The mysterious company behind Tootsie Rolls

The maker of the famous candies likes to keep a low profile, but it may be an attractive buyout candidate in the consolidation-happy sweets industry.

By Kim Peterson Aug 23, 2012 4:47PM
You don't hear much about the company that makes Tootsie Rolls. And that's exactly the way executives want it.

Tootsie Roll Industries (TR) is steeped in history and has been run for 50 years by 92-year-old Melvin Gordon and his 80-year-old wife Ellen, The Wall Street Journal reports.

The 116-year-old company rarely gives tours and interviews and doesn't like quarterly earnings calls. The similarities to Willy Wonka are so strong that I wouldn't be surprised to see golden tickets packaged with Blow Pops one day.

Lifestyle network LX.TV did get a peek inside the Tootsie Roll factory in the following video:

Post continues below.
There are no analysts covering Tootsie Roll -- why bother when you can't get any information? -- so the company goes largely ignored even as it continues producing some of the country's most beloved candies, including Junior Mints, Sugar Babies, Dots, Sugar Daddy's and Charleston Chews.

Though investors can buy shares of Tootsie Roll Industries -- they're priced at about $25 -- the Gordons retain tight control over the company by owning class B stock, each of which is worth about 10 shareholder votes, the Journal reports. Tootsie Roll shares are trading at about where they were a year ago, after falling to under $22 this spring.

Tootsie Roll is falling on tough times, however. Profits are dropping -- by about 20% last year to a mere $43.9 million -- even though revenue rose 2% to $528.4 million, the Journal reports. Margins have been halved in the past decade to 11%.

But Tootsie Roll has accomplished an admirable feat: It nearly doubled revenue over the past 20 years without huge advertising budgets. The campaign it did spend money on long ago -- how many licks to the center of a Tootsie Pop -- continues to resonate.

It's unclear what the future holds for Tootsie Roll Industries, which started making candies in 1896 and went public in 1922. How long can Melvin Gordon continue to lead? Will any of the couple's four children take the reins (the Journal doesn't think so), and will Tootsie Roll continue to stay independent?

There has been intense consolidation in the candy business recently. Kraft Foods (KFT) bought Cadbury in 2010, and Hershey (HSY) is in buyout mode as it furthers its global expansion plans. Mars, a private company, bought Wrigley in 2008.

It's admirable to see Tootsie Roll still going strong, making candies in America and sticking to tradition. Here's hoping the Gordons can revive profits and set the company on course for another 116 years.

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102Comments
Aug 24, 2012 7:55AM
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Great company because of its' great owners AND employees.  Used to work there and it was one of the best jobs I've ever had.  Very clean, treated well and quite honestly it didn't seem like work.  Hard to have a bad day when you're surrounded by candy all day long.  Rumors have circulated of a buyout since the company started, guess one day they will come true, but for now can't we just leave well enough alone?  Continued success mr & mrs Gordon, you deserve it.  
P.s.  nothing better than a warm tootsie roll right off the line, a small piece of heaven.
Aug 24, 2012 6:31AM
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To Melvin and Ellen... thank you! Tootsie Rolls remain one of my all-time favorites no matter what my dentist says. There is nothing quite so good as a very fresh Tootsie Roll, like the kind you are handed in Chicago by a Fireman collecting donations for some cause. The fact that you have never caved in and sold out makes you my heroes. Thanks again, please don't let anyone change a thing.
Aug 24, 2012 1:21AM
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Many years ago when my grandmother was carrying my mother, she was addicted to Tootsie Rolls. That's all she ever wanted to eat was Tootsie Rolls. The year was 1929. My mother was named Catherine but her family nickname for her entire life was 'Toots' or Tootsie and my cousins called her 'Aunt Tootie.' Of course, to me, she was 'Mom,' and people outside of family members called her Kay and in later years, Cathy. But to our family, she was always some variation of 'Tootsie.' Mom was 'Toots/Tootsie' for 80 years! :-)

 

Thank you to all the Tootsie Roll makers, employees, and former employees for one of the better things in life that we just won't give up! And thank you for some great memories this news story brought to me tonight! :-)

 

RR

Aug 24, 2012 1:15AM
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I don't know if this was a mid-west thing, but does anyone else remember about the "urban myth" that if you got the wrapper of the indian shooting the star, but he had to be fully intact, you got a free tootsie pop? I must have believed that until the 4th grade.  Of course, it was perpetuated with the help of a nice elderly man that owned the local convenient store would always give us kids a free tootsie pop when we handed in the wrappers.  I know they were cheap back then.  You could get a sucker for .10 and a individual tootsie roll for a penny.  Still, when he closed up shop and retired, I was suddenly disappointed when I tried to "cash in" several wrappers around town.  Ahhhhh.. still, good times of an older age.

