Hormel

Hormel Foods Corporation

Type	Public
Traded as	NYSE: HRL S&P 500 Component
Industry	Food processing
Founded	1891 (1891)
Founder	George A. Hormel
Headquarters	Austin, Minnesota, United States
Number of locations	40 Manufacturing & Distribution Facilities
Key people	Jeffrey Ettinger (Chairman) [1] James Snee (CEO) [1]
Products	Deli meat, ethnic foods, pantry foods, Spam
Revenue	US$ 8.230 billion (2012)
Operating income	US$ 764.6 million (2012)
Net income	US$ 500.0 million (2012)
Total assets	US$ 4.91588 billion (2013) [2] US$ 4.563966 billion (2012) [3]
Total equity	US$ 2.819 billion (2012)
Number of employees	19,700 (2013)
Divisions	Grocery Products Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other
Website	www.hormelfoods.com
Footnotes / references [4][5]

Hormel Foods Corporation is an American food company based in Austin, Minnesota. The company was founded as George A. Hormel & Company in Austin by George A. Hormel in 1891. It changed its name to Hormel Foods in 1993.

Hormel sells food under many brands, including the Applegate, Chi-Chi's, Dinty Moore, Farmer John, Herdez, Jennie-O, Justin's, Lloyd's, Muscle Milk, Skippy, Spam, Stagg, La Victoria^[6] and Wholly Guacamole brands, as well as under its own name.^[7] The company is listed on the Fortune 500.

History

19th century

George A. Hormel (born 1860 in Buffalo, New York) worked in a Chicago slaughterhouse before becoming a traveling wool and hide buyer. His travels took him to Austin and he decided to settle there, borrow $500, and open a meat business. Hormel handled the production side of the business and his partner, Albert Friedrich, handled the retail side. The two dissolved their partnership in 1891 so that Hormel could start a complete meat packing operation on his own.^[8] He opened George A. Hormel & Co. in the northeast part of Austin in an old creamery building on the Cedar River. To make ends meet in those early days, Hormel continued to trade in hides, eggs, wool, and poultry. Joining George in November 1891 was his youngest brother, Benjamin, age 14. By the end of 1891 Hormel employed six men and had slaughtered and sold 610 head of livestock. By 1893, the increased use of refrigerator cars and greater efficiency had forced smaller businesses to collapse. Two additional Hormel brothers, Herman and John, joined the business that same year, and together they processed 1,532 hogs. The remaining members of the Hormel family moved to Austin in 1895 and joined the growing business. George turned to full-time management in 1899, and focused on increasing production.^[9]

1900s

In 1901, the plant was expanded and the business was incorporated. The first directors were A.L. Eberhart and the four Hormel brothers: George, Herman, John and Ben. In 1903 George decided to add a three-story hog-kill, a two-story beef-kill, an annex, an engine room, a machine shop and a casing production department.^[10] The name Dairy Brand was registered with the U.S. Patent Office in 1903. In the first decade of the 20th century distribution centers were opened in St. Paul, Minneapolis, Duluth, San Antonio, Dallas, Chicago, Atlanta, and Birmingham. George Hormel visited England in 1905 and started exporting products soon after.^[11]

1910s

By 1910, Hormel products were routinely appearing in national magazines.^[12] That same year the company developed a procedure to recycle its waste water by daily evaporating up to 9,000 gallons of water, leaving a syrupy liquid which was dried to produce a commercial fertilizer. In 1915 Hormel began selling dry sausages under the names of Cedar Cervelat, Holsteiner and Noxall Salami.^[13] That same year Hormel bought Alderson's Mill and began selling Hormel Peerless Minnesota flour nationwide.^[14] Hormel joined the World War I effort, George's son Jay C. went into military service^[15] and by the end of the war, exports accounted for 33% of the company's yearly volume.^[16]

1920s

In 1921, when Jay Hormel returned from service in WWI, he uncovered that assistant controller Cy Thomson had embezzled $1,187,000 from the company over the previous ten years. The embezzlement scandal provided George Hormel with additional incentive to fortify his company. He did so by arranging for more reliable capital management, by dismissing unproductive employees, and by continuing to develop new products.^[17] In 1926, the company introduced Hormel Flavor-Sealed Ham, America's first canned ham and it added chicken to its line in 1928.^[18] Jay C. Hormel became company president in 1929 and that same year the plant was expanded again to include eight new structures and the main office was tripled in size.^[19] In the late 1920s and early 1930s sales branches opened in Houston, Beaumont, Chattanooga, New Orleans, Baton Rouge, Newark, Los Angeles, Vicksburg, and Nuevo Laredo (Mexico).^[20]

