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Wagers Inc. (Idaho Candy Company)

Wagers Inc. (Idaho Candy Company)

3494 South TK Avenue
Boise, Idaho 83705-5278
U.S.A.
Telephone: (208) 342-5308
Fax: (208) 384-5310
Web site: http://www.idahospud.com

Private Company
Incorporated:
1901
Employees: 37
Sales: $34.5 million (2005 est.)
NAIC: 311320 Chocolate and Confectionery Manufacturing from Cacao Beans

Wagers Inc., which does business as The Idaho Candy Company, is perhaps best known for its original candy bar called the Idaho Spud, a dark chocolate bar with a marshmallow center, sprinkled with coconut and shaped like a potato. Another popular product is Owyhee Butter Toffee, handmade with all natural ingredients and available in three different varieties. Two other original Idaho Candy Company bars are also still in production: the Old Faithful bar and the Cherry Cocktail. In addition to its manufacturing operations, the company also acts as a wholesaler of more than 9,000 other products, including candies, drinks, food items, tobacco, cleaning supplies, popcorn poppers, ice shavers, cotton candy machines, and sundries, which it delivers throughout southwest Idaho and eastern Oregon. Idaho Candy operates under the corporate structure of Wagers Inc., formed by the Wagers family who have run Idaho Candy since 1984.

A CANDYMAKER BECOMES ONE OF THE NATIONS TOP CONFECTIONERS

Thomas O. Smith started making candies in the late 1800s, shortly after leaving home in Salt Lake City at age 17. He served as an apprentice confectioner in several cities and then returned to Salt Lake where he became a journeyman worker at the McDonalds Candy Company. In 1900, he moved to Boise, Idaho, with his new wife. After trying his hand unsuccessfully at farming, as a railroad fireman, and as a construction crewman, he began making candy in his home in 1901. By 1904, with financial help from several friends, he started his own business. According to his daughter in a 1981 Idaho Statesman article, he chocolate-dipped his confections in the basement where it was coolest and used shoe boxes for display cases as he sold his candies door to door.

Smiths business soon outgrew his home, so he built a small work place at the rear of his lot and rented part of a nearby building for his candy shipping department. By 1909, the company had grown sufficiently that it needed a larger permanent home. That same year, entrepreneur Charles F. Adams came to Boise, and he and Smith formed a partnership. They built a modern factory at 412 South 8th Street with Smith as president and Adams as secretary and manager. The facility had the latest conveniences for its time, including skylights, copper pots, a steam-powered elevator, and a welfare room, or cafeteria, for its employees.

Smith was a real visionary in the candy world, according to John Wagers, as quoted in CandyFreak. He invented more than 100 different candies in his lifetime. His daughter described him as having a natural taste, adding, that he could make anything. Christmas candies with tiny flags and flowers inside them were a holiday specialty. He used only the best ingredients and he supervised all the operations. The company products at this time consisted mainly of locally distributed candy bars and hand-dipped boxed chocolates.

Smith also reportedly had excellent rapport with his employees, many of whom were young women who joined the company as apprentices and stayed for years. Smith also hired teenage boys to handle the many chores necessary in running the factory, and he maintained a crew of traveling salesmen who covered their territories by train.

By 1918, the year in which the Idaho Candy Companys records begin, it was among the top 20 candy companies in the United States, reporting annual sales of $255,000, or roughly $25 million by early 21st century standards. The company provided candy for the state of Idaho and beyond. Yet the family-run and community-based business kept up a tradition of tossing out free candy bars to kids who knocked on the windows of its factory on their way home from school.

In 1918, the Idaho Candy Company introduced what was to become its signature candy bar, the Idaho Spud, a potato-shaped marshmallow filling coated in chocolate and rolled in coconut. The Spuds marshmallow interior was composed of sugar, corn syrup, egg whites, salt, and a seaweed derivative called agar agar, which gave it a particular density. It was flavored with maple, vanilla, and dark cocoa. During the Great Depression era, according to company president Dave Wagers in CandyFreak, the Spud was actually billed as the healthful candy bar because of the agar agar.

In the beginning, the Idaho Spud consisted of two marshmallow centers with a chocolate layer in-between to resemble an actual potato. The original Spuds also were hand-rolled in coconut before cooling. Later, in about 1970, the Idaho Candy Company acquired what was probably the only coconut depositor in operation in the United States, and the process of coconut coating the Spuds became automated. The introduction of the depositor coincided with the change to one marshmallow center to increase production.

The 1920s saw the introduction of two more candy bars for which the Idaho Candy Company became known as well: the Old Faithful in 1925 and, in 1926, the Cherry Cocktail bar. These candies became the companys core products and changed little over the years.

