Sweet Success

The company that Kansas-born Louis L. Ward took over in 1960 was pretty much of a hand-to-mouth business--a predicament even for a candymaker. It was doubly embarrassing because Russell Stover Candies, Inc., happened to be one of the U.S.'s biggest manufacturers, wholesalers and retailers of quality chocolates. As president and chairman, however, Ward, 46, has worked wonders. Profits have increased by over 500%, and last week Ward announced record six-month earnings of $3,600,000 on sales of $26.7 million.

Ward intends to double those figures within five years. "We can do it," he says. "The market is there." And he would seem to be right; Americans, gobbling up some 3.5 billion lbs. a year (better than 18 Ibs. a person), have made candy a $1.5 billion-a-year industry. To tap that kind of volume profitably, Kansas City-based Russell Stover Candies had to overcome a history of financial fitfulness that began with the company's founder.

Eskimo Pie. Russell Stover himself was an lowan who took up candymaking almost as a hobby. In Omaha in 1922, he teamed up with a man named Christian Nelson to concoct a chocolate-covered ice-cream bar that became famous as Eskimo Pie. Stover and Nelson were rich within six months but soon got bogged down in a series of costly patent suits. After a falling out with Nelson, Stover started anew in Denver, began producing "Mrs. Stover's Bungalow Candies" with his wife Clara. So popular were his hand-dipped chocolates that Stover opened up five retail outlets in little more than a year. Soon he had a nationwide business on his hands.

Trouble was, the skilled candymaker was a lamentable businessman. He found himself with three factories--in Kansas City, Mo., Lincoln, Neb., and Denver. The three not only failed to coordinate but often engaged in costly competition among themselves. Stover finally sold out in 1943 to 26 of his employees. It may or may not be pertinent that 19 of them were women. In any case, the partners usually required a fulldress conference in order to arrive at the most routine sort of decision. Stover Candies made money, but not much.

Same Old Ways. Lou Ward was a Kansas City carton manufacturer making Stover candy boxes when he recognized Stover's potential. He raised $7,500,000 to buy out the partners. Keeping control of 47 1/2% of the stock himself. Ward got out of debt in three years, meanwhile consolidating Stover operations, increasing the sales force, and gradually raising prices until a standard 1-lb. box of assorted chocolates now costs $1.70 (v. $1.40 in 1960). Ward has quadrupled the number of Stover retail outlets to 348; the company also wholesales to 5,150 drug and department stores.

Only in the kitchen has the company stuck to Russell Stover's old ways. It still sweetens with much more pure chocolate than sugar, uses no artificial flavorings and, despite the added cost, insists on hand-dipping its chocolates. After all, says Ward, candy buyers "are much more quality conscious than ever before. They have more money to spend." Evidently. In the fall Ward will open new candymaking plants in Virginia and South Carolina.

This file is automatically generated by a robot program, so reader's discretion is required.