Tootsie Roll, Inc.

Sharon Ungar Lane, Bentley College
Alan N. Hoffman, Bentley College

INTRODUCTION: “Tootsie Roll’s good fortunes are an accumulation of many small decisions that were probably made right plus bigger key decisions, such as acquisitions, that have been made right, and a lot of luck.” Mel Gordon, CEO – Tootsie Roll, 1993

Tootsie Roll Industries, Inc., a niche candy maker, has often been voted one of Forbes magazine’s “200 Best Small Companies of America.” A top quality producer and distributor of Tootsie Rolls and other candy, Tootsie Roll Industries maintains a 50% market share of the taffy and lollipop segment of the candy industry, and sales have increased each year for the past nineteen years. The world’s largest …show more content…

Despite recessionary economic conditions and reduced discretionary income, foreign consumers purchase U.S. higher value-added foods and beverages because U.S. products compare favorably with similar products made elsewhere, offering equal or better quality at a lower price. Today, the top five importers of U.S. products are: Japan, Canada, Mexico, South Korea, and the Netherlands. Foreign demand for U.S. produced higher value-added products (including candy) has increased since 1993, thanks primarily to the rapid growth of the middle class in developing and emerging nations, and growth in the new markets of the former Soviet bloc nations. However, the candy industry has recently faced several industry curbs. New nutritional labeling requirements were imposed by the Food and Drug Administration in 1990 to regulate serving size, health messages, and the use of descriptive terms such as “light” or “low fat.” The Federal Trade Commission also developed stringent sale-date requirements and strict guidelines for documenting environmental claims on packaging. These new regulations were imposed under costly, disruptive, difficult-to-meet deadlines, and posed a particular threat to many foreign food and beverage processors, who are not accustomed to such extensive product analysis and disclosure. For Tootsie Roll, this major