EXPANSION AND DIVERSIFICATION AS A SNACK FOOD DISTRIBUTOR

The 1930s and 1940s brought challenging times to the Idaho Candy Company. Following the Depression, there was the rise of the national candy giants. When Smith went blind at the age of 50, he retired from active participation in the company, and Adams took over as president of the business. Smith still maintained an interest in the business until his death in 1954. The company passed from Adams to his children and then to Don Wakeman, son of a longtime plant supervisor, in 1966. Wakeman had initially joined the company in 1937 stocking shelves. Later he worked at Gillette before returning to purchase the Idaho Candy with his partner, Nif Sullivan.

Even after an unsuccessful effort in the 1960s to take the Idaho Spud national, the popularity of the potato-shaped bar continued regionally. Wakeman led the company in an expansion effort, increasing sales in existing markets as well as moving slowly into the western states beyond Idaho. In 1971, the candy industry ranked the Spud the 30th most popular ten-cent bar in the United States. By 1976, the Spud ranked 17th among 15-cent bars. The Spud was distributed in 20 states, having expanded into four states in the preceding five years.

COMPANY PERSPECTIVES

Idaho Candy Company strives to grow its nostalgic candy brands, maintain its position in the Idaho community and service its wholesale customers with the products and services they need to make their businesses profitable.

Beginning in the 1970s, diversity proved a life saver for the small candy company and enabled it to survive the industry setbacks of the mid-1970s. We had such disastrous increases in 1974 in the cost of all ingredients some companies went bankrupt, according to Don Wakeman in the Idaho Statesman in 1976. Except for chocolate, costs leveled off in the next few years, but the company had to stop manufacturing some of its more expensive-to-produce candies, such as its hand-dipped boxed chocolates. By the 1980s, the distribution side of the business was thriving, and by 2004, the company had more than 9,000 items in the warehouse, which the company sold to approximately 800 different supermarkets and convenience stores.

19842006: CONTINUING A FAMILY TRADITION

In 1984, Wakeman sold the business to John Wagers, a gregarious former accountant in semiretirement from his own practice. When a friend approached him about purchasing the Idaho Candy Company and an associated snack distribution business, he hesitated only briefly before taking him up on the offer. Being the head of a manufacturing concern was tempting, especially one as steeped in history as the Idaho Candy Company.

By the late 1980s, the company, with a permanent staff of 14 was still manufacturing many of Smiths original confections. Moreover, much of the machinery in the factory was still the original equipment; some of it predated the building that Smith and Adams had built in 1909. The almond grinder, for example, still employed a system of leather belts and wooden pulleys.

Although the Idaho Candy Company was by then producing three million Spuds a year, the potato-shaped candy was still largely a specialty item sold to Idahoans and to tourists who visited the companys facilities and at the airport. One-third of all Spuds produced were sold during holiday season, a large portion of these by mail order. During this time, the Idaho Spud actually developed an international following and was featured in recipes posted on the box in which it was packaged and shipped. There was the Idaho Spud Mousse in a Mold from France, the Neapolitan Spud Cake from Italy, the Chocolate Cream Spud Pie from Bavaria, and the Idaho Spud Fondue from Switzerland.

Wagers planned to keep everything just as it was when he took over the business, but after 30 years of operation, the wholesale side of his company needed more space. Shipped locally were several lines of candy, including Boston baked beans, French burnt peanuts, horehound candy, lemon drops, cinnamon imperials, peco flakes, chocolate peanut clusters, and peanut brittle. Idaho Spud Bars, Cherry Cocktail Bars, Old Faithful Bars, and Owyhee Butter Toffee were shipped to ten western states. So in 1988, the company constructed a new warehouse and distribution facility on three acres of land at a cost of about $800,000. The new building comprised 28,000 square feet of space, an increase of 12,000 square feet from the companys 30-year-old former warehouse, allowing for an increase of 400 to 500 new lines of items for distribution and also allowing the company to meet the differing needs of drugstores, convenience stores, and large grocery stores. We have higher ceilings, no more basement, and a great loading dock, announced Wagers in a 1988 Idaho Business Review article.

Other changes occurred naturally in management. When his plant manager decided to retire in 1991, Wagers sent out a call to his three sons, hoping one of them would decide to fill the position and eventually take over the company when Wagers himself retired. Wagers two older sons were already established in careers, but Dave Wagers, his youngest, chose to take a pay cut and come on board. Wagers, like his father, had an accounting background. After graduation from the University of Idaho, he had worked for Electronic Data Systems in Washington, D. C., and by his mid-20s was rapidly climbing the corporate ladder.

It was a hard decision. I went from a high-tech, progressive company to one thats definitely low-tech and old style, he explained in a 1998 Idaho Statesman article. He continued: When I first started at the factory, it was the worst thing in the world. At 26, I was the youngest guy in the plant. People who had been there 20 and 30 years looked at this young guy in a suit and tie and thought, Were dead. The young Wagers had to endure being called B.S., the initials for Bosss Son, and had to adjust to working full time with his father.

