On the way from LAX Airport to West Hollywood, where I like to stay when I am in Los Angeles, I always pass by the See’s Candies factory. I have always loved sweets, but I think that my interest in the confectionery sector began back in the day, when Archie Norman hired the best people from Mars into Asda. It was then that I met the ‘rock stars’ of FMCG. This year I decided to stop into the factory and see what I could learn from what I thought was a ‘mom and pop’ chocolate business – which sells the most moreish chocolate-covered peanut brittle I have ever tasted. What a surprise I had…
I first tried See’s chocolates many years ago, when my LA-born friend Michele brought me a box of the brand’s Toffee-ettes as a gift and told me the romantic story of the company’s history. In 1854, a woman called Mary Wiseman married a man called Alexander See. Together they ran a resort in Canada, but she was widowed at the age of 64 with three sons when her husband passed away. One of her boys, Charles, had worked in confectionery for the now-defunct chocolate manufacturer Merckens, and had always wanted to start a candy business based on his mother’s recipes. So in 1921 he moved with his wife, Florence MacLean Wilson See, family and mother to California, where they lived in a Victorian bungalow in Pasadena that tourists can still visit today!
The kitchen, where Mary originally made the candy, was black and white. When Charles opened his first store, he chose the now-iconic black-and-white theme to pay homage to Mary’s kitchen, as well as using her recipes and all the best ingredients. He coined the phrase ‘See’s Quality’, which is still used to this day. Charles built a company based on the values that he learned at home: honesty and integrity. Employees were part of the family, and customers were always greeted with a smile and given a free piece of chocolate before they started their shopping.
By the end of his reign, Charles grew the company from one Los Angeles store in in 1921 to 78 stores in California with 2,000 employees, and kept it thriving during the Great Depression. He passed away in 1949, and his son Laurance, who had been in the company since 1935, succeeded his father as president. When Laurance died in 1969, the family needed a new owner to run it – but without losing that special feeling that he and Charles had created. The family aimed high and sought out a leader who had a sweet tooth and was a customer of See’s, who understood the company’s values.
In 1972, the See family sold the business to the most successful investor of the twentieth century for $25m: Warren Buffett. As luck would have it, Warren was absolutely passionate about the brand’s peanut brittle! At this time, the company had revenues of $30m and an EBITDA of $4.2m, and Berkshire Hathaway bought the business because Warren was so impressed by the company’s loyal and vast customer base, as well as the ethos of the business – when he purchased it, he said that he was buying a ‘dream business’.
‘When I bought See’s, I revised my strategy and tried to buy good businesses at fair prices rather than fair businesses at good prices’ – Warren Buffet
When Berkshire Hathaway bought the business, Warren promoted the then-manager Chuck Huggins to president and chief executive – and the less official role of ‘chief candy taster’. He had been with the company since 1951, and he retired in 2006 after decades of promoting Charles’ original values and steadily growing the company.
Today, under the leadership of president and chief executive Brad Kinstler, See’s is run just like it was in 1921. The stores look the same as they always have, and customers are still greeted with a smile and a chocolate sample – and most importantly, the quality is as exceptional as ever. The only difference? As one would expect from an owner like Warren Buffett, it’s the numbers that have changed: last year, See’s reached revenues of $1.9bn from over 211 stores across the US and Asia, and its ecommerce business is growing at a more-than-steady rate. Over one hundred of the stores are on the West Coast, and according to Warren Buffet, ‘See’s thought and still thinks local. Customer satisfaction comes first and thinking local is still deeply ingrained in the business DNA.’ But there’s no question that growth is going to come from the rest of the USA and the international market. Warren says: ‘When I bought See’s, I revised my strategy and tried to buy good businesses at fair prices rather than fair businesses at good prices.’
Over the years, many of the businesses we at The MBS Group have worked with have faced the issue of authenticity and scalability as irreconcilable opposites. But as See’s has proven, the two are not mutually exclusive. With the right owner, small companies can continue to espouse their founding values while expanding their flagship products to a broader audience, allowing everyone to benefit. I have no doubt that as that wonderful peanut brittle makes its way across the globe, the See’s family will maintain the same feeling that it’s been known for for nearly a century. Brad Kinstler, can we please have a store on Marylebone High Street by this time next year? I will definitely be your first customer!