Standard Candy Company Inc.

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Standard Candy Company Inc.

715 Massman Drive
Nashville, Tennessee 37210
U.S.A.
Telephone: (615) 889-6360
Web site: http://www.googoo.com

Private Company
Incorporated: 1907
Employees: 250
Sales: $53.3 million (2005 est.)
NAIC: 311330 Confectionery Manufacturing from Purchased Chocolate

Based in Nashville, Tennessee, the Standard Candy Company Inc. is best known for its Goo Goo Cluster candy bar, an irregular-shaped mound of caramel, nuts, and marshmallow covered in chocolate. Traditional Goo Goos are made with peanuts, while Goo Goo Supremes rely on pecans. A new version, Peanut Butter Goo Goo incorporates peanut butter instead of nuts. A favorite in southern states, and long-time sponsor of Nashville’s Grand Ole Opry radio program, Goo Goos have not traveled far beyond their regional market, but through Standard Candy’s web site transplanted southerners and other admirers are able to procure them in six packs, bucketfuls, or in bulk (288 Goo Goos for $129), giving the company a global reach.

Standard Candy’s other major product lines are pecan log rolls, sold under the Cumberland Ridge Nut Roll Label; chocolate or vanilla coconut waves; and a pair of items cobranded with Cinnabon: Cinnabon Cinnamon Caramel Pecan Clusters and Cinnabon Cinnamon Pecan Roll. A lesser product is ABC Fruit Chomps, a fruit chew candy. The company also sells corporate gift baskets that include Goo Goos and other items. In addition to producing its own confections, Standard Candy does a good deal of contract work, producing name brand and private-label candy bars and meal replacement bars to make greater use of its production capacity. Goo Goos, in fact, are in production only about ten days each month.

NASHVILLE ORIGINS

Standard Candy’s founder, Howell H. Campbell, Sr., was born in Nashville in 1883. After receiving a public school education in the city, Campbell worked just two years as a shipping clerk for Hooper Grocery Company before striking out on his own. In 1901 the 19-year-old launched Anchor Candy Company with a handful of employees and a pair of copper kettles, setting up shop at a small site at Clark Street and First Avenue North. He reorganized the business in 1903 and adopted the Standard Candy Company name.

At first Standard Candy produced Nujoy hard and bag candies, lollipops, marshmallows, and Belle Camp fine chocolates. It was not until 1912 that the company developed what would become its signature product. In that year Campbell and his plant manager, Porter Moore, concocted the world’s first multi-ingredient candy bar, a glob of caramel, marshmallow, and roasted peanuts hand-dipped in chocolate. It was Moore who took particular care that the new confection relied on the freshest ingredients and a blended chocolate covering, the combination creating a taste that had to please his own reportedly discriminating palate. When Campbell and Moore were satisfied, the confection began to be sold unwrapped out of Nashville drug store candy counters. (Later they would be hand wrapped in tinfoil.)

The produced proved an overnight sensation, but customers and merchants alike did not know what to call it. Unable to decide on a suitable name, according to company lore, Campbell sought ideas from everyone. One morning while taking the streetcar to work he was telling the usual crowd of riders that his infant son had uttered his first words: goo-goo. A schoolteacher overheard and suggested that Campbell had stumbled upon the name for his new confection: Goo Goo. After all, as the company became fond of saying, people will ask for it from birth.

Whether the origins of the name are apocryphal or not, Goo Goo was a memorable name and in a sense described the gooey confection. It was the combination of tastes and textures of the Goo Goo Cluster, however, that drove its popularity. It was also a candy bulky enough to curb an appetite, perhaps influencing the marketing slogan that Campbell developed: “A Nourishing Lunch for a Nickel!”

In 1914 Standard Candy suffered a fire and used the opportunity to move to a larger facility to support the growing demand for the Goo Goo Cluster and the company’s other confections. Operations moved to a three-story building on Second Avenue North in Nashville. Here it would remain until 1979.

