Hunt-Wesson, Inc. History

Address:

1645 W. Valencia Drive
Fullerton, California 92633-3899
U.S.A.

Telephone: (714) 680-1000
Fax: (714) 449-5100

Wholly Owned Subsidiary of ConAgra, Inc.
Incorporated: 1890 as Hunt Brothers Fruit Packing Company
Employees: 8,000
Sales: $2.3 billion (1995)
SICs: 2033 Canned Fruits & Vegetables; 2032 Canned Specialties

Company Perspectives:

Across the board--ranging from the multinational strength of its parent company through to the strong franchise of its individual brands--Hunt-Wesson is an innovative and ever-growing company committed to maintaining its leadership position in the food industry. To assure that leadership position, the company continues to identify ways to be the highest quality, most cost effective producer utilizing the latest in manufacturing technologies and systems. To keep focused, Hunt-Wesson continually benchmarks its products and business practices versus the best of its competition. Over the years, the introduction of new and improved products has driven the company's success. In addition, with the support of ConAgra, the company continues to pursue and integrate acquisitions which make good business sense for the future.

Company History:

Hunt-Wesson is one of the nation's largest and most successful food companies. It markets and manufactures a wide range of brand name grocery and foodservice products through its independent operating companies: La Choy / Rosarita Foods Co., Orville Redenbacher / Swiss Miss Foods Co., Hunt Foods Co., and Wesson / Peter Pan Foods Co. Hunt-Wesson operates over 20 manufacturing plants, 14 distribution and customer service centers, and 45 grocery retail and foodservice sales offices in 24 states and Canada. Hunt-Wesson itself is an independent operating company and wholly owned subsidiary of ConAgra, Inc., a $24 billion diversified international food company.

19th-Century Origins

In 1890 brothers Joseph and William Hunt incorporated their company as the Hunt Brothers Fruit Packing Company in Santa Rosa, California. At a time when food products were delivered to market by horse-drawn carriage, they established a reputation for quality and freshness. As their business grew, they relocated to a larger headquarters in Hayward, California.

Nearly 45 years later in Fullerton, California, a young entrepreneur named Norton Simon bought an inactive orange juice canning plant and in 1934 started Val Vita Food Products. Starting with annual sales of only $45,000, he built the business into a $9 million company in less than a decade, becoming something of a star in the California canning business in the process.

In 1943 the Hunt Brothers Packing Company merged with Norton Simon's Val Vita Food Products to form a new company, Hunt Foods. The company was located in Fullerton and headed by Simon. Over the course of the next decade, Simon diversified and expanded the company by establishing a can-making plant and a glass plant and introducing new products. He achieved national distribution and launched innovative advertising and marketing programs. By the mid-1950s, Hunt Foods was nationally known. In 1956 it was renamed Hunt Foods and Industries to reflect the company's diversification.

Hunt-Wesson in the 1960s

In 1960 Hunt Foods merged with the Wesson Oil and Snowdrift Company, another leader in the food industry. By 1964, sales of the combined companies exceeded $400 million, and the company was renamed Hunt-Wesson Foods. In 1968 Hunt-Wesson Foods, Canada Dry Corporation, and McCall Corporation consolidated to form Norton Simon, Inc., a $1 billion corporation. While Norton Simon's headquarters were relocated to New York City, Hunt-Wesson's headquarters remained in Fullerton.

During the 1970s Hunt-Wesson continued to grow. It expanded its line of tomato and oil products. It introduced new products, including Manwich Sloppy Joe Sauce, Big John's Beans 'n Fixins, Snack Pack, and flavored tomato sauces. Acquisitions also played a significant role in Hunt-Wesson's growth. In 1976 it acquired the Orville Redenbacher Gourmet Popping Corn company. Hunt-Wesson sales topped $1 billion for the first time in 1979.

Starting in 1983, a series of important changes began for Hunt-Wesson. Norton Simon, Inc., was purchased by Chicago-based Esmark, Inc. Then in 1984, Esmark was acquired by Beatrice Companies, Inc., another Chicago-based company. The following year, Beatrice became a private company under the direction of the investment firm of Kohlberg, Kravis, and Roberts (KKR). It was renamed BCI Holding Company.

During this period of changing ownership, Hunt-Wesson continued to grow. It took on responsibility for other food businesses, including Peter Pan Peanut Butter, Swiss Miss, La Choy, and Rosarita. It developed a strong sales and distribution network, and sales topped $2 billion annually.

Acquisition by ConAgra in 1990

In 1990 the BCI Holding Company was acquired by ConAgra, Inc., a diversified food products conglomerate based in Omaha. ConAgra paid $1.36 billion to KKR for the three remaining Beatrice Divisions: Hunt-Wesson, Swift-Eckrich, and Beatrice Cheese. While the acquisition added $4.3 billion in sales, ConAgra also assumed $1 billion of BCI's debt and had to borrow heavily to finance the acquisition.

