John Resnick: Ross, please give us an overview of Just Born.
Ross Born: My grandfather, who was an immigrant from Russia, came to this country through Paris, where he had learned the candy trade. And he set up a small shop in New York and he produced some candy in the back room. He decided to focus not on retail but on manufacturing. In 1923 he started Just Born Inc. And two years later he asked his one brother-in-law to come in and in 1926 he asked his second brother-in-law to come into the business. They were operating out of a loft in Brooklyn.
JR: Eventually they ended up moving to Bethlehem, Pa. Correct?
RB: Yes, there was a factory that had been vacant. My grandfather and his two brothers-in-law were able to save up enough to put a down payment on the building in 1932 at auction.
JR: And part of the growth was not only growing organically but through acquisition.
RB: We have several brands that we really treasure. The oldest brand is Mike ’n’ Ike [from] 1940. And the in 1950 Hot Tamales were created. And then in 1953 there was a purchase…. In Lancaster [Pa.] there was a company that was making chocolate hollow mold products primarily for Easter. And they made jelly beans. And in the back room they were making a marshmallow novelty by hand called Peeps. It wasn’t really a very big item. My grandfather and his two brothers-in-law and, by that time, my father was in the business—the four of them acted as clever entrepreneurs. They saw that this was something that no one else was making.
Career trajectory
JR: When did you really know that you wanted a career in the family business?
RB: I had no intention of going into the family business until after my second year of law school. I hadn’t really been in the business world. I had done a few stints over some summers at the business, just something to keep me going. It was after only about six months or so, when I was working with my cousin David [Shaffer], that it became very intriguing to me. I was going to give it three years and now this is our 30th year working together. But I only went into the business because the business was going to be sold if we hadn’t come into the business.
David and I joined in 1978…. We are the same age. In 1983 we took over the active management of the business.
JR: How do you work together and avoid conflicts?
RB: Well, we are cousins and we didn’t really grow up together, but we started growing in the business together. We have pretty much the same track record in terms of years of service. However, I have five days’ seniority, which I continue to remind him about.
We have different personalities but the same values. And the business is all-important to us. The business is bigger than the two of us. We both believe that, and that is a good thing. We care about community; we care about our people. And that is how we get along. We are like brothers in the business, not cousins.
JR: It wasn’t too many years ago that you and David came to the conclusion that you needed some fresh ideas, some fresh blood, and you brought in an outside, non-family member president, Sam Torrence. What has he done to change or enhance the business?
RB: Sam has been with us for almost six years. We met him, interestingly enough, when he and his wife were chairing our United Way campaign for the community and he was addressing our associates…. David and I maintained our position as co-presidents but we brought Sam in as chief operating officer and executive vice president. It only took one year and he was promoted to president—the first non-family president that we had.
What we were looking to do is professionalize our management. David and I recognized that there were management skills that we lacked and that in order for us to get not only to the next level but to any further level in our business, we needed to professionalize and proceduralize the things that we were doing. We needed someone to help us manage to get where we wanted to be. I believe we have become better managers because of Sam and better leaders because of Sam.
Sam has decided to retire in June. And we have just promoted our vice president for customer and brand development, Matt Petronio, who has been doing an outstanding job building our brands and developing people. We believe that he will be a wonderful COO and executive vice president. Sam is going to retain the presidency, and when he retires then David and I will be looking at the transition.
Learning from a mistake
JR: When you acquired Goldenberg Peanut Chews, how difficult was it to adapt their long-established culture to the Just Born family business culture?
RB: The Goldenberg Candy Company started in 1890. It was a fourth-generation company when we bought it, about four and a half years ago. We knew the Goldenberg family for generations. They were good friends. And we saw a family business that was running a quality shop —that cared about its brand and cared about its people. And it was on that basis that we went ahead and made the deal. It wasn’t buying a brand; it was buying a company. Their family name was on the brand. And they were very famous in the region for making Peanut Chews.
When we made the decision to acquire the business, it was to enhance the distribution and go national. We did a lot of consumer work, focus-group work. We looked at the brand attributes. We did a whole brand study and came to the conclusion that having the name of any family on the business or the name of a person on the package was really, today, an anachronism. In fact, back in the late ’80s we took the name Just Born off of our package, not because we weren’t proud of it but because it was confusing. We wanted people to buy Mike ’n’ Ike. We wanted people to buy Hot Tamales. It didn’t really make any difference that they knew that Just Born manufactured it or not. So we were very deliberate in how we went about changing the brand to Peanut Chew from Goldenberg’s Peanut Chew.
Now, what we didn’t understand is the iconic status of Goldenberg Peanut Chews in the Philadelphia metropolitan area. And the wrath that we received from consumers who said that they couldn’t find the Peanut Chew when we were marketing it “Peanut Chew.” We changed the package to contemporize the package. We did all the things that we thought would work for Des Moines and for San Francisco, [where consumers] had never seen a Goldenberg’s Peanut Chew. And we didn’t realize that it was going to be so difficult to go national with a brand.
JR: And you risked your core base.
RB: We not only risked it; we lost some of our core base. We actually lost ground….
We learned a lot more about brand development. Branding has to be earned, and there is a way to develop a brand. It doesn’t happen overnight. We didn’t lay enough of the groundwork.
The next generation
JR: What about the next generation?
RB: Both David and I have two kids each. They are actually not kids; they are young adults. And they are professionals in one sense or another, although David’s daughter just started college.
Certainly, if our children had an interest in the business, that would be just wonderful. They will need to make their own decision. But I can assure you of one thing. Our children, collectively and individually, understand that our business is a good business…. It is fulfilling and it is really providing a service. We are a quality employer of choice to almost 600 associates. A lot of folks rely on us in the community and our stakeholders. So we have bigger responsibilities. Our children know that. And our children have experienced our good feelings about the business.
I often wonder when folks have a family business and the parents come home and they complain about their day, why in the world would they think that their kids would want to go into a business like that?
John Resnick is the creator and host of the radio program “Legends of Success,” which is syndicated on more than 80 affiliates and 58 digital cable television systems (audio channels) nationwide (www.legendsofsuccess.com). He is also a business succession and estate planner with Resnick Associates, a second-generation firm with offices in Harrisburg, Pa., and Overland Park, Kan.