Howell H. Campbell, Jr., followed in his father’s footsteps. After World War II he took over another Nashville candy manufacturer, Huggins Candy Company. It was known for its Baby Buntin’ candy and King Leo stick candy that came in peppermint, lemon, and clove flavors. Eventually he took over Standard Candy as well and combined the operations to become Nashville’s largest candy manufacturer.

SPONSORING GRAND OLE OPRY: 1969

In 1969, Standard Candy began advertising Goo Goo Clusters as a sponsor of the Grand Ole Opry radio program, establishing a long-term relationship with the program. The two became so tied together that in the minds of some listeners Goo Goo had to have been derived from the initials of the words Grand Ole Opry. Regardless, the radio sponsorship spread the fame of the Nashville treat to all corners of the South, helping to make it into “the South’s Favorite Candy,” according to the labeling that adorned the product.

As Campbell, Jr., approached retirement age his son, Howell H. Campbell III, showed no interest in carrying on the family business. Thus, in 1974 Campbell, Jr., sold the company his father had founded to a pair of area businessmen, James Fischer and James Miller, for $1 million. By this stage Standard Candy’s annual sales had stalled around $2.5 million. Long after other candy companies had turned to food brokers to place their products with retailers, Standard Candy continued to maintain a 21-person sales force that basically peddled the Goo Goo Clusters and other candies out of the trunks of their cars. Miller took over as chief executive officer and let go of the old-fashioned system. With food brokers pushing the candy lines, Standard enjoyed sales growth of about 5 percent from 1974 to 1979.

In order to accommodate further growth, Standard Candy abandoned its out-of-date plant and moved into a new 6,000-square-foot facility on Massman Drive on Nashville’s outskirts. Management’s timing was unfortunate, however. The transition proved more time consuming and costly than projected, forcing Standard Candy to take on debt just as interest rates began to soar. The company also lost valuable production time during the most crucial time of the year for selling candy, late summer and early autumn. To make matters worse the South was hit with a blistering drought in the summer of 1980 that crippled the peanut crop and resulted in fivefold price increases, from 30 cents a pound to $1.50. Standard Candy lost $400,000 in 1980, and continue to post losses the next two years. The bankers that held the debt that Standard Candy had taken on were pressuring the owners to make changes or bring in new management.

COMPANY PERSPECTIVES

In 1912, in a copper kettle at the Standard Candy Company at Clark & First Avenue in Nashville, TN, the world’s first ever combination candy bar was invented.

It was during this time that James W. Spradley, Jr., became involved with Standard Candy. After graduating from the University of Chicago with a master’s of business administration (MBA) in 1980, Spradley went to work as a manager for a real estate syndicator in Nashville. He was interested in working with a small company where he could put his MBA to full use. Upon learning about Standard Candy, he applied for a job there only to find that the company was struggling, on the verge of bankruptcy, and had no position for him.

If anything, Standard Candy further piqued his interest. Spradley was not unfamiliar with the candy business. Now in retirement, his father, James W. Spradley, Sr., was the former president of Stuckey’s Inc., the Atlanta-based chain of highway stops and candy manufacturer. Before that, he and a partner had also started a candy company that, like Standard Candy, was highly dependent on a single product, the pecan twirl. The younger Spradley convinced his father to come out of retirement. They met with Fischer and Miller and after months of negotiations Spradley, Sr., bought out Miller in 1982. With Fischer staying on as a silent partner, Spradley, Sr., ran Standard Candy while grooming his son to take over. A few months later, the younger Spradley was awarded a 10 percent stake and was named president, taking over for his father.

Spradley, Jr., was not about to tinker with the manufacturing process at Standard Candy, an area in which he knew he lacked expertise. Rather, he focused on marketing the company’s signature product. By giving discounts to retailers and incentives to brokers, and making countless phone calls to current and potential customers, he was able to quickly increase the distribution of Goo Goo Clusters well beyond the 200-mile circle surrounding Nashville that had represented the product’s market parameters.