 

Dots are still my favorite.  I still eat them the same way when I was a kid.  Empty the box, sort out all the colors, eat the few stragglers and then pop in all 5 flavors at once.  Funny how that's never changed for me.

Aug 24, 2012 1:27AM
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There's not a kid under 90 years old who doesn't know Tootsie Roll!! Through the worst of times...the best of times the chocolate center of a Tootsie Pop is something every kid can still count on!!!
Aug 24, 2012 2:32PM
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The world looks mighty good to me, cause tootsie rolls are all I see, whatever it is I think I see becomes a tootsie roll to me, tootsie roll how I love your chocolatey chew, tootsie roll I think I am in love with you, whatever it is I think I see becomes a tootsie roll to me. Tootsie rolls have always been my favorite and I would sing that song all day long as a kid.
Aug 23, 2012 8:41PM
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Oh my gosh I want one of those giant tootsie roll logs. The one's they showed before they were broken down into all the little ones. I would just die and think I went to heaven. I love tootsie rolls. I'm 52 and have enjoyed them my entire life. When I was little my grandmother always had some in her blouse pocket for us children when we came to visit. She was very poor but always made the effort to have some for us when we came, and knowing how poor they were I'm sure it was a sacrafice for her to purchase them. Not that I'm saying they were expensive, but when you have almost nothing it is a struggle.
Aug 24, 2012 1:14AM
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Tootsie Rolls and Charleston Chews, it doesn't get  much better than that!

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When I was a kid , I got my 25 cents went to the movie for 9 cents , got a big toosie roll for 5 cents and a drink for 5 cents and pop corn for 5 cents and had a penny left to buy 2 mary janes . How time flys!!!!!!!!!!!!!!!!!

Aug 23, 2012 10:57PM
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When I was a Kid I used to wait on the President of Tootsie Pop and all of their Excectives every week at the Old Barn Restaurant on State Road in Burbank.  They always had the Surrey Room which was a small private room for their meetings. One comment though.  The presedint of Tootsie would tip me $2.00 on a $150 lunch.  They requested me every week but I always got stuck with the cheap tip. The Restraunt is now abandoned but living a few miles away from the company was always pretty cool.  There was a time when Craker Jack was also down the street on Cicero but that is long gone.  Good memories.  In 5th Grade we had to write a company and tell them we liked their product.  I was a hereo in the class because they mailed me 5 cases of candy that I shared with the school.  Ths one kind gesture always made me forgive the cheap tip. 
Aug 23, 2012 10:57PM
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i hope they don't sell out ,if a big comany buys them ,they will make them look more like crap and fill them with crap from china
Aug 23, 2012 7:06PM
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Hey author make up your mind is it 'falling on tough times' or is it 'still going strong.'
And thanks for that other jem... "It's unclear what the future holds..."

But if you want to speculate... when Mr. Gordon passes, and if none of his kids take over, some food/candy conglomerate will snatch it up for a song, move the factories over seas, change the formula, then shuttle the product when they don't see a 500% return on investment.
So my advice is when Mr. Gordon passes buy Tootsie Roll, not the stock, but the candy itself, because once greed gets a hold, it'll never be the same. (Thankfully it's mostly sugar so it should last for YEARS!)
  

Aug 23, 2012 6:55PM
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Tootsie roll are great eating. Hope they do not get bought out and ruined like some has.
Aug 24, 2012 12:31AM
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I used to work there, great company, awesome owners!!!!
Aug 23, 2012 9:40PM
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i sure hope kraft foods doesnt buy tootsie out .  
Aug 23, 2012 11:02PM
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How many licks in a tootsie pop? Everyone knows the answer is 3 : )
Aug 23, 2012 11:49PM
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After all these years, I must come clean.  I never counted the licks to the center of a Tootsie Roll Pop, because I couldn't resist the crunch of a few bites.  Time...to...go....buy....... more....forgive me.
Aug 23, 2012 7:55PM
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Thank goodness it is made in America.          Where is Brach candy corn made?
Aug 23, 2012 8:38PM
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Back in the 50's early 60's growing up in SE Iowa, we had a Sheriff by the name "Toots" Delahoyd.

When he saw you walking down main st. he would honk his horn and throw out Tootsie Rolls. Kids would run out to the street, etc. and grab them... I'm talking those big log looking ones.

I could see that happening now. LOL

 

Good times, good product

 

 .

Aug 24, 2012 10:03PM
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How many licks does it take to get to the center of a tootsie pop? A little over 700 if it's a cherry one. I sent them a letter telling them how many, and they sent me back a certificate for the accomplishment. Made my day some 40 years ago. :)
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