1930s

In 1931, Jay C. instituted the Annual Wage Plan: under this plan, employees were paid weekly and they were guaranteed 52 weeks' notice before termination of employment.^[21] He also introduced incentive pay, profit sharing and pension plans to the company.^[22] Later that year a slaughtering plant was constructed in Mitchell, South Dakota, and in 1933, a cattle slaughtering plant was finished in Austin. John G. Hormel, brother of George A., retired in 1933 following 40 years of service.^[23] Dinty Moore beef stew was introduced in 1935 first created by Ryen "Gunns" Gunning and Hormel Chili and Spam soon followed in 1936 and 1937 respectively.^[24] In 1938, Jay C. Hormel introduced the "Joint Savings Plan" which allowed employees to share in the proceeds of the company.^[25] By the late-1930s, full-page, four color ads were routinely appearing in the Saturday Evening Post, Ladies Home Journal and Woman's Home Companion. Hormel ads also were featured on the radio program The George Burns and Gracie Allen Show.

In 1933, workers, led by itinerant butcher Frank Ellis, formed the Independent Union of All Workers and conducted one of the nation's first successful sit-down strikes; the union would later join the Congress of Industrial Organizations (CIO, later AFL-CIO).^[26][27][28]

The 1930s also saw the establishment of the Hormel & Co. refrigerator car line, with an initial roster of 125 units.

1940s

After reaching sales of $75 million in 1941, George and Jay established The Hormel Foundation to provide perpetual independence of the company, act as trustees of the family trusts and to start and fund The Hormel Institute, a research unit at the University of Minnesota.^[29] Benjamin F. Hormel, brother of George A., retired in 1941 after completing 50 years of service.^[30] Hormel's production increased to aid in World War II and 65% of its products were purchased by the U.S. government by 1945.^[31] Founder George A. Hormel died in 1946 in California where he had lived in retirement. He is buried in Austin's Oakwood Cemetery. Jay C. then became chairman of the board, H.H. Corey became president, and R.F. Gray became vice-president.^[32] Hormel acquired the Fremont Packing Company in 1947.^[33]

1950s

In 1953, it acquired the Tobin Packing Company of Fort Dodge. Also in 1953, distribution centers were opened in San Francisco, Seattle and Beaumont and the company's first non-continental plant opened in Honolulu.^[34] Jay C. Hormel died on August 30, 1954, and Corey was named chairman of the board and R.F. Gray was elected president the following year.^[35] During Gray's tenure as president, the company greatly expanded its international business through arrangements with companies in Ireland, The UK, Canada and Venezuela. Stagg Chili is a brand of chili con carne sold in cans or boxes that was launched in 1956. In 1959, Hormel was the first meatpacker to receive the Seal of Approval of the American Humane Society for its practice of anesthetizing animals before slaughter.^[36]

1960s

Little Sizzlers sausages were introduced in 1961^[37] and Cure 81 hams were introduced in 1963.^[38] In 1962, Hormel constructed a 75,000-square-foot (7,000 m²) sausage manufacturing building in Austin and discontinued the slaughter of calves and lambs.^[39] Also in 1963, Hormel acquired the Queen City Packing Company plant in Springfield, Missouri, and the Ottawa Meat Packing Company plant in Miami, Oklahoma. New plants were also constructed in Chattanooga and Los Angeles and the plants in Charlotte, Winston-Salem, Fresno and Houston were remodeled or expanded. In 1964, the Hormel Corporate Offices were opened just to the north of Interstate 90 in Austin. Gray replaced Corey as chairman of the board upon the latter's retirement in 1965, and M.B. Thompson became president.^[40] During Thompson's tenure (1965–1969) a dry sausage plant was built in Algona and distribution centers were built in San Antonio, New Orleans and Atlanta. In 1967, the company, in cooperation with the National Merit Scholarship Program, started a college scholarship program for the children of Hormel employees. Partial scholarships were awarded through this program on the basis of the student's test scores, academic records, financial need, and school and community involvement. A separate building to house the growing research and development department was built northwest of the corporate office in Austin in 1968. In 1969, Gray resigned from the company and Thompson replaced him as chairman (by this time the chairman was called the CEO) and I.J. Holton was named president.^[41]

