Favorite Brands International was founded in 1995, when

Texas Pacific Group TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...

bought

Kraft Foods, Inc. The second incarnation of Kraft Foods is an American food manufacturing and processing conglomerate, split from Kraft Foods Inc. in 2012 and headquartered in Chicago, Illinois. It became part of Kraft Heinz in 2015. A merger with Heinz, arra ...

confection division.

Formation

In early 1995, the newly appointed head of

Kraft General Foods The second incarnation of Kraft Foods is an American food manufacturing and processing conglomerate, split from Kraft Foods Inc. in 2012 and headquartered in Chicago, Illinois. It became part of Kraft Heinz in 2015. A merger with Heinz, arra ...

James M. Kilts James M. Kilts was a chief executive officer of The Gillette Company. He negotiated the sale of the company to Procter & Gamble for US$57 billion. Press investigators estimate that he stood to gain more than $165 million personally in the purchase. ...

, merged Kraft USA, General Foods USA, and Kraft General Foods Canada into a single organization called Kraft Foods, Inc. This was the main food subsidiary of

Philip Morris USA Philip Morris USA is the American tobacco division of the American tobacco corporation Altria, Altria Group. History Creation The company's namesake Philip Morris (tobacconist), Philip Morris was born in Whitechapel, United Kingdom in 1835, ...

. Looking to improve margins, Kraft Foods put their confections division, which consisted of the Jet-Puffed Marshmallows brand and Kraft Caramels, along with the

Kendallville, Indiana Kendallville is a city in Wayne Township, Noble County, in the U.S. state of Indiana. The population was 9,862 at the 2010 census. History Kendallville was laid out in 1849. The city was named for Amos Kendall, 8th United States Postmaster Gene ...

plant, and marshmallow production and packaging equipment from Kraft's

Buena Park, California Buena Park (''Buena'', Spanish for "Good") is a city in Orange County, California, United States. As of the 2020 census its population was 84,034. It is the location of several tourist attractions, namely Knott's Berry Farm. It is about 12 mi ...

Garland, Texas Garland is a city in the U.S. state of Texas. It is located northeast of Dallas and is a part of the Dallas–Fort Worth metroplex. It is located within Dallas County except for small portions located in Collin and Rockwall Counties. At the ...

, and

Canadian Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...

plants, up for sale in early 1995.

and InterWest Partners acquired the $150-million-in-sales caramel and marshmallow businesses on July 1, 1995.

Expansion

Al Bono was the president-chief executive officer. In May 1996, Favorite Brands quickly bought out one of its major competitors, Kidd & Co, headquartered in

Ligonier, Indiana Ligonier is a city in Perry Township, Noble County, in the U.S. state of Indiana. The population was 4,405 at the 2010 census. History Ligonier was platted in 1835. The city was named after the Pennsylvanian borough of the same name. A post of ...

, only a few miles away from its flagship plant in Kendallville, along with a plant in

Henderson, Nevada Henderson is a city in Clark County, Nevada, United States, about southeast of downtown Las Vegas. It is the second largest city in Nevada, after Las Vegas, with an estimated population of 320,189 in 2019. The city is part of the Las Vegas Vall ...

. In October 1996, the Ligonier plant was converted to a warehouse and all production was transferred to the Henderson and Kendallville plants, along with the employees. Favorite Brands bought Sathers, Inc.,

Round Lake, Minnesota Round Lake is a city in Nobles County, Minnesota, Nobles County, Minnesota, United States. The population was 376 at the 2010 United States Census, 2010 census. Geography According to the United States Census Bureau, the city has a total area ...

, with an estimated $200 million in annual sales. Favorite Brands bought Farley Foods USA, August 31, 1996, with an estimated $300 million in annual sales, and five production facilities. Mark Upson, who was hired in March 1998, as the president-chief operating officer, resigned in late May of the same year. Al Bono, the chairman-chief executive officer, resigned in late July 1998, citing "differences in operational issues with the board".

Bankruptcy and buyout

On September 29, 1999,

Nabisco Nabisco (, abbreviated from the earlier name National Biscuit Company) is an American manufacturer of cookies and snacks headquartered in East Hanover, New Jersey. The company is a subsidiary of Illinois-based Mondelēz International. Nabisco's ...

announced they were buying Favorite Brands for $475 million along with assuming $600 million of debt owed to creditors.

References

Bibliography

* * * * * {{Authority control Confectionery companies of the United States Food and drink companies established in 1995