Favorite Brands: born to acquire

Prepared Foods, April, 1997

The Lincolnshire, Ill.-based company was formed in late 1995 to acquire the branded marshmallow, caramel, peanut brittle and dinner mints business from Kraft Foods, a subsidiary of Philip Morris. Kraft caramels have consistently been No. 1 at retail with a current 50% share.

That deal was just the precursor. In 1996 and continuing into this year, Favorite Brands snapped up Sathers Inc. and Farley Foods, both general line candy manufacturers, then acquired Dae Julie Inc. to bring its annual sales to more than $750 million.

Wait - there's more. Favorite followed that up by acquiring Trolli Inc., a manufacturer of gummie candies that is headquartered in Plantation, Fla. Trolli, with sales estimated to be about $60 million, has a manufacturing plant in Creston, Iowa, that's said to be the biggest in the country to produce gummies.

Just in time for summer, Favorite Brands International began shipping April 1 two new pre-packaged display shippers featuring Kraft[R] Original Jet-Puffed Marshmallows and StarMallows[TM].

Al Bono, president and CEO, explained that Favorite Brands "saw obvious opportunities to increase marshmallow and caramel sales at both the retail and ingredient levels." Bono anticipates significant growth for Favorite Brands through 2000, with - surprise - acquisitions as a key vehicle.