1970s

In 1970, a distribution plant was built in Albany, Georgia, and a dry sausage plant was built in Algona. In 1971, meat processing facilities and distribution centers were opened in both Dallas and Seattle.^[41] That same year the company introduced its Matching Gifts program in which it offered to match the donation (up to $2,000) made by any employee to any accredited college or university. In 1972, Holton became CEO and distribution centers were opened in Orlando and Shreveport and a food service facility was built in Oklahoma City. A grocery products plant was opened in Beloit in 1973.^[41] On this site the city now boasts the world's largest can of chili. Also in 1973, Hormel Foods became the first company in the meatpacking industry to introduce nutritional and ingredient labeling on meat products.^[42] A frozen foods plant was opened in Fort Worth in 1974. A distribution plant was opened in Houston in 1975. In 1976, a slaughtering and processing plant was opened in Ottumwa, a dry sausage plant was opened in Knoxville, Iowa, and a grocery products canning facility was acquired in Stockton. A distribution plant was built in Fresno in 1978. A gelatin plant was opened in Davenport and groundbreaking for a new, one-story Austin plant in 1979.^[43] That same year Richard Knowlton was elected as president, the first Austinian to hold that post since Jay Catherwood Hormel.^[40]

1980s

Holton continued as CEO until 1981 and then this duty was also passed to Knowlton. The construction of the current Austin plant began in 1980, and the Knoxville and Ottumwa plants were expanded. The plants in Beloit, Los Angeles and Ottumwa were renovated and expanded.^[44] The new Austin plant, a 1,300,000-square-foot (120,000 m²) facility, began production on May 24, 1982, and was dedicated on September 12, 1982.^[45] Knowlton also became chairman of the board in 1984, while continuing to hold the titles of president and CEO. Not-So-Sloppy-Joe Sloppy Joe sauce made its debut in 1985.^[46] In 1986, Hormel Foods acquired Jennie-O Foods^[40] and also began an exclusive licensing arrangement to produce Chi-Chi's brand products.^[47] The following year, Hormel Foods introduced the Top Shelf line of microwavable non-frozen products. The company added to their poultry offerings by purchasing Chicken by George, created by former Miss America Phyllis George, in 1988. That same year, Hormel Foods also introduced microwave bacon.^[48] In mid-1984, Hormel introduced the Frank 'n Stuff brand of stuffed hot dogs.^{[46][49][50][51][52]}

1985 strike

In August 1985, Hormel workers went on strike at the Hormel headquarters in Austin, Minnesota. In the early 1980s, recession impacted several meatpacking companies, decreasing demand and increasing competition which led smaller and less-efficient companies to go out of business. In an effort to keep plants from closing, many instituted wage cuts. Wilson Food Company declared bankruptcy in 1983, allowing them to cut wages from $10.69 to $6.50 and significantly reduce benefits. Hormel Foods had avoided such drastic action, but by 1985, pressure to stay competitive remained.^[53] Workers had already labored under a wage freeze and dangerous working conditions, leading to many cases of repetitive strain injury. When management demanded a 23% wage cut from the workers they decided to begin the strike.^[54] It became one of the longest strikes of the 1980s. The local chapter of the United Food and Commercial Workers Union, Local P-9, led the strike, but was not supported by their parent union. The strike gained national attention and led to a widely publicized boycott of Hormel products.

After six months, a significant number of strikebreakers crossed the picket line, provoking riots in Austin. On January 21, 1986, the Governor of Minnesota, Rudy Perpich, called in the National Guard to protect the strikebreakers. This brought protests against the governor, and the National Guard withdrew from Austin. The action had a greater effect on the UFCW international, which ousted the local P-9.

The strike ended in June 1986, after lasting 10 months. Over 700 of the workers did not return to their jobs, refusing to cross the picket line. In solidarity with those workers, the boycott of Hormel products continued for some time. Ultimately, however, the company did succeed in hiring new workers at significantly lower wages.

The strike was chronicled in the film American Dream, which won the Academy Award for best documentary in 1990. A song about the strike, entitled "P-9" was written by Dave Pirner of the Minneapolis band Soul Asylum. The song can be found on their 1989 album Clam Dip & Other Delights.

The strike has also had a Harvard Business School Case written based on it (with assumed names), called "Adam Baxter Co./Local 190" which features multiple rounds of negotiations between unions and management.^[55]

1990s

Hormel Foods celebrated 100 years of operation in 1991. In 1993, the name of the company was officially changed from Geo. A. Hormel & Company to Hormel Foods Corporation. That same year Knowlton retired and Joel W. Johnson became president and CEO. Production facilities were opened in Osceola, Iowa in 1996.

