channels Magazine, November 1996

Jon Prince's pager went off one recent Saturday evening, as he was eating dinner. The call was from a frantic fundraising customer wanting to know if the Reese's Peanut Butter Cups packs contained three or four cups.

"Now, is that important to me at 7 o'clock on a Saturday night?" asks Prince, vice president of McKeesport Candy Co., McKeesport PA. "Absolutely. Answering her question put her at ease so she didn't have to worry about it until Monday morning when our office opens."

Whether it's a large supermarket chain or a high school club, the most valuable product McKeesport Candy offers its customers is peace of mind. "In anything we do, the key is to be there fore the customer," Prince says. "I treat people the way I would want to be treated."

Easy to say, not always to do, but for McKeesport Candy, it's a skill perfected over nearly 70 years. The wholesaler's commitments to customer service as well as its careful development of niche markets are the two factors that have empowered this third-generation family business to outlast its hometown's once-mighty steel industry. The city of McKeesport, established in the late 18th century by Irishman John McKee, was defined for more than 100 years by its biggest employer, U.S. Steel. The "Tube City," as it was nicknamed, is still recovering from the closing of the National Works pipe plant in 1987.

Indeed, it takes a company that's stronger than steel to remain standing in an industry in which many small operations have fallen over the years. Jon's grandfather, Ernest Prince, founded the candy and tobacco distributorship in 1927. Today, the business still operates in the same three-story building on Fifth Avenue, now under the leadership of Jon's father Gerald "Jerry" Prince, president and owner.

Over the years, McKeesport Candy added paper products health and beauty care and other items to its candy and tobacco line. Eventually, however, the wholesale divested itself into those categories and returned to its roots. Removing itself from the competitive fray among full-line convenience product distributors, McKeesport now concentrates on what it does best - selling candy.

Confectionery's Their Bag

On the front of McKeesport's building in large letters is the word "candy," as if to emphasize the company's decision to specialize in this product category. Of the 2,000 SKU's McKeesport carries, at least 85 percent are confectionery. The remainder is mostly tobacco products. Candy accounts for 65 percent of company sales.

Because McKeesport services many supermarkets and candy shops, its product mix favors gourmet bulk and bagged candies. In fact, more than a quarter of the company's sales is bulk candy. McKeesport does, however, sell traditional count goods and a growing selection of kid's candies as well.

One of the wholesaler's best-selling items is Jelly Bellies gourmet jelly beans made by the Herman Goelitz Candy Co. of Fairfield, CA. McKeesport is Goelitz's master distributor in Western Pennsylvania. The company services towering 24-bing Jelly Bellies displays for many of its supermarket customers and helps set up new displays for accounts several times a year.

"We know what flavors sell best," says Tom Griffin, sales manager and candy buyer for McKeesport. "If the store has room for 24 flavors, we'll send them to the top 24. Then we'll go in and arrange the bins so the mix of candy colors is appealing."

McKeesport labels each bin with its company name and phone number, the product ingredients and reorder number, so stores can simply call if they run low before their sales rep's next visit.

Another leading line for McKeesport is its own private-label-bagged candy. The wholesaler has been bagging candy for 40 years under its Todd's brand. Why Todd's? No one is really sure.

"I have another son whose middle name is Todd and we used to own an apartment building on Todd Street," offers Jerry Prince. "One of those two is the right answer. Pick one."

"Lets go with the son "suggests Jon."

"Yeah, that sounds better," Tom chimes in.

Jerry adds, "It's just a nice regular name. Euphonious."

Whatever the name's origin, Todd's is a customer favorite. McKeesport even ships product to transplanted Pittsburghers who can't do without the local brand. The line presently includes about 200 items, some of which are seasonal. Chocolate licorice and spearmint leaves are two of the top movers.

The wholesaler adds items to the line regularly but is discriminating in its choices. "We go after the highest quality candies," Jerry says. "People that like good candy know the difference."

