Peter Paul: How to weather economic woes


When times got tough during the Great Depression, some companies found ways to flourish. Take the Peter Paul candy company.

Peter Paul, which made its famous Mounds bars in Naugatuck for 85 years, crafted a unique strategy to cope with the Depression: It doubled the size of its candy bars, and kept the price steady.

And it emerged from the economic crisis stronger than it was when the Depression started.

That was a message delivered Tuesday at a symposium at the University of Hartford called “Facing Hard Times: The Thirties in America,” put on by the historical magazine Connecticut Explored.

Social studies teacher Gregg Pugliese spoke at the symposium about an article he wrote for the magazine, in which he told the fascinating and improbable story of how Peter Paul used ingenuity, a can-do attitude and a loyalty to its customers to thrive during the Great Depression from 1929 into the late 1930s.

The discussion may be more relevant now than ever, as companies look to find ways to succeed in a struggling global economy that has been described as the worst economic downturn since the Depression.

“We like to look at the past to tell us something about the future,” said Elizabeth J. Normen, publisher of Connecticut Explored. “We thought, what’s on everybody’s mind? Well, these are tough times, and our nation has faced many, so it’s important to know how Connecticut responded to them in the past.”

Pugliese, a Naugatuck native and teacher at John F. Kennedy High School in Waterbury, quotes Cal Kazanjian, one of the founders of Peter Paul, from a 1935 newspaper article:

“Any business that doesn’t emerge from the Depression stronger than it was when the economic panic began probably has a captain who does not know how to run his ship. … If [businessmen] would take the attitude that they would serve for whatever the public would pay, the public would support them more wholeheartedly, I’m sure.”

That attitude served Peter Paul well, as the company, which also had a candy shop in Torrington, had two products, Mounds and a now-defunct product called Dreams, that were ranked among the five top-selling candies in the United States.

Peter Paul’s story may have lessons that can be beneficial for any company at any time, even in today’s complex marketplace. The first, according to Pugliese, is pretty basic: Treat the customer well.

The now-defunct Naugatuck Peter Paul candy plant survived the Great Depression—and a local author says its story holds lessons modern businesses should heed
The now-defunct Naugatuck Peter Paul candy plant survived the Great Depression—and a local author says its story holds lessons modern businesses should heed

Instead of downsizing during the Great Depression, Peter Paul doubled the size of its best-selling Mounds bar and sold it for the same 5-cent price, according to Pugliese’s research. Within 30 days, sales increased dramatically, and the company had to build a $60,000 addition and buy new machinery to keep up with the demand.

“The company refused to change anything that would diminish the quality of the product,” Pugliese said. “I think that was what set them apart and really helped them in the long run.”

The company was also able to survive slow sales periods because it never incurred any crippling debt. Peter Paul built its manufacturing plant in Naugatuck in 1922 for $35,000 and repaid that money, including interest, to a local bank within two years, Pugliese said. The company also paid for an expansion years later without taking out a loan.

Thus, Peter Paul became known as the company that never knew the Great Depression.

Peter Paul also “thought outside the box,” Normen said.

For example, the company, which was the world’s largest buyer of coconuts, faced a dilemma during World War II. In 1942, the company lost its entire supply of coconut when the Japanese overran the Philippines.

Rather than give up, the company found new sources in the Caribbean, but had to deal with the prospect that ships carrying coconuts to the United States would make tempting targets for German submarines.

The company assumed the Germans wouldn’t waste ammunition on small boats, so it bought seven auxiliary schooners to bring coconuts from Caribbean islands to processing plants in Florida and Puerto Rico. Occasionally, the company, using its “flea fleet,” reported enemy submarine sightings to the Navy, but its boats were never targeted. It also gave coconut shells to chemical plants, which used them to produce activated carbon for gas masks and high explosives, Pugliese said.

But times change, and so do companies. Faced with new challenges in 2007, Peter Paul retreated, cutting production and moving its production of Mounds bars out of Naugatuck.

The closure of its Naugatuck plant after 85 years of operation was a brutal blow to the community that had nurtured its success for generations.