MINUTE MAID

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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 Minute Maid Story

"Getting ahead in business today is much more than a combination of common sense and uncommon luck. To be successful, today's businessman must have Creative Ability and Administrative Skill, coupled with Character and Courage," says John M. Fox, dynamic 46-year-old president of Minute Maid Corporation.

"Those unfamiliar with the remarkable record of this young chief executive might be tempted to dismiss such advice as mere 'do as I say, not as I do' philosophy. But those who know the John Fox Story--employees, admirers and competitors alike--will agree each of these qualities makes up a definite chapter of his life.

Although born in England, John Fox, who was brought to this country as an infant, was a typical American youth who worked his way through college. After graduation from Colgate University in 1934, he joined IBM as a salesman and was soon made a branch sales manager. In 1943, he accepted a post with National Research Corporation and the next year was made Administrative Vice President.

It was here that an idea was born--an idea which John Fox was destined to foster and nurture into a multi-million dollar industry.

From experiments being conducted in high vacuum drying of penicillin and blood plasma, Fox became convinced that concentrated orange juice had marketing possibilities.

During the closing months of World War II, National Research organized Florida Foods Corp., with Jon Fox at the helm, and selected Plymouth, Fla., as the site of its pilot plant. The idea was to snag a $750,000 Army contract being offered to any firm which could produce an economical powdered orange juice.

The new Florida operation turned out a batch of orange powder acceptable to the army and the contract was won--with the stipulation the company would build its own processing facilities. To raise funds necessary for expansion and new construction, the company had to maintain its Army contract. Suddenly, however, in a wave of cutbacks, the contract was cancelled.

John Fox's character and determination were such that he refused to let this first blow kill his baby. He rushed to Washington. After being rebuffed by the whole Army hierarchy, he persisted, with patience and stubbornness, and eventually obtained permission to see the Chief in Charge of Subsistence--and was able to persuade him to reinstate the contract.

The stock was issued and eagerly grabbed up by a number of investors.

Fox picked up his check one hour after the A-bomb had fallen on Hiroshima--an explosion that he knew could signal the second cancellation of the Army's order. The Army did cancel, but this time Fox had stockpiled a minimum of capital and held priorities with which to build a plant and launch the business.

The idea was to sell orange powder on a retail basis with institutional concentrate as a sideline, but the powder producing process was quite expensive and highly technical.

Troubles and more troubles piled up in production. There was trouble with the refrigeration; motors, steam jets and votators didn't function. Screens clogged, drain lines plugged, nozzles and pumps were stopped up and electric storms caused nearly daily failure.

After many discouraging months of frustration, Fox decided to drop the powder production. With characteristic determination, he launched a program to enlarge and expand his concentrate operations.

That first season, in 1946, about 90,000 gallons of concentrate were produced. Despite sales of $374,500, the firm had lost nearly $80,000, although $30,000 of this was connected with the cost of organizing the company. Still, money had to be raised to begin production in the second packing season.

Each setback and seemingly insurmountable barrier demanded more and even more financial backing--headaches Fox surmounted because of his undying faith in the product. His sincerity of purpose and dedication to the promotion of concentrates had convinced far-sighted investors (such as J. H. "Jock" Whitney) to provide funds for the fluctuating organization.

By 1948, sales had reached a point which forced the company to allocate remaining inventories to the 77 distributors who handled Minute Maid orange juice in 30 Eastern and Midwestern states. The Minute Maid product was selling in some 16,000 retail stores and was being used by a great many institutions. Expansion was necessary.

Three more Florida concentrate plants--Leesburg, Bartow and Davenport--were added to the original Plymouth venture. Then, in 1953, Minute Maid bought a stock interest in Golden Citrus Juices, a concentrating plant in Fullerton, Calif., which provided the company with an additional source of supply for frozen lemonade, limeade, orange concentrate and other citrus products.

To assure steady fruit supplies, the company began buying Florida grove acreage and today its 25,000 acres make Minute Maid the world's largest grower of citrus.

Through all these formulative years, however, John Fox's idea and dram was pressured from all side. A large crop would cut raw fruit prices, but it also would cut prices at the retail level. A small crop would raise orange prices, and the resulting rise in retail price would drive customers away. Maintaining an equitable balance was always a delicate job.

By 1950 Fox placed his products in national sales and distribution. In 1954, he purchased the Snow Crop Division of Clinton Foods, which added to Minute Maid's frozen juice concentrates a complete line of Snow Crop Frozen fruits, vegetables and meats, in addition to Snow Crop juice concentrates and the Hi-C line of canned fruit drinks.

At this time, Minute Maid was doing an annual business of nearly $40 million a year