KEY DATES

1901:
Thomas O. Smith founds the company.
1909:
Smith builds a modern factory for his company.
1918:
The Idaho Candy Company introduces the Idaho Spud.
1966:
Don Wakeman becomes president of the company.
1984:
John Wagers purchases the Idaho Candy Company.
1988:
The company builds a new warehouse for expanding into new lines for distribution.
1991:
Dave Wagers joins the company.
2001:
Dave Wagers becomes president of the company.

However, he soon found that he liked the job. As he explained in CandyFreak: the breadth of it. I have to handle everything. Marketing, production, distribution, sales. I dont have some big staff to testmarket this or that. When I want to try something new, I go ask my friends what they think. Its very seat-of-the-pants. Over time, the business suit disappeared and Wagers, who became company president in 2001, came to work dressed in jeans. His office contained a desk and chair that were seldom used. In one corner of that room stood the old company safe, which served as his closet.

Dave Wagers, like John Wagers, also appreciated the historic and community-based aspects of the Idaho Candy Company. The company advertised by giving away Idaho Spuds to be thrown out at local basketball and football games and also participated in parades, throwing candy from the back of the companys 1929 Ford Model A delivery truck. Around 2000, when the company needed new molds for the Spud, Wagers arranged to have these made by local high school shop students. New products, like the Spud Bite and the chocolate-covered potato chip came on board gradually and had to pass muster by friends of the family. Chocolate-covered Owyhee Butter Toffee debuted in 2002 and was well-received.

Also during this time three food television network shows, Unwrapped, Food Finds, and The Secret Life Of , featured the Idaho Candy Company, and the visibility created surges of business. Then in 2004, author Steve Almond devoted a chapter in his book Candy-Freak, a tribute to and history of chocolate candy, to profiling Wagers and Idaho Candy Company. The company had to create a web site to handle the extra orders generated from the national publicity; staff had more sales than could be managed by telephone.

By 2005, Internet orders accounted for 10 percent of sales, and revenues were up 5 percent for each of the last three years. The wholesale portion of the business had grown to 32 employees and represented over 90 percent of the companys revenues. However, Wagers had no great ambition to modernize the factory, which remained at its original location and retained much of its original charm. In fact, the company, which was one of about ten similar small old candy companies still in operation in the United States, still employed a candy-cooling system composed of air hoses attached to the underside of a steel canopy.

Most of the companys candy business, handled by a full-time staff of 14 with an additional 23 seasonal employees, was still built on products introduced by founder Thomas O. Smith, although Wagers was considering adding a Huckleberry Cocktail bar to complement the Cherry Cocktail. The Spud, still the most widely known of the Idaho Candy Companys creations, sold at the rate of 3.5 million a year.

Carrie Rothburd

PRINCIPAL COMPETITORS

Nestlé S.A.; Hershey Company; Mars Inc.; Capitol Distributing Inc.

FURTHER READING

Allen, Anne Wallace, Potato-Shaped Candy Bars Are an Icon of Idaho, Idaho Statesman, December 19, 2005, p. 7.

Almond, Steve, CandyFreak: A Journey Through the Chocolate Underbelly of America, Chapel Hill, N.C.: Algonquin Books, 2004, pp. 201233.

Chung, Chris, Inheriting the Biz: For Idaho Candy Co. Succession Is a Long Tradition, Idaho Statesman, June 9, 1996, p. 2E.

Dobbs, Fred, Historic Idaho Candy: A Real Sweet Job for Flamboyant Owner, Idaho Business Review, April 28, 1986, p. 1.

Idaho Candy Warehouse Completed, Idaho Business Review, May 16, 1988, p. 5.

Jenkins, Mary, Sweet Memories: Pioneer Candy Maker Thomas Smith Had an Idea Thats Still Around Today, Idaho Statesman, February 15, 1981, p. 7B.

Loew, Tracy, New Center Helps Family Owned Businesses Stay That Way: Relatives Create Unique Problems, Idaho Statesman, November 8, 1998, p. 1D.

Monroe, Julie T., Candy Maker Survives Sour Times, Idaho Statesman, June 20, 1976, p. 8G.

Pewitt, Jana, Idaho Candy Opens Distribution Center, Idaho Statesman, June 18, 1988, p. 8B.

SBA Recognizes Idahos Wagers, U.S. Distribution Journal, July 15, 1991, p. 5.

Volkert, Lora, Two Boise Candy Manufacturers Expect a Good Year Despite Tougher Industry Conditions, Idaho Business Review, February 14, 2005.

Woodward, Tim, Idaho CandyTimeless, Idaho Statesman, December 21, 1989, p. C1.

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