GOO GOO SUPREME INTRODUCED: 1982

The price of peanuts finally settled around 50 cents a pound, and Standard Candy was able to get out from under the debt that had jeopardized the company’s future. In 1982 the company also introduced a new Goo Goo variety that was not dependent on peanuts, the Goo Goo Supreme, which used pecans. Although it cost 50 cents instead of the 35 cents charged for a regular Goo Goo, it quickly found a following. Just six months after its release, the Goo Goo Supreme accounted for 20 percent of the company’s sales. Standard Candy also licensed the Goo Goo Cluster name to an Illinois ice cream manufacturer, Fantasy Flavors Inc., which in 1983 began offering Goo Goo Cluster Ice Cream. With these new sources of revenues added to the mix, Standard Candy increased sales to $7.5 million in 1984.

Spradley believed that Goo Goo had the potential to break out of the regional category and become a truly national product, and he began taking steps to make this vision a reality. He contracted brokers in such cities as Kansas City, Baltimore, Pittsburgh, Cleveland, Detroit, and Washington, D.C., hoping that the brokers would in turn persuade wholesalers to pitch Goo Goos to their supermarket and other retail accounts. He also added another production facility in 1985 by acquiring the Stuckey’s Candy Company factory located in Eastman, Georgia. Moreover, Standard Candy picked up another product in that transaction, the pecan roll.

Establishing a national candy bar was no easy trick, however. The field was dominated by a pair of giants, M&M/Mars and Hershey Chocolate Company, which between them manufactured all of the top ten selling candy bars in the United States and almost all of the top 20 with a combined market share of 70 percent. Standard Candy was simply too small to compete, and in the 1990s its national aspirations for Goo Goo Cluster petered out. The company became content with its regional status—and cultlike following for its star confection.

KEY DATES

1901:: Howell H. Campbell, Sr., starts the Anchor Candy Company.
1903:: Anchor Candy becomes Standard Candy Company.
1912:: Goo Goo Cluster is introduced.
1969:: Goo Goo becomes a Grand Ole Opry sponsor.
1974:: The Campbell family sells the company.
1982:: James W. Spradley, Jr., becomes president.
1993:: The Peanut Butter Goo Goo is introduced.
2005:: Cinnabon branded products are introduced.

In the 1990s Standard Candy continued to make the King Leo stick candy, but the line was eventually sold to a California company. An attempt was made in the early 1990s to become involved in boxed chocolates through the relaunch of the Belle-Camp line, but it too failed to pan out. Standard Candy had better success with a new Goo Goo variety, introduced in January 1993, that replaced the marshmallows and caramel with peanut butter. Along with pecan rolls, the company also enjoyed success with another long-time product, Coconut Haystacks, coconut-covered chocolate shreds that later took the name Coconut Waves. These two candy lines and the Goo Goo varieties formed the core of Standard Candy’s product offerings. Later in the 1990s Standard Candy introduced ABC Fruit Chomps, a fruit chew fortified with vitamins. An increasingly important source of revenue, however, accounting for about 40 percent of the estimated $33 million the company generated in 1994, was the contract work Standard Candy performed for fund-raising groups, discount retail chains, and a vending machine company.

In the mid-1990s Fischer sold his stake in Standard Candy when the Spradley family and the company’s workers through an employee stock ownership plan bought a 100 percent interest. As the company entered the new century it grew comfortable with its place as a regional company, although it was able to extend its reach considerably through Internet sales. The company continued to look for new products during this time. In 2002 it launched the Good 4 U Meal In Motion meal replacement bars, and in 2005 it unveiled a pair of products cobranded with Cinnabon Inc., Cinnabon Pecan Clusters and Cinnabon Pecan Rolls, which would be distributed to hundreds of Cinnabon bakeries around the country as well as supermarkets, drug stores, and other retail channels.

Ed Dinger