Several employees work in the rebagging operation, turning out up to 3000 bags a day. One worker, Iola Tenny, has bagged Todd's candy at McKeesport for 29 years. In fact everyone calls her "Todd."

McKeesport also bags candy in plain bags for customers that prefer them to the Todd's label and does some private labeling of holiday candy for large users. "At Halloween, we'll bag candy corn and put the store's name on the label, like 'Joe's Market - Home-Grown Corn," -- says Tom. "That gives the store a little identity."

The distributor labels all of its rebagged product with UPC codes and nutritional information. The new nutrition label law posed quite a challenge for McKeesport, says Jon. He and Tom spent much time tracking down the ingredients for every product, calling manufacturers and creating a database. "That's a lot of work for a small business," Jon says

Small often means resourceful. McKeesport has parlayed its bulk candy business into sales by the case, broken into 10-lb. Bags, rebagged for the Todd's line or private label, and in a new tub pack for fundraising sale.

Switching Gears

"Above all, the wholesaler must be willing to make adjustments. There are no blueprints for these changes and choices we must make - certainly none which will suit everyone. We cannot say one is the right choice for all."

- Earnest Prince, speaking as president of NCWA in his 1955 convention keynote address to the industry.

While other Candy and Tobacco wholesalers have changed their product mix to compete as full-line convenience product distributors, McKeesport Candy instead opted to specialize in candy and change the focus of its customer base. The company services few convenience stores; now the majority of its accounts are large supermarkets. In these stores, McKeesport mainly services the bulk candy displays.

Rounding out the wholesaler's retail customer base is an eclectic group of niche markets including small candy shops, department stores, card shops, bookstores, drugstores, military institutions, even a hardware store and a shoe store. McKeesport also has a thriving fundraising business, which Jon launched while still in college at Ohio University. He started selling candy to schools and organizations in the area eight years ago, though Jerry told him "We don't do that. That's not our business."

But Jon pushed forward, and since then, the fundraising base has grown to about several hundred accounts throughout McKeesport's distribution area. "It's growing nicely," Jerry reports today. "Its become another niche that we need to be competitive."

The fundraising business serves as a good example of the company's commitment, or even devotion to customer service. "It's our main focus, our passion," Jon says.

Like the woman concerned about the Reese's cup counts, customers can reach him 24 hours a day, seven days a week usi8ng a special pager software program the wholesaler provides. Accounts receive a disk to load on their computers that allows them to type messages to Jon. The messages then appear on his pager, so he can respond quickly.

"The fundraising business is 1 percent about selling the candy, says Jon. "They can buy the product anywhere. It's more about establishing trust. You're dealing with folks that, number one, aren't business people and, number two, don't know anything about buying. So, they have to feel comfortable with you."

The high comfort level, he says, is something everyone at McKeesport works hard to provide to its customers through services such as 24-hour support hotline, on-time delivery and support materials. "We try to dispel some of the mystery and educate people about what they are buying," Jon adds that many of his fundraising accounts have been buying from McKeesport for years, despite the fact that they're a customer type that traditionally has a high attrition rate and little loyalty to suppliers.

The company's attentiveness to customer needs has generated good word of mouth, which in turn acts as McKeesport's main source of new business, "And we get a lot of referrals," says Griffin.

Currently, the wholesaler offers fundraising products from three major manufacturers. This fall, however, McKeesport plans to introduce its own catalog sales program for fundraising accounts. The distributor once tried a manufacturer's catalog, or order-taker program, but was disappointed in the quality of the candy.

"So we decided to do it ourselves," says Jerry. "We're putting together a color brochure that will feature gift containers of our most popular bulk items. Which we normally haven't offered to our fundraising customers." McKeesport will label the containers with the organization's name.

Perhaps there's no bigger testament to the success of McKeesport's service-oriented approach than the 2-inch-thick folder of thank you letters the company has received from fundraising customers over the years. And one woman whose weekend was saved by a prompt phone call from Jon.