2000s

The SPAM Museum in Austin, Minnesota, was opened in 2001. That same year, Hormel Foods acquired The Turkey Store, the business was combined with Jennie-O Foods to form Jennie-O Turkey Store.^[56] In 2004, Jennie-O Turkey Store launched its Jennie-O Turkey Store Oven Ready turkey. In 2004, Jeffrey M. Ettinger succeeded Johnson as company president and introduced the Billion Dollar Challenge, setting a goal for the company to generate $1 billion in sales from new products by the end of fiscal year 2009.^[40] The same year Hormel Foods introduced the first nationally distributed all-natural line of meat products with Hormel Natural Choice deli meats, which utilizes high pressure processing technology.^[57] Recent acquisitions by Hormel Foods include: Diamond Crystal Brands (2002),^[58] Century Foods International (2003)^[59] Clougherty Packing (Farmer John) (2004),^[60] Lloyd’s Barbeque Company (2005),^[61] Mark-Lynn Foods (2005), Arriba Foods (2005), Provena Foods (2006) and Burke Foods (2007).^[62]

In 2004, five new varieties of the Stagg Chili brand were made available nationwide.^[63]

In 2008, the company achieved the $1 billion sales goal of the Billion Dollar Challenge a year early and introduced a new challenge introduced to generate $2 billion in sales from new products by 2012.^[64]

In 2008, animal rights organization PETA sent members to work undercover at a pig factory farm in Iowa to investigate allegations of animal rights abuses, then released a video record^[65] showing workers treating the pigs cruelly and without regard for animal rights. The factory farm was owned by Natural Pork Production II LLP of Iowa until August 18, 2008, at which point ownership had transferred to MowMar LLP. Prior to this the farm was not a supplier to Hormel Foods. Hormel spokeswoman Julie Henderson Craven, who responded to the PETA video, called the videotaped abuses "completely unacceptable."^[66] In their 2007 Corporate Responsibility Report, Hormel Foods stated that all suppliers are expected to comply with several welfare programs to ensure that the hogs purchased are treated humanely. Because of the investigation, several employees of the farm were fired and six individuals faced charges due to the abuse.^[67]

In November 2008, an article in the New York Times, "SPAM Turns Serious and Hormel Turns Out More," detailed an overwhelming spike in the demand for SPAM, perhaps due to the flagging economy.^[68] In July 2009, Hormel and Herdez del Fuerte created the joint venture MegaMex Foods to market and distribute Mexican food in the United States.^[69] Brands included in the venture include Herdez, La Victoria, Chi Chi's, El Torito, Embasa, Wholly Guacamole, Del Fuerte, Dona Maria, Bufalo, and Don Miguel.^[70]

2010s

In 2010 Hormel Foods opened Progressive Processing, Inc, in Dubuque, Iowa. The facility was awarded the U.S. Green Building Council's Leadership in Energy and Environmental Design Gold status, one of the first manufacturing facilities to be LEED certified.^[71] MegaMex Foods, a joint venture of Hormel Foods and Herdez del Fuerte, acquired Don Miguel Foods, a leading provider of branded frozen and fresh authentic Mexican flavored appetizers, snacks and handheld items.^[72]

In 2011, Hormel Foods announced a 2 for 1 stock split.^[73] Hormel Foods also acquired Fresherized Foods, makers of Wholly Guacamole, as part of their MegaMex joint venture.^[74]

In 2012, the Spam brand celebrated its 75th anniversary with the introduction of Sir Can A-Lot™, its first ever campaign spokescharacter.^[75] Hormel Foods also announced that it met its ambitious “Go for $2B by 2012” goal by achieving $2 billion in total sales from new products created since 2000 by the end of fiscal year 2012.^[76] The company's next challenge "The $3B by 2016 Challenge," to achieve $3 billion in total sales of products created since 2000 by the end of 2016 is currently underway.^[77]

On January 3, 2013, Hormel Foods announced it had purchased Skippy—the best-selling brand of peanut butter in China and the second-best-selling brand in the world—from Unilever for $700 million; the sale included Skippy's USA and China factories.^[78]

The company also began to produce a brand of wrapped tortilla-like snacks dubbed REV. These wraps are essentially miniature tacos, available in several flavors such as pepperoni pizza, ham & cheese, peppered turkey, meat lovers pizza, Italian-style ham, along with several others.^[79]

Hormel bought the CytoSport company in June 2014 for about US$450 million, including the Muscle Milk protein supplement brand.^[80] In October of that year, Hormel Foods announced a partnership with the Cancer Nutrition Consortium, to provide cancer patients with nutritional offerings for their specific, individual needs during cancer treatment.^[81]

