Oscar Mayer Foods Corp. History

Company History:

Oscar Mayer Foods Corp. is the maker of one of the most venerable and successful food brands currently available on supermarket shelves. The company's sliced meats and other products are sold across North America and in parts of South America and Asia. Oscar Mayer's product line includes a wide range of popular meats, including hot dogs, bacon, and prepackaged lunch combinations. In the early 1990s, the company also tried its hand at the restaurant business, in an attempt to find additional outlets for its food products. Oscar Mayer, now part of the Kraft General Foods empire, grew from a modest family business into an international food giant, maintaining a firm presence in both the American refrigerator and the American consciousness.

Oscar F. Mayer, the company's founder, arrived in America from Bavaria in 1873 at the age of 14. Settling in Detroit, his first job was as a butcher boy in a meat market. Mayer moved to Chicago three years later, where he continued his apprenticeship in the meat industry, working in the stockyards of Armour & Co., as well as in a series of retail meat operations over the next few years. By 1880, Mayer had learned the meat business from top to bottom. In hopes of starting a family business, he wrote home suggesting that his brother Gottfried learn the art of sausage-making as an apprentice in Germany. Gottfried followed his older brothers advice, and in 1883 the two Mayers rented the failing Kolling Meat Market on the north side of Chicago and opened a shop of their own. On its first day of operation, the store sold $59 worth of meat.

When their lease expired in 1888, the Kollings refused to renew it, hoping to get back into business themselves by exploiting the solid reputation the Mayers had secured for the store. Learning from this experience, the Mayer brothers borrowed $10,000 and bought their own building, with room for living quarters, just a few blocks away and reopened without much delay. The new market was an immediate success, and neighborhood residents flocked to the shop for its old world sausages and traditional meat cuts. By this time, a third brother, Max, had joined the operation.

By the turn of the century, Oscar Mayer's reputation had spread well beyond the immediate neighborhood, and the company had at least 40 employees. Salesman were delivering Mayer sausages and other meats to every part of Chicago and even out to the suburbs. In 1904, the company adopted the "Edelweiss" trademark for some of its products, including bacon, linked sausage, and lard. Although branding was not a common industry practice at the time, the Mayers reasoned that a name and logo would help customers notice the difference between their meat and the lower quality products sold by others. Two years later, the company became part of the federal meat inspection program. Another Mayer, Oscar's son Oscar G. Mayer, joined the team in 1909 following his graduation from Harvard. By this time, the company had about 70 employees on its payroll.

In 1911, the company was incorporated as Oscar F. Mayer & Bro., with assets totaling $300,000. Every phase of the operation expanded at a brisk pace over the next several years. Production was decentralized into different departments, and the sales territory grew to include areas well outside of Chicago. By 1912, the company was using its first automobile, a Ford Model T, on one of its 20 sales routes. Cardboard cartons for packaging sausages were also introduced around that time. Gottfried Mayer died in 1913, and the remaining family members continued to press forward, as sales reached $2.69 million that year. The company began spending significant sums on advertising around 1915, when $2,000 was spent on materials for a window display. Newspaper advertising was added two years later.

Sales at Oscar Mayer grew to $11 million by 1918. About a third of that total represented sales to the government for feeding World War I troops. That year the Edelweiss brand name was discontinued, and a new one, "Oscar Mayer Approved Meat Products," took its place. The company was producing and selling 93 different meat products by this time. A major expansion project was begun in 1919, when the company purchased a farmers' cooperative meat packing plant in Madison, Wisconsin, at a bankruptcy auction. This gave Oscar Mayer a reliable source of raw materials for the Chicago plant. Now a two-plant operation, the company's corporate name was changed that year to Oscar Mayer & Co.

Oscar Mayer continued to be a marketing innovator over the next couple of decades. In 1924, the company introduced packaged sliced bacon under the Oscar Mayer brand name. A Milwaukee branch was also opened that year. By 1928, the company had 25 different varieties of "Approved Brand" sausages on the market. That year, Oscar F. Mayer was elected to chair the board, and Oscar G. Mayer was named company president. The company's biggest marketing coup came the following year, when it began placing yellow paper bands bearing the Oscar Mayer brand name on every fourth hot dog. Along the way, the tag line "Meats of Good Taste" was also added to the company's brand identifiers.