An Extended Candy Family

"I see new horizons of opportunity. I believe that working together we can develop the industry's full potential to the benefit of wholesaler, retailer, manufacturer and the consuming public."
- Ernest Prince, in his presidential keynote address, 1955 NCWA convention.

As in most small businesses, Jerry Jon and Tom and the rest of McKeesport's 22 employees wear many hats. "Everyone has to assume a lot of responsibility, so there are no rigid rules," Jon comments. He adds, laughing, "One day my father even fixed the elevator."

Says Jerry: "Sure, sometimes it'd be nice to have more people servicing and repairing and doing for you, but we operate very lean. Fortunately, I can fix anything."

More than a team, those that work at McKeesport Candy are like family. Most of them have been with the company for quite some time. In fact, the average length of employment is 20 years, says Jerry, he being the one with the most tenure. The elder Prince joined the family business in 1949. Tom has been with McKeesport for 24 years. One woman worked for the wholesale firm from its founding until she passed away in 1990, a 63-year run.

Walking through the warehouse, Jon asks everyone to tell how long they've been with McKeesport. One shouts, "17 years, next month," another offers, "18 years." Dorothy Ivkovich, who works in the rebagging department proudly announces "41 years. A long time in one spot, huh? All of us are like family."

Jon, who admits that at six years he's the third-newest person at the company, remarks, "This type of business, where people stay this long, probably won't exist in our children's generation. The longevity is something I really treasure."

Surviving a long bus trip together certainly qualifies folks as family. The company offered to take interested employees to the AWMA National Summer Convention & Exposition in Washington, DC, this past July, and eight went. For many, it was their first trip to the show and to the nation's capital. They were impressed, especially Dorothy, who got to put faces to the products she's handled for so many years.

As it has since its earliest days, the McKeesport Candy family is prepared to adapt to future changes in the distribution industry while maintaining its dedication to both the candy business and the business of providing the personal attention still valued by retailers today. "Our business is one of evolution, We will continue to look for new niche markets and high-quality, upscale confectionery," Jon concludes," "I hope we also can continue our tradition of customer service in a world becoming more impersonal."

This optimism echoes that of his grandfather more than 40 years earlier. Ernest Prince wrote in his president's Christmas message to the NCWA in 1955, "As for myself I am optimistic. The candy industry has been kind to most of us in the past, and I'm sure it will be good to us in the years ahead."

Indeed McKeesport Candy has earned that kindness and no doubt will be sweetening life in America's steel town for years to come.

Service Outside Traditional Boundaries

If you're ever driving through Pittsburgh, tune your radio to WDUQ. You might hear the voice of Jon Prince or Tom Griffin of McKeesport Candy Co. over the airwaves. Both are big fans of the public radio station, and they recorded commercials for its annual pledge drive this year.

"I hadn't known Jon had done one too, and one day I was driving along and suddenly, Jon was talking to me from the radio! It scared the heck outta me," Tom recalls. Griffin also heard his own commercial - well, part of it. It came on right as he entered one of Pittsburgh's many tunnels.

Prince and Griffin's commercials promoted WDUQ's Mug-a-month Club. Listeners who pledge $365 become members of the club, which entitles them to a monthly gift of a mug filled with candy - candy donated by McKeesport. Each month the company supplies a different type of candy for the mugs and in return, receives a little publicity.

"Of course we're in business, and business is about making a profit, but it's also about providing some service for the community," says Jon.

This spirit of community service is what won McKeesport first place in Candy Wholesaler's (now Distribution Channels) 1994 Community Service Awards. Tom Griffin has been involved organizing the annual Make-A-Wish Day for the past nine years. The May event treats Make-A-Wish families to a Pittsburgh Pirates baseball game and pre-game picnic party with live music, clowns, magicians and costumed characters.

Every year, McKeesport donates thousands of dollars of candy to fill goody bags for the families.

More than 2,000 people participated in this year's events, which Griffin started planning back in January. He also volunteers for the Make-A-Wish holiday fundraiser, passing out candy donated by McKeesport to donors at local malls. - KHM