Case Studies in King Size:
The Rise of National Brands
New York vs. Chicago
The meeting took place in New Jersey because that state was especially hospitable to companies seeking mergers. Some states were traditionally hostile to "foreign" corporations originating in other states. Under the provision of the New Jersey legislature it was specifically stated that, "The corporation is to have the power also to conduct business in other states and in foreign countries." 2
The merger was front page news around the country: "All the biscuit and cracker companies between Salt Lake City on the west, Portland, Maine, on the east, and St. Louis and New Orleans in the south, will tomorrow morning be under one management," reported The New York Times.3 The corporation merged 114 bakeries with 400 ovens and the capacity to consume 2,000,000 barrels of flour a year, and to produce 360,000,000 pounds of crackers annually.
Milk For The Union
The milk then commonly distributed in the city was called "swill-milk" because it came from city cows fed on distillers' "swill" or "still-slops," the residue from the distilleries. Such milk contained almost no butterfat, and to cover up its unsavory blue, it had to be artificially colored. Manure and milk were hauled in the same wagons, and Leslie's [magazine] told tales of how sick cows were propped up for a last milking before they expired. 5Borden both simplified and complicated the life of the local dairy farmer: complicated because the farmer had to adhere to relatively strict sanitary rules (udders washed before milking, no manure near the milking stalls, at least 58 degrees upon arrival); simplified because, as long as the farmer adhered to those rules, he got a regular check for milk delivered to the factory dock.6
The Civil War provided a huge demand for condensed milk (as well as other canned foods). Smartly, Borden had expanded production just as the war began, licensing plants elsewhere in the country. The Federal government actually commandeered the output of his plant to provide milk for the Army. The soldiers liked the condensed milk and after the war clamored for more, keeping that demand afoot.7 Indeed, war time demand for canned foods promoted the growth of the food processing industry as a whole.
Heinz was a master promoter, using techniques now familiar. He took his cucumber pickles to the Chicago World's Fair in 1893 and attracted over one million people to taste a free sample and pick up a tiny green reproduction pickle, a trinket for a charm bracelet or key chain. He did in-store demonstrations, gave away millions of samples, had a money back guarantee, opened his factories to the public, built a 900-foot Heinz Pier in Atlantic City and invested mightily in the new technology: electricity. A 6-story HEINZ electrically lighted green pickle graced the intersection of 5th Avenue and 23rd Street in New York City until 1906. 8
Heinz was also a pioneer in "vertical integration", that is, controlling or owning as much of the production process as possible, from the seeds all the way to the bottling plant. As early as 1880 he was developing better cucumber seeds and arranging with farmers contracts to grow them. He also owned the freight cars to move the pickles and the plant that made the bottles in which the pickles were preserved. 9
1 William Cahn, Out of The Cracker Barrel (New York, NY: Simon & Schuster, 1969), p.45.
2 Ibid., 56.
3 Ibid., 58.
4 Waverly Root and Richard de Rochemont, Eating In America (Hopewell, NJ: The Ecco Press, 1995, p. 159.
5 Daniel J. Boorstin, The Americans: The Democratic Experience (New York, NY: Random House, Inc, 1974), p. 314.
6 Ibid., 314.
7 Root, 187.