ConAgra had high expectations for Hunt-Wesson. ConAgra president Phil Fletcher was quoted in Prepared Foods as saying, "We see Hunt-Wesson as a very strong franchise. It has great potential." ConAgra required Hunt-Wesson to be more aggressive. In 1990 and 1991 Hunt-Wesson introduced 41 new grocery products and 33 new foodservice products. The most notable were Wesson Pure Olive Oil, the first major American brand of olive oil marketed nationwide, Wesson Canola Oil, and Wesson Lite No-Stick Cooking Spray. Two new sizes of plastic containers were introduced for Hunt's Ketchup, giving it the most extensive line of ketchup available in plastic containers.

Under ConAgra, Hunt-Wesson's businesses were organized into independent operating companies (IOCs) in 1991. The IOC philosophy was integral to the way ConAgra was organized and did business. Hunt-Wesson itself operated as an IOC with ConAgra as its parent company. At each of Hunt-Wesson's IOCs, brand management teams were made responsible for achieving the goals of the IOC business across all business areas, including marketing, manufacturing, technology / research and development, marketing services, and sales and business administration.

Hunt-Wesson was organized into four major IOCs and three smaller companies. The four major IOCs were La Choy / Rosarita Foods Co., Orville Redenbacher / Swiss Miss Foods Co., Hunt Foods Co., and Wesson/Peter Pan Foods Co. The three smaller companies were ConAgra Grocery Products Companies International, Hunt-Wesson Foodservice Sales Company, and Hunt-Wesson Grocery Products Sales Company.

Through its four major IOCS, Hunt-Wesson marketed and manufactured a wide range of shelf-stable grocery products. La Choy / Rosarita Foods was focused on ethnic foods. It included five major product lines: 1) La Choy Products, including bi-pack dinners, noodle entrees, chow mein noodles, fried rice, and fortune cookies; 2) Chun King Products, which included vegetables, dinners, sauces, and chow mein noodles; 3) Rosarita Products, a line of Mexican food that included refried beans, salsas and sauces, and taco and tostado shells; 4) Gebhardt Products, a line of spicy foods that included chili products, canned beans, and spices and mixes; and 5) Healthy Choice Soups, a non-ethnic line of low-fat canned soups.

The brand soon spread to virtually every grocery product category, and Hunt-Wesson was given the Healthy Choice line of low-fat soups, which were produced by the La Choy / Rosarita Foods IOC. Hunt-Wesson expanded the line by introducing new products, including Chicken Corn Chowder and Clam Chowder in 1995. Corporate standards for the Healthy Choice brand included less than 30 percent of calories from total fat, less than 10 percent of calories from saturated fat, and reductions in sodium and cholesterol where appropriate.

Another major IOC was the Orville Redenbacher / Swiss Miss Foods Co., which was focused on snacks and desserts. Its five major product lines were as follows: 1) Orville Redenbacher Popping Corns, including jarred and microwaveable products; 2) Swiss Miss Products, including hot cocoa packages and cannisters, apple cider mix, and premier cocoa mixes; 3) Orville Redenbacher Pop and Top Oil; 4) Swiss Miss Snack Pack Pudding Products; and 5) Snack Pack Pudding and Gelatin Products.

The IOC with the oldest heritage was Hunt Foods Co., with more than 100 years of history in tomato products. Its line of tomato products included canned whole, stewed, and diced tomatoes, tomato paste and sauce, ketchup, tomato juice, barbecue sauce, spaghetti sauce, Manwich Sloppy Joe Sauce, and Healthy Choice Pasta Sauce. In 1995 Van Camp's was acquired by Hunt Foods, adding such product lines as Van Camp's Pork 'N Beans, Wolf Brand Chili, and Beanee Weenee. Hunt's tomato products were traditionally Hunt-Wesson's biggest business.

Hunt-Wesson's fourth major IOC, Wesson / Peter Pan Foods Co., combined two brand leaders in the oil and peanut butter businesses. Operating in large and mature categories, the company has grown through product innovations and the introduction of new varieties. Its major product lines included Wesson Cooking Oils, Wesson No-Stick Cooking Spray, Peter Pan Creamy and Crunchy Peanut Butter, and Smart Choice Reduced Fat Peanut Butter Spread.

Continued Growth through New Product Development

Hunt-Wesson's growth has been driven by the introduction of new and improved products. A good example is the way Hunt-Wesson created an entire grocery products category from a single variety of popcorn. When Hunt-Wesson acquired Orville Redenbacher's Gourmet Popping Corn business in 1976, there was only one variety offered in a glass jar. In 1980 the company began exploring the possibility of a microwave product. By 1983 it introduced the first shelf stable microwave popcorn--Orville Redenbacher's Microwave Popping Corn. Hunt-Wesson was surprised when this product became an overnight success, eventually creating a completely new grocery products category: microwave snack foods.

