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Did Chicago become #1 in candy because of a fluke in shipping rates?
November 26, 2009

Dear Cecil:

Now that you've debunked my favorite Chicago story (about why streets jog at North Avenue), I'm daring to ask whether there's any truth in another wonderful story I've often repeated but can't prove. The Encyclopedia of Chicago confirms that Chicago held the #1 candy manufacturing spot in the 20th century. Somewhere along the line I heard this was related to Chicago's location as a rail hub specifically, that sugar was shipped F.O.B. Chicago, so that if you put your candy company in Chicago you could hold down your shipping costs for sugar and increase your profits. It's a great story, and people are always impressed when I tell it (usually as I pass the abandoned Brach's plant on the Green Line or Ferrara Pan Candy on the Blue), but after the scales fell from my eyes on the North Avenue story I started to wonder if this is equally fanciful.

Yooperann, via the Straight Dope Chicago Message Board

Cecil replies:

Equally fanciful, no. You'd have to go a stretch to beat the cosmic scope of the North Avenue jogging story. In fact, your story isn't fanciful at all — but you did mess up a crucial detail that threw me off at first. After all, while Chicago is a rail hub, why should local candy makers get a special deal on sugar? It's not like we're the throbbing heart of world sugar trade. On investigation, it turns out Chicago candy makers did get a break on a key ingredient, which contributed to the concentration of the industry in the area. But sugar wasn't it.

Before we get into what was, I'd better go into more detail about F.O.B. Chicago, for those who think it's related to F.A.O. Schwarz. Variously translated as Free On Board or Freight On Board, F.O.B. [shipping point] is the location from which freight rates are calculated. The seller is responsible for getting whatever he's hawking to the F.O.B. point; the buyer has to get it the rest of the way. If you buy a commodity F.O.B. Podunk and that's where your factory is, you've got a cost advantage over a manufacturer who has to pay to ship the stuff somewhere else.

The F.O.B. point for a bulk product is typically a transportation center convenient to the farms or factories where the item is produced. With its rail, air, and water connections, Chicago is the F.O.B. point for lots of things — for example, agricultural products traded on the city's futures exchanges.

But not sugar. The candy ingredient you should've been crediting all these years, Yooperann, is corn syrup. The story was told in an October 1978 Chicago magazine story about candy maker E.J. Brach & Sons by the company's then president, Ned Mitchell:

The [Brach] plant uses four to five railroad cars of sugar and three to four tank cars of corn syrup a day. Corn syrup is a basic ingredient of all candy and is traditionally priced F.O.B. Chicago. This is why we're a confectionery center (Mars, Holloway, Curtiss, Tootsie Rolls, Clark Bars, and Cracker Jack). We're only 250 miles from starch and corn-syrup manufacturers in Illinois and Iowa. We're in a good location for buying beet sugar that comes in from the West and cane sugar that comes in from the South or from foreign countries via the East Coast. We have our own Belt Line rail connection here and wonderful trucking. That's something to consider in rush periods, when we have tons of raw materials coming in and two million pounds of candy a day going out.

Other factors mentioned as contributing to Chicago's emergence as candy capital are the early concentration of immigrant candy craftsmen here plus the cold winters, which supposedly make the high heat of candy manufacturing more tolerable. Whatever. Seems clear enough the main reasons Chicago became a big candy maker are the same reasons it became a big everything maker — central location, good transportation, and a big labor market.

Chicago isn't the candy making force it used to be, favorable shipping rates notwithstanding. Brach, which was sold multiple times and is now part of a company headquartered in Minnesota, closed its Chicago plant at the end of 2003. The old company headquarters, tricked out as Gotham General Hospital, was blown up for a scene in The Dark Knight (2008). Curtiss Candy, maker of Baby Ruth bars, also passed through many hands; most of the company's brands are now owned by Nestlé. Candy making  employment, more than 10,000 as of 1995, had fallen to around 6,000 as of 2004. Nonetheless, for what it's worth in this postindustrial age, the city reportedly remained the candy capital as of 2005.

 — Cecil Adams
Photo by Pat O'Neil

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