HORMEL FOODS

BRAND NAME COOKING WITH HORMEL

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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 Hormel Story

What is in all likelihood the formula most dependable for a man or a business to make a success is to have a product which people like and come back for more.

"When George A. Hormel, living in retirement in Beverly Hills, came to Austin, Minnesota, to visit the packinghouse business which he founded in 1891, was asked how he managed to survive that period of "panic" and "hard times" of the early '90s, reflected several seconds before he answered. Then he said, "I think it was the sausage."

It was hard times, and there was little money to spend. But the re-orders for that new Hormel sausage began to come in. Mr. Hormel took a handful of them to his banker, and the banker extended the note.

To those who want integrity and capability added to the formula of the first paragraph, let them realize there is a large portion of those attributes embedded therein. Mr. Hormel was a man of great capability as a meat-packer, and he also was of scrupulous integrity.

A lack of integrity revealed his integrity. One evening, 33 years after he had begun the business, his son Jay C. Hormel and H. H. (Tim) Corey, a young "comer" with the company, called at his home. "Dad," said Jay, "we're broke. We've been over the accounts. So and so (naming a trusted accountant) has stolen $1,500,000." The father told the two young chaps to go to bed--they'd talk about it in the morning.

The news was true. The company was "broke." All the cash it had was gone. There was no money to pay for livestock, wages or other current obligations.

But the committee of Chicago bankers before whom Mr. Hormel was called, loaned him all the necessary money. One of the bankers said, "We were persuaded by his record of capability." Another said, "We liked his forthrightness and integrity." It was their packinghouse temporarily. Where could they get another man as good to run it?

By 1928, when George's only son Jay was made president, and "George A." retired to California (to read, to write, to play golf, to enjoy his judgment as to the future of the area and its real estate), there were 1,800 employees of Geo. A. Hormel & Co. When his father passed away in 1946, Jay became chairman of the board. By then there were 5,000 employees.

Jay Hormel was an innovator. In the 25 years he actively directed the company, he initiated many new successful things, for example the canning of meats, national consumer advertising, and advanced employment policies which attracted a great deal of national attention and publicity.

A great many people, for example, know the Hormel company for its innovation of steady, year round employment. Possibly more know the company for an innovation in his time, SPAM. You can find the product in any supermarket in America, on the shelves of native stores in Abyssinia.

But in World War II SPAM was the butt of all Army jokes. The sorely tried publicity man went to Mr. Hormel and said we should explain that only a small portion of the canned luncheon meat which the Army gets is our SPAM. The later in reality was out of a six-pound can, made to Army formulas, and cooked enough to make it safe to preserve on hot Pacific islands for a long time. "Don't say anything about it," said Jay.

Well, it turned out that the derisive jokes about SPAM must have been mostly in fun. When the lads got home, they must have ordered SPAM in grocery stores too, for year by year the sales have risen. Hormel has sustained its initial head start against all its rivals as the leading manufacturer of 12-ounce canned pork shoulder meat, to which Hormel adds ham.

Hormel began its canned meat division by canning ham. It was the first to overcome all the problems involved and make a commercial success of canned ham. This lead to SPAM and other canned pork products. The new market created around the world was immense. At last, a way to keep pork so that it would stay fresh and sweet! The Hormel Company is proud of the service here done to the demand side of the supply and demand equation which determines the price for the producer's pig.

Jay Hormel also was a long range planner. One of the things he did early, long before his heart illness that cost him death in 1954, was to see that he had a "good man on every base" and to arrange through trusts for basic management of the company to lie with trained packinghouse men. His planning has born fruit, as witness the fact that today the company employ's 9,000 persons.

At the top, as chairman of the board, is H. H. (Tim) Corey, and R. F. Gray, as president.

Tim Corey came to the company in 1920, following a term as roustabout in the Wyoming oil fields. Before that he had served, with the rank of captain, in World War I. He was captain of the University of Nebraska football team in 1916, and was all-American choice of Walter Eckersall for his play as lineman. Having lost both parents while he was still in high school, young Tim went to work in a butcher shop in Green Bay to put himself through school. After joining the Hormel company, he earned steady advancement through many, varied responsibilities. Mr. Corey is a director and for four years was chairman of the American Meat Institute. He is also a director of the National Live Stock and Meat Board.

Bob Gray, too, started at the bottom of the business--in 1927. His first assignment at Hormel was the company's training field for salesmen--driving the so-called peddler sausage truck. Over the years, he developed a broad and keen grasp of company operations and was made president in 1955.

Addressing a meeting of more than 750 stockholders in the big main office of the company at Austin recently, Mr. Corey said, "It is our problem to make meats attractive. Along with the attractiveness must come uniformity and quality, better advertising, new ideas for distribution, and above all, a meritoriousness of product that gets it onto the store shelves and into the homes of consumer."

These words are in character to those knowing the history of the Hormel Company. Indeed, in realization that it ahs a positive need and a function to improve all the time, the Hormel company is active in research and development. Many of the fruits of this dedication are showing up.

For example, the Hormel company ahs built its sleep tunnel by which hogs, lambs and calves are given anesthesia by gas so that none of the shock and pain of shackling, and hoisting and sticking is known to them. The hog anesthesia "immobilizer" was built at Austin in 1952. The calf and lamb sheep tunnels were built in 1959. Cattle are also dispatched by approved humane methods. All the Hormel operations are in readiness for a law passed by Congress, effective July 1, 1960, by which humane processing is required of packing houses.

In the latest financial statement to stockholders, the Hormel Company reported that its sales tonnage had exceeded a billion pounds for the fourth consecutive year. Dollar sales for the year were more than $373,000,000--yet the net profit per dollar of sales was only 8/10ths of 1 percent--typical of the close margin of operation of the industry and the year."