Hunt-Wesson continued to expand the product category with new and improved products. In 1985 two new salt-free varieties of popcorn were offered. In 1987 the company was the first to offer flavored popcorns. Then, in 1989, with consumers looking for more healthful food options, Hunt-Wesson capitalized on the trend and offered the first "Light" popcorn, which was followed by "Smart Pop," an extra light version. Four years later Reddenbudder's Movie Theater popcorn gave consumers more popcorn choices. Movie Theater Butter became the best-selling item in this category. Hunt-Wesson soon thereafter introduced a "Light" version of Redenbudder's Movie Theater popcorn, and in 1995 flavored White and Golden Cheddar varieties of Redenbudder's was offered to the public. Popcorn cakes were also introduced in 1995.

An aggressive leader in grocery food products, Hunt-Wesson continued to seek ways to grow and expand its business in the mid-1990s. In 1995 it made three major acquisitions: Chun King, Van Camp beans and chilis, and Knott's Berry Farm jams. The Van Camp acquisition also included Wolf Brand chili products, and the Knott's Berry purchase also included jellies, preserves, salad dressings, syrups, and gift packs.

In 1995 Hunt-Wesson also named a new president, Dave Gustin, who was well-suited to provide aggressive leadership. He replaced former Hunt-Wesson president Al Crosson, who was promoted to president and chief operating officer of ConAgra Grocery Products Companies. Gustin was a veteran of the coffee wars between General Foods and Procter & Gamble in the 1970s. Then he was involved in the cereal wars against Kellogg in the early 1980s, followed by a stint at Frito-Lay where he was involved in the snack wars. As he told Brandweek, "Those war experiences taught me the incredible value of brands, because in each of those 'let the best man win' setups, it's almost always the case that the best brand wins."

The development of new products also remained a key component of Hunt-Wesson's plans for growth. With a new product development cycle of three to five years, Gustin explained, "I've also learned to constantly focus on where consumers are going, not where they are." One area that the company was focused on for the coming decade was "healthy, phenomenally good-tasting snacks." Gustin noted for Brandweek that Hunt-Wesson's pudding business had been growing 15 percent a year and was one of the company's fastest-growing businesses.

Gustin also planned to move the company from less emphasis on ingredients to more emphasis on finished, ready-to-eat products. "Everything that takes time is our enemy," Gustin said. "Our competition isn't other branded stuff in the supermarket--it's the restaurant business." With consumers more concerned about convenience and health, Hunt-Wesson's competition was seen to be coming from ready-to-eat foods from other sources. One new ready-to-eat product line that was in the works involved new recipes for Rosarita's slow-simmered beans line.

A third area of growth for Hunt-Wesson was ethnic cuisine. With its Rosarita line of Mexican grocery products, the company was positioned to expand the line to take advantage of what Gustin termed "a vastly under-developed" ethnic cuisine. Hunt-Wesson's La Choy and Chun King products gave it a very strong presence in the Chinese food business, with growth coming from the introduction of innovative new products. Another aspect of ethnic cuisines that Hunt-Wesson was looking at for growth involved combining healthy ingredients and product offerings with new and existing ethnic grocery products. In early 1996 Hunt-Wesson announced a new, branded concept for on-site foodservices to be called Terri-Yaki. It would use the company's La Choy products and could be a servery fixture or one element of a food court.

Snacking continued to be a major trend, and Hunt-Wesson planned to take advantage of the desire for healthy snacks by narrowing the gap between "the regular stuff and the good-for-you stuff," as Gustin described it for Brandweek. The company planned to introduce new varieties of popcorn-based snacks as one aspect of this phase of future growth.

Hunt-Wesson, along with ConAgra's other Grocery Products Companies, was expanding its grocery sales force. Hunt-Wesson in particular was reengineering its entire sales system by moving from a geographic system to one focused on specific accounts. According to Hunt-Wesson's president, Dave Gustin, in Brandweek, "Concentration in the grocery trade means only 25 accounts make up 50 percent of our volume." Also helping the company provide better customer service was a Grocery Products Service Center that was established in 1995 to support the services of the Hunt-Wesson companies and ConAgra Frozen Foods.

Principal Subsidiaries: La Choy / Rosarita Foods Co.; Orville Redenbacher / Swiss Miss Foods Co.; Hunt Foods Co.; Wesson / Peter Pan Foods Co.; ConAgra Grocery Products Companies International; Hunt-Wesson Foodservice Sales Company; Hunt-Wesson Grocery Products Sales Company.

Hunt-Wesson, Inc. History

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