By the early 1930s, Oscar Mayer had staked out sales territories reaching all the way to the East Coast, including Cleveland, Detroit, Buffalo, and Rochester, New York. Developments over the next few years included the introduction of the skinless wiener and the unionization of the company's employees. In 1936, Little Oscar and his Wienermobile--a minute chef in a hot dog-shaped vehicle--made their first appearance. They would be a part of Oscar Mayer promotions for decades, appearing at parades and openings or giving cooking demonstrations. 1936 also marked the introduction of the "Yellow Band" trademark on certain Oscar Mayer products.

During World War II, Oscar Mayer was again a major provider of food for the armed forces. The 1940s were also a period of technological innovation at the company. A formal research program was initiated in 1941, and the following year quality control departments were added. Beginning in 1943, the company unveiled a series of technological breakthroughs in the areas of packaging and distribution. The first of these, launched in 1944, was the "Kartridg-Pak," a way of automatically banding hot dogs together in bunches resembling cartridge belts. Kartridg-Pak was so successful that a subsidiary was soon formed to market the machinery to the rest of the industry. In 1946, "Sack-O-Sauce," a separate package of sauce to be used with canned meats, was introduced. Two years later, the company brought out its "Slice-Pak" line, lunch meats sold in vacuum-sealed clear plastic packages with metal bases. Meanwhile, the company was expanding its production capabilities and geographic scope with the 1946 leasing and subsequent purchase of the Kohrs Packing Company in Davenport, Iowa, and the acquisition of F. G. Vogt & Sons, a Philadelphia meat processor, in 1948.

By the beginning of the 1950s, Oscar Mayer's annual sales were over $150 million. In 1951, the Southern California Meat Packers plant in Los Angeles was purchased, giving the company a coast-to-coast presence for the first time. Further technological progress and territorial growth followed. The company began intensive research on Saran vacuum packaging around 1953, and by the middle of the decade its Slice-Pak line of products was a familiar sight on grocery store shelves. Oscar F. Mayer died in 1955 at the age of 95. His son, Oscar G. Mayer succeeded him as chairperson, and grandson Oscar G. Mayer, Jr. was elected company president. In 1957, a new nine-story building was completed in Madison, and this became the company's corporate headquarters. By 1958, the company's seventy-fifth anniversary, Oscar Mayer was producing over 200 varieties of sausages, lunch meats, and smoked and canned meat products.

The early 1960s were boom years for Oscar Mayer. The company continued to improve its packaging techniques through the decade, with the introduction of Saran vacuum-seal packs for wieners and Smokie Links in 1960, and for bacon two years later. Oscar Mayer's entry into international business came in 1961, when it purchased a Venezuelan meat processor, Venezolana Empacadora. By this time, the company's U.S. distribution network included facilities in Tampa, Dallas, Kansas City, and Denver, and sales had grown to $260 million. In 1963, Oscar Mayer's famous "Wiener Jingle" made its first appearance. The song, which began, "Oh, I wish I were an Oscar Mayer wiener. That is what I'd truly like to be," went on to become one of the longest-running and most popular jingles in advertising history.

During the 1960s, over 30 Oscar Mayer sales distribution centers were opened throughout the United States, and capital spending averaged $8.5 million a year during that period. Among the company's major investments were the 1965 acquisition of a pork processing plant in Perry, Iowa, and the construction of a pork processing plant in Beardstown, Illinois, begun the same year. Oscar Mayer also began buying national network television advertising around that time, and in 1968 the company put its ads on prime time, sponsoring the "Gentle Ben" television series. Meanwhile, another change in leadership accompanied the 1965 death of Oscar G. Mayer. Oscar G. Mayer, Jr. was elected to the chairmanship, and P. Goff Beach was named company president. Before the decade was over, a new subsidiary, Scientific Protein Laboratories, was created to manufacture chemicals and pharmaceuticals using the animal byproducts of Oscar Mayer's processing operations.

Oscar Mayer sustained its momentum into the 1970s. In 1970, the company acquired the 100-year-old Claussen Pickle Co., and the following year a new processing plant was opened in Nashville. The company's common stock was listed on the New York Stock Exchange for the first time in 1971 as well. Around this time, Oscar Mayer began to increase its role in international business. A 25 percent interest in Prima Meat Packers, Ltd. of Tokyo was purchased in 1972, and four years later, the company bought into General De Matederos, a Spanish meat operation that was subsequently renamed Oscar Mayer, S.A. Another leadership change took place in 1973, when Beach was elected chairperson. Harold M. Mayer became vice-chairperson, and Robert M. Bolz took over the company's presidency. That year, the second of Oscar Mayer's wildly popular commercial jingles--"My bologna has a first name, it's O-s-c-a-r. My bologna has a second name, it's M-a-y-e-r," made its initial appearance in a television ad called "Fisherman."

