FAIRMONT FOODS

BRAND NAME COOKING WITH FAIRMONT FOODS

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HISTORY

The following is an excerpt from the book Ideas that Became Big Business by Clinton Woods. Published by Founders, Inc. Baltimore, MD, 1959, 414 pages.

Buy this book: Ideas That Became Big Business

The Fairmont Foods Story

Americans take it pretty much for granted that they're going to find butter, all cubed and cartoned, any time they go to the market. But to 40 residents of the tiny Nebraska community of Fairmont back in 1884, things just weren't that simple.

"They had just gone into the creamery business--a one-man, one-churn operation--and found that making butter to sell was a tough proposition. These 40 townspeople and farmer-producers were the original stockholders in Fairmont Foods Company, one of the nation's largest food manufacturers today.

The company originally was organized by a group of promoters interested in creamery equipment. They came to town, sold $5,000 worth of stock, collected for the machinery and then moved on. The initial years were lean ones. Losses piled on losses and operations had to be limited to the spring and summer due to the lack of cream the rest of the year.

By 1887 the stockholders were ready to give up and voted to turn the ailing creamery over to anyone who would assume the liabilities. There was some doubt if anyone would. But three enterprising young Fairmont men saw the faltering organization's potentialities and picked up the $4,500 tab.

They were Wallace Wheeler, an implement dealer, Joseph Rushton, a lawyer and E. F. Howe, a buttermaker by trade. A fourth, Edgar T. Rector, joined the infant company as an assistant buttermaker in 1891. To their diversification of interests can be traced one of the reasons Fairmont is a "giant" in the industry today. There was a lot of spadework to be done in a lot of different directions and these men set out to do it.

Each served as the company's president, beginning with Mr. Wheeler, who headed the firm from 1884 to 1897. Mr. Rushton was president from 1897 to 1921, Mr. Rector from 1921 to 1933 and Mr. Howe from 1933 to 1940. In the 1880's, it was the problem of the creamery business, still in its infancy, to struggle not so much to sell its product as to secure a sufficient supply of raw materials.

From the 507 pounds of butter Fairmont churned in February, 1886, consumer demand sent production sky-rocketing to 210,000 pounds in 1888. To meet this demand it was out of necessity, not charity, that the early Fairmont route drivers preached the value of farm diversification--dairying as an integral, and profitable part of farming. The influence of this company policy is still seen in Nebraska's agricultural economy. At first Fairmont sent these route drivers out to pick up whole milk from the farmers.

A few years later a skimming station was built in town and farmers brought their milk there to have it separated, taking the skim milk back home to feed their livestock. But the farmers thought this was too much trouble. About 1900, the hand cream separator appeared on the scene. The farmer could separate the milk right on his farm and the route drivers picked up the cream. Because this method was more convenient, Fairmont pioneered in a time payment plan for the equipment.

Few Nebraska farmers could afford this new device so Fairmont offered its producers hand separators on a contract basis. Part of each month's cream check was applied on the purchase price and by 1905, Fairmont had more than $50,000 in farmers' notes on its books. The company realized its first profit in 1889 and began to expand. Plants were added in Crete, Tobias, Friend, DeWitt, Fairbury, Geneva, Milford, Hebron--all small Nebraska towns--and finally in 1903 in Omaha, where the company's general offices have been located since 1907.

Fairmont continued to grow and between 1909 and 1915 plants and retail outlets were opened in Pittsburgh, Scranton, Buffalo, Columbus and Boston. In 1959 the company had 85 plant and branch locations in 22 states and employed more than 3800 persons. Physical expansion hasn't been Fairmont's only forte however. Although butter remained as the company's chief product for more than 50 years, others have been added consistently.

Diversification of products began as early as 1889 with eggs as the first addition followed by ice cream, poultry, milk and cottage cheese. In 1926, Fairmont offered an extensive line of frozen fruits to the public for the first time. The company still pursues this policy of diversification. Recent additions to the product line include Dip 'n Snak, a cheese-like party dip, in 1958 and in 1959 Fairmont acquired Kitty Clover, a potato chip manufacturing firm.

Since its earliest days, Fairmont has always been a front-runner in the food industry.  Fairmont was the first to ship a tub of butter using parchment paper as a protective inner lining, revolutionary in 1888, and in 1908 the company became one of the first creameries to pack and market frozen eggs for bakeries.

As early as 1902, Fairmont had a laboratory where important technological advances in producing and processing milk and milk products were developed. When Mr. Rushton was president in 1920 he hired a mechanic to build what is believed to have been the first refrigerated ice cream delivery truck.

Fairmont also was the first, or among the first, to use the coupon system whereby the farmer received a coupon check, to be redeemed by the company, each day he sold cream. This was the forerunner of daily cash payments. Then as now the greater portion of the company's income went back to the producers.

The company sells one hundred million dollars' worth of products each year; in 1958 became the first Nebraska-based manufacturer to be listed on the New York Stock Exchange.

At a new plant in Minneapolis, Fairmont processes 20 thousand gallons of milk per day, with only seven plant employees. Company engineers have been at work on plans for the automation of all Fairmont production plants.

It's been a long way from Fairmont, Neb., to Fairmont, U.S.A., and the Fairmont story is still an unfinished pioneering saga."