Hormel Article

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Hormel Foods Corporation
Public
Traded as NYSEHRL
S&P 500 Component
Industry Food processing
Founded 1891; 127 years ago (1891) (as George A. Hormel & Company)
Founder George A. Hormel
Headquarters Austin, Minnesota, U.S.
Number of locations
40 Manufacturing & Distribution Facilities
Areas served
80 countries
Key people
James Snee [1] (Chairman, President, CEO)
Products Deli meat, ethnic foods, pantry foods, Spam
Brands
Increase US$ 443.3 million (2018) [2]
US$ 4.661 billion (2018) [2]
Total assets US$ 7.830 billion (2018) [2]
Number of employees
20,000 (2018) [2]
Divisions Grocery products
Refrigerated foods
Jennie-O turkey store
Specialty foods
International
Website hormelfoods.com

Hormel Foods Corporation is an American food products company founded 1891 in Austin, Minnesota by George A. Hormel. Originally focusing on the packaging and selling of ham, SPAM, sausage and other pork, chicken, beef and lamb products to consumers, by the 1980s Hormel began offering a wider range of packaged and refrigerated food brands. The company changed its name to Hormel Foods in 1993. Hormel serves 80 countries with brands such as Applegate, Columbus Craft Meats, Dinty Moore, Jennie-O and Skippy. In 2018, the company reported annual revenues of 4.6 billion dollars.

History

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.

The building in which George A. Hormel started his business. Preserved at the Mower County Fairgrounds in Austin.

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. [3] 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. [4] He opened George A. Hormel & Co. in the northeast part of Austin in an old creamery building [5] on the Cedar River. [6]

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. [7] 

In 1901, the plant was expanded and the business was incorporated. [8] The first directors were A.L. Eberhart and the four Hormel brothers: George, Herman, John and Ben. [9] 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]:64–65 The name Dairy Brand was first used in 1903. [10]:68 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. [10]:68

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. [10]:79 That same year Hormel bought Alderson's Mill and began selling Hormel Peerless Minnesota flour nationwide. [10]:85 Hormel products began appearing in national magazines such as Good Housekeeping as early as 1916. [11] In 1917, George's son Jay C. served time in the military during World War I, reaching the rank of lieutenant by 1918. [12]

The Hormel plant circa 1920

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. [12] 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, [13]:90–103 reportedly with the mantra “Originate, don't imitate." [14] In 1926, the company introduced Hormel Flavor-Sealed Ham, America's first canned ham, [15] and added a canned chicken product line in 1928. [12] 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. [13]:61–62

Hormel Chili and Spam were introduced in 1936 and 1937 respectively. [16] [12] In 1938, Jay C. Hormel introduced the "Joint Savings Plan" which allowed employees to share in the proceeds of the company. [17] 

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). [18] [19] [20]

By 1942, George and Jay established The Hormel Foundation to act as trustees of the family trusts. [21] The Foundation funded the Hormel Institute at the University of Minnesota, initially started with a study of the food value of soybeans. [22] The Institute's scope later grew towards studying nutrition, animal diseases and food technology. Benjamin F. Hormel, brother of George A., retired in 1941 after completing 50 years of service. [23] Hormel's production increased to aid in World War II and 65% of its products were purchased by the U.S. government by 1945. [10]:77–78 Founder George A. Hormel died in 1946 in California where he had lived in retirement. [24] Jay C. then became chairman of the board, H.H. Corey became president, and R.F. Gray became vice-president. [25] Hormel acquired the Fremont Packing Company in 1947. [26]

Jay C. Hormel died in 1954. [27] Corey was named chairman of the board and R.F. Gray was elected president the following year. [28] 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. [29] [10]:270

This Is Hormel (1964) hot dog segment

 Little Sizzlers sausages were introduced in 1961 and Cure 81 hams were introduced in 1963. [16] 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. [10]:265 Gray replaced Corey as chairman of the board upon the latter's retirement in 1965, and M.B. Thompson became president. [30] 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. [13]:156–157 In 1972, Holton became CEO. [31] That same year Richard Knowlton was elected as president, [32] the first Austinian to hold that post since Jay Catherwood Hormel. [33] [34] 

Holton continued as CEO until 1981 and then this duty was also passed to Knowlton. Not-So-Sloppy-Joe Sloppy Joe sauce made its debut in 1985. [35] In 1986, Hormel Foods acquired Jennie-O Foods [36] and also began an exclusive licensing arrangement to produce Chi-Chi's brand products. [37] 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, [38] created by former Miss America Phyllis George, in 1988. That same year, Hormel Foods also introduced microwave bacon. [13]:193–199 In mid-1984, Hormel introduced the Frank 'n Stuff brand of stuffed hot dogs. [13] [39] [40] [41] [42]

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. [43] 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. [44] 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. The strike ended in June 1986, after lasting 10 months.