In May 2015, Hormel revealed it would acquire meat processing firm Applegate Farms for around $775 million, expanding its range of natural and organic meat products.^[82] The company also announced James P. Snee was elected to the position of president and chief operating officer in October 2015.^[83] The company was named to the Human Resource Campaign Foundation's Best Places to Work for LGBT Equality in November.^[84] In 2015, after an undercover investigation at a Minnesota processing plant, Hormel Foods announced it was bringing humane handling officers to the QPP facility to ensure compliance with its own animal welfare standards. It has also told QPP to provide extra training, enhance compliance oversight and increase third-party auditing. QPP announced plans to strengthen its video monitoring system and improve animal handling equipment.^[85]

In 2016, Peak Rock Capital purchased the Diamond Crystal Brands Inc. unit, purchased by Hormel in 2002 for $155 million from Imperial Sugar.^[86][87]

Jeffrey Ettinger retired as CEO, effective October 30, 2016. Ettinger remained Chairman of the Board.^[1] President & COO James Snee assumed the role of CEO effective October 31, 2016.^[1]

Corporate responsibility

Hormel Foods released its first Citizenship Overview, formally reporting the company’s corporate responsibility initiatives in 2007.^[88] The company has been included on the Corporate Responsibility (CR) Magazine 100 Best Corporate Citizens List for the last seven consecutive years.^[89]

In 2008, Hormel Foods donated funds to The Hormel Institute, which dedicated an expansion to their cancer research facility.^[90] The project renovated a building adding research facilities, including space to house the Blue Gene/L supercomputer. The Institute, located in Austin, MN, was the result of a partnership in 1942 between the Hormel Foundation, the University of Minnesota and Mayo Clinic.

In 2011, Hormel Foods introduced SPAMMY, a fortified, shelf-stable turkey spread to help address childhood malnutrition throughout the world. The company made an initial three-year commitment to deliver 1 million cans to in-need families in Guatemala.^[91] In 2014, Hormel Foods announced promising results of the nutrition research portion of Project SPAMMY.^[92] In 2015, SPAMMY became available for purchase under Title I for U.S. Department of Agriculture (USDA) feeding programs and Title II for U.S. Agency for International Development (USAID) programs under the name fortified poultry-based spread (FPBS).^[93]

In 2012, Hormel Foods announced its second set of environmental goals. The company surpassed the water reduction, packaging and solid waste minimization goals of its first set of five-year goals, which ended in 2011.^[94] That same year, Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, was named Responsible CEO of the Year by CR Magazine.^[95]

In 2013, Hormel Foods received two AMI environmental achievement awards for the company’s expansion project at the Corporate Office and a water conservation project at Burke Marketing Corp.^[96]

In 2015, Hormel Foods announced that it met its solid waste reduction goal six years early. The company's Corporate Responsibility report is available online at www.hormelfoods.com/csr and includes information related to the company’s sustainability performance in 2014.^[97]

Allegations of animal abuse

In January 2016, Mercy For Animals released undercover footage of pigs being abused at a Hormel pork supplier. The undercover video shows piglets having their testicles ripped out and tails cut off without any anesthetic, piglets left to suffer from untreated illness or injuries, piglets with no room to move trampling each other in crowded hallways, and mother pigs crammed into filthy gestation crates unable to move.^[98] In response, Hormel suspended its buying from the supplier.^[99]

See also

• List of food companies
• Philip Danforth Armour
• Gustavus Franklin Swift
• Hormel Historic Home

Further reading

• Lund, Doniver (1990). The Hormel Legacy: 100 Years of Quality. Austin, Minnesota: Geo A. Hormel & Company. ASIN B0006EVC7K. 
• Dougherty, Richard (1966). In Quest of Quality: Hormel's First 75 Years. Austin, Minnesota: Geo A. Hormel & Company. ASIN B0006BOWUW. 
• Cooper, Jake (1988). Lessons of the P-9 strike. San Francisco, CA: Socialist Action. 
• Genoways, Ted (2014). The chain: farm, factory, and the fate of our food. ISBN 9780062288752. 
• History Committee (Mower County,Minn.) (1984). Mill on the willow: a history of Mower County, Minnesota. [Mower County, Minn]: [History Committee]. 
• Knowlton, Richard L; Beyma, Ronald (2010). Points of difference transforming Hormel. Garden City, NY: Morgan James Pub. ISBN 9781614481126. Retrieved 2015-04-13. 
• White, John W. (1986). The Great Yellow Fleet: A History of American Railroad Refrigerator Cars (First ed.). San Marino, Calif: Golden West Books. ISBN 9780870950919. 

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