Food Bankruptcy Week: Wednesday - Primrose Candy. Debt was the Crack in their Sweet Tooth
98 Years in Business Doesn’t Protect Today’s Margin.
This isn't the biggest bankruptcy we'll cover during Food Bankruptcy Week. But since I happen to love their candy and am writing the story, I’ll share it to provide some sweet lessons.
Primrose Candy was founded in 1928, survived the Great Depression. World War II. Recessions. Inflation. Changing consumer tastes. Nearly a century of competition. They are the makers of the iconic hard candies grandmas are notorious for keeping in their purse. Butterscotch. Mints. Yeah, those.
98 years after Frank and Mae Puch started the Chicago company with only $500 ($10,000 in today’s dollars), they filed Chapter 11 bankruptcy on January 27, 2026.
Primrose reportedly generated about $11.8 million in revenue in 2024. That dropped to approximately $7.8 million the following year. 1/3 of revenue gone in 1 year. Ouch. (Not my fault. I bought what I always buy)
Meanwhile, ingredient costs were climbing, and the company had to service more than $12 million of debt. Do that math. Revenue fell roughly 1/3 while costs and debt obligations didn't politely lower along with it.
That's how businesses get squeezed.
Top Line Drops. COGS Line Rises. Debt service (interest rates) Rises.
That pinch means eventually there isn't any cash left. And they can’t borrow their way out of debt.
Primrose makes delicious hard candy, chewy candy, panned products and other foods and provides private-label and contract manufacturing services. People thought they were printing money.
This isn’t just a Primrose story. This is likely happening to one of your customers today.
Everyone wants price stability. Suppliers want increases because Labor costs rise, ingredient costs rise, Freight costs rise, Interest expenses rise… you get the picture. Manufacturers try to pass those increases through without losing the customer. Sometimes it works. Sometimes it doesn’t.
Credit professionals should watch the margin—not just the sales.
Imagine reviewing this account when revenue was $11.8 million. Maybe you've sold them for years. Maybe every invoice has historically been paid. Maybe ownership is fourth generation.
Everything feels familiar. They’ve paid you for over 75 years like clockwork. They owe you about the same as they always have. (red flag with revenues down 1/3). A company that’s been around this long, they don’t have any debt, right? (They had quite a bit).
Sales fall dramatically. That should trigger questions. Not panic. Just questions.
What's driving the decline? Are customers being lost? Are margins improving or deteriorating?
Are borrowing levels increasing? Are suppliers being stretched? (not you, you are critical, so you’ll be the last to see it). Is the company financing losses with debt?
The Credit Lesson
Credit risk often deteriorates gradually... but if you aren’t watching or asking, it will feel like the default was sudden.
The bankruptcy filing is the headline. But it really should be Don’t EVER be comfortable.
But if you are never comfortable, with any customer, how on earth will you ever sleep at night?
You would be happy to know, 90% of the unsecured creditors owed money by Primrose would have been approved for some amount without financial statements from all of the Big 3 Credit Insurers in the months leading up to the bankruptcy. Allianz Trade. Atradius. Coface.
The Crescendo Take
You can be paranoid on every single risk, but you’ll never sleep. You could decide to transfer some risk, only worry about the exceptions, the slow payors. Get some sleep. Manage the relationship, not the risk.
Crescendo Trade Risk -
Sell More | Risk Less.