Sales at Oscar Mayer topped the $1 billion mark for the first time in 1975. In 1977, the company launched a major advertising blitz that included a return to print advertising, tied in with a variety of promotions involving premiums, coupons, and other gimmicks. Another reshuffling of executive titles took place that year as well, in which Jerry M. Hiegel was named president, Bolz vice-chair, and Harold M. Mayer chairperson of the executive committee. Along the way, several new products were introduced, some more successfully than others. 1978's entry was "The Big One," a quarter-pound hot dog marketed across the United States. Oscar Mayer went into the restaurant business in 1979, opening the first of its "Rocky Rococo" chain of pizza parlors near Minneapolis.

As the 1970s closed, Hiegel, now CEO, led a diversification program that resulted in the acquisitions of processed turkey leader Louis Rich, Inc., and of Chef's Pantry Inc., a food service company with mainly industrial customers. In 1981, Oscar Mayer was bought by General Foods Corporation, and its name was changed to Oscar Mayer Foods Corp. After Philip Morris Companies, Inc. acquired both General Foods in 1985 and Kraft Inc. in 1988, Oscar Mayer became part of Kraft General Foods, Inc., the subsidiary created by combining the two food giants. For much of the 1980s, Oscar Mayer was the star performer for General Foods, largely on the strength of its Louis Rich business, whose revenue doubled to $600 million between 1979 and 1987.

After a series of product flops, however, sales began to slow up a bit by 1988. The company even trotted out the old Wienermobile in an attempt to rev up publicity. In 1989, Oscar Mayer broke out of its slump with the introduction of Lunchables, prepackaged lunch combinations that included meats, cheeses, and crackers. Lunchables were awarded a Sial d'Or medal by the industry press and were so successful that imitations by other companies quickly hit the stores. In spite of the waves the Lunchables were making, Oscar Mayer's sales remained sluggish into the 1990s. Although revenue reached $2.5 billion in 1991, this fell short of the company's stated goal for the year. Turkey products remained popular, but an increasingly health-conscious American public was becoming wary of fatty meat products containing preservatives. Oscar Mayer countered by introducing low-fat and low-sodium products, such as its Healthy Favorites line. Unfortunately, even turkey sales began to decline in 1992.

As the 1990s continued, Oscar Mayer continued searching for ways to stoke the American appetite for processed meat. In 1992, the company launched Hot Dog Construction Co., a chain of fast food establishments operated at transit stations, turnpike stops, amusement areas, and other such sites. A new subsidiary, Branded Restaurant Group, Inc., oversaw the operations. In 1993, the company introduced Oscar Mayer Big & Juicy, a line of extra large hot dogs available in five flavors, including Hot n' Spicy and Smokie Links. Later that year, Robert A. Eckert was named president of Oscar Mayer, replacing John D. Bowlin, who had left to join Miller Brewing Co. as president and chief operating officer.

With over more than a century in the meat business, Oscar Mayer has consistently ranked among the industry's leaders in product, packaging, and marketing innovation. Although the meat industry as a whole has faced enormous challenges in the mid-1990s, the company had a remarkable record when it came to generating big ideas at crucial moments. As long as packaged meat continued to find its way into America's lunchboxes, a large share of that meat was likely to be Oscar Mayer's.

Principal Subsidiaries: Branded Restaurant Group Inc.

Further Reading:

• Dolan, Carrie, "If You Really Cut the Mustard, You Will Relish This Job," Wall Street Journal, July 7, 1992, p. 1A.
• Ginsberg, Stanley, "The Wurst is Yet to Come," Forbes, March 2, 1981, p. 40.
  Links with the Past: A History of Oscar Mayer & Co., Madison, Wis.: Oscar Mayer & Co., 1979.
• Mayer, Oscar G., Jr., Oscar Mayer & Co.: From Corner Store to National Processor, New York: The Newcomen Society in North America, 1970.
• "Nothing If Not Resourceful," Forbes, April 14, 1980, p. 77.
• Ruggless, Ron, "Oscar Mayer Expands Hot Dog Construction Co.," Nation's Restaurant News, August 22, 1994, p. 7.

Source: International Directory of Company Histories, Vol. 12. St. James Press, 1996.

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