Beatrice Foods

Beatrice Foods Company

Fate	Acquired by ConAgra Foods
Founded	1894
Defunct	1990 in US
Headquarters	Irvine, California Downers Grove, Illinois
Products	Food

Beatrice Foods Company was a major American food processing company.^[1] In 1987, its smaller international food operations were sold to Reginald Lewis, a corporate attorney, creating TLC Beatrice International, after which the majority of its domestic (U.S.) brands and assets were acquired by Kohlberg, Kravis, Roberts (KKR), with the bulk of its holdings sold off. By the early 1990s, the remaining operations were ultimately acquired by ConAgra Foods.

History

The Beatrice Creamery Company was founded in 1894 by George Everett Haskell and William W. Bosworth, by leasing the factory of a bankrupt firm of the same name located in Beatrice, Nebraska. At the time, they purchased butter, milk, and eggs from local farmers and graded them for resale. They promptly began separating the butter themselves at their plant, making their own butter on site and packaging and distributing it under their own label. They devised special protective packages and distributed them to grocery stores and restaurants in their own wagons and through appointed jobbers. To overcome the shortage of cream, the partners established skimming stations to which farmers delivered their milk to have the cream, used to make butter, separated from the milk. This led to the introduction of their unique credit program of providing farmers with hand cream-separators so they could separate the milk on the farm and retain the skim milk for animal feeding. This enabled farmers to pay for the separators from the proceeds of their sales of cream. The program worked so well, the company sold more than 50,000 separators in Nebraska from 1895 to 1905. On March 1, 1905, the company was incorporated as the Beatrice Creamery Company of Iowa, with capital of $3,000,000. By the start of the 20th century, they were shipping dairy products across the United States, and by 1910, they operated nine creameries and three ice cream plants across the Great Plains.

The company moved to Chicago in 1913, at the time the center of the American food processing industry. By the 1930s, it was a major dairy company, producing some 30 million US gallons (110,000,000 l) of milk and 10 million US gallons (38,000,000 l) of ice cream annually. In 1939, Beatrice Creamery Company purchased Blue Valley Creamery Company, the other Chicago-based dairy centralizer. This acquisition added at least 11 creameries from New York to South Dakota. Beatrice's 'Meadow Gold' brand was a household name in much of America by the beginning of World War II. In 1946, it changed its name to Beatrice Foods and doubled its sales between 1945 and 1955 as the post-war baby boom created vastly greater demand for milk products.

From the late 1950s until the early 1970s, the company expanded into Canada and purchased a number of other food firms, leveraging its distribution network to profit from a more diverse array of food and consumer products. It came to be the owner of brands such as Avis Rent A Car, Playtex, Shedd's, Tropicana, John Sexton & Co, Good & Plenty, and many others. Annual sales in 1984 were roughly $12 billion. During both the Winter and Summer Olympics that year, the corporation flooded the TV airwaves with advertisements letting the public know that many brands with which they were familiar were actually part of Beatrice Foods. These ads used the tagline (with a jingle) "We're Beatrice. You've known us all along." After the Olympics, advertisements for its products continued to end with the catchphrase "We're Beatrice" and an instrumental version of the "You've known us all along" portion of the jingle, as the red and white "Beatrice" logo would simultaneously appear in the bottom right hand corner. However, the campaign was soon found to alienate consumers, calling attention to the fact that many of their favorite brands were in fact part of a far-reaching multinational corporation, and the campaign was pulled off the air by autumn.

In 1968, Sexton Foods was approached by Beatrice with an offer to purchase the John Sexton & Co. Beatrice was attracted to Sexton Quality Foods’ distribution network, quality, variety of private-label products, specialized food offerings, sales force and profitability. Mack Sexton’s initial response was no, but Beatrice Foods was very interested. Eventually, both parties reached an agreement. Beatrice Foods increased the purchase price, pledged capital to expand Sexton Quality Foods' distribution network, pledged capital to introduce a new Sexton frozen product line, and pledged that the Sexton leadership would continue to lead and operate the company as a separate entity. On December 20, 1968, Beatrice acquired the business and assets of John Sexton & Co., exchanging about 375,000 shares of Beatrice's preferred convertible preference stock valued at $37,500,000. John Sexton & Co. would become an independent division of Beatrice Foods, but still led by Mack Sexton (son of Franklin), William Egan (son of Helen), and William Sexton (son of Sherman). Mack became a vice president of Beatrice and a Beatrice board member. John Sexton & Co. put Beatrice Foods into the wholesale grocery business and Beatrice put John Sexton & Co. into the frozen foods business.^[2] Beatrice's and the Sexton's leadership were interested in maximizing the investment in John Sexton & Co. by growing the company.

Through the 1980s, Beatrice was a co-defendant alongside W. R. Grace and Company in a lawsuit alleging that the Riley Tannery, a division of Beatrice Foods, had dumped toxic waste which contaminated an underground aquifer that supplied drinking water to East Woburn, Massachusetts. The case became the subject of the popular book and film A Civil Action. Federal judge Walter Jay Skinner ruled that Beatrice was not responsible for the contamination, although according to the book and film, based on new evidence brought forward by the EPA later found, Judge Skinner reversed his verdict and found both companies responsible.

In 1986, Beatrice became the target of leveraged buyout specialists Kohlberg Kravis Roberts. They ultimately took over the firm for US$8.7 billion — at the time the largest leveraged buyout in history — and over the next four years sold it off, division by division. Its smaller international food operations were sold to Reginald Lewis, a corporate attorney, creating TLC Beatrice International in 1987, becoming the largest business in America run by an African American and the first company to reach a billion dollars in sales, with a black man at its head. In 1990, the last of Beatrice's assets were sold to ConAgra Foods. Most of Beatrice's brand names still exist, but under various other owners, as trademarks and product lines were sold separately to the highest bidder.

In 2007, Almus, Inc. formed Beatrice Companies, Inc., as the new food manufacturing and distribution business, adhering to the original business model of high quality food products that are both regional and national in scope. Beatrice Companies, Inc. at present operates in the domestic (U.S.) market.

Beatrice's Canadian subsidiary, Beatrice Foods Canada Ltd., was founded in 1969 and became legally separate from its parent firm in 1978. It was therefore unaffected by the buyout of its American counterpart.

Former Beatrice brands

Beatrice Foods Canada Limited

Beatrice Foods Canada Ltd. is a Toronto, Ontario based dairy unit of Parmalat Canada. The Canadian unit of Beatrice Foods was founded in 1969, and was separated from Beatrice Foods in 1978.

Consequently, Beatrice's Canadian unit was not affected by the buyout of its founders and remained in business as one of Canada's largest food processing concerns.

In 1997 Beatrice Foods Canada was acquired by Parmalat. At first, Parmalat decided to drop the Beatrice name from the company's products, but was reinstated in late 2005 during which the Italian parent company was being investigated.

See also

• Lee Archer, head of North Street Capital Corporation and Archer Asset Management
• A Civil Action

References

External links

• Parmalat Canada
• Beatrice Canada
• Beatrice Companies, Inc.
• Beatrice Foods Memorial