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. [38] Production facilities were opened in Osceola, Iowa in 1996.

The SPAM Museum in Austin, Minnesota, was opened in 2001. [45] That same year, Hormel Foods acquired The Turkey Store, the business was combined with Jennie-O Foods to form Jennie-O Turkey Store. [36] 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. [46] Ettinger 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. [47] 

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. [48] In July 2009, Hormel and Herdez del Fuerte created the joint venture MegaMex Foods to market and distribute Mexican food in the United States. [49] 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. [50]

In 2010 MegaMex Foods, a joint venture of Hormel Foods and Herdez del Fuerte, acquired Don Miguel Foods. [51]

In 2011, Hormel Foods announced a 2 for 1 stock split. [2] Hormel Foods also acquired Fresherized Foods, makers of Wholly Guacamole, as part of their MegaMex joint venture. [52]

In 2013, Hormel Foods 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. [53]

In May 2015, Hormel revealed it would acquire meat processing firm Applegate Farms for around $775 million, expanding its range of meat products. [54] The company also announced James P. Snee was elected to the position of president and chief operating officer in October 2015. [1]

In 2015, the Hormel Health Labs division of Hormel Foods launched its Hormel Vital Cuisine line of packaged ready to eat meals, nutrition shakes and whey protein powders geared towards cancer patients and made available for home delivery. The line was developed in concert with three parties, as "Hormel brought food formulation, packaging and shelf stability knowledge, ( chef de cuisine) Ron DeSantis brought taste and texture expertise, and the Cancer Nutrition Consortium offered the nutritional framework." [55]

Also in 2016, Peak Rock Capital purchased the Diamond Crystal Brands Inc. unit, purchased by Hormel in 2002 for $155 million from Imperial Sugar. [56] [57]

Jeffrey Ettinger retired as CEO, effective 30 October 2016. Ettinger remained Chairman of the Board. President & COO James Snee assumed the role of CEO effective 31 October 2016. [58]

In late 2016, Hormel sold Clougherty Packing, owner of the Farmer John and Saag's brands, to Smithfield Foods, with the sale closing in January 2017. [59]

In October 2017, Hormel announced it would acquire deli meat company Columbus Manufacturing for $850 million. [60]

Corporate responsibility

According to Triple Pundit, Hormel Foods began CSR reporting in 2006. [61] The company has been included in Corporate Responsibility magazine's list of the "100 best corporate citizens" for 10 consecutive years. [62]

The company made an initial three-year commitment to deliver 1 million cans to in-need families in Guatemala. [63] 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). [64]

In 2016, 2017 and 2018, the company was named to the Human Rights Campaign's Best Places to Work for LGBT equality. [65] [66] [67]

Allegations of animal abuse

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 [68] 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 18 August 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." [69] 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. [70]

In 2015, after an undercover investigation by Compassion Over Killing at a Minnesota processing plant, Hormel Foods announced it was "bringing humane handling officers to a Quality Pork Processors Incorporated facility to ensure compliance with its own animal welfare standards." [71] It has also told QPP to provide extra training, enhance compliance oversight and increase third-party auditing. According to Reuters, "in one scene of the video, pigs covered in feces or pus-filled abscesses are sent down the plant’s conveyor belt. At one point, a knife is used to cut open abscesses on dead pigs." [71] In response to this QPP announced plans to strengthen its video monitoring system and improve animal handling equipment. [71]

In 2017, Mercy For Animals released undercover video footage of pigs being abused at a Hormel pork supplier, with piglets having their testicles ripped out and tails cut off without any anesthetic, piglets left to suffer from untreated illness or injuries, and mother pigs crammed into gestation crates unable to move. [72] In response, Hormel temporarily suspended its buying from the supplier. [72] A previous video released in 2015 by another group known as Compassion Over Killing featured footage filmed undercover of hogs being beaten by employees at a Quality Pork Processors plant in Austin, Texas, who are exclusive suppliers to Hormel. [73]

See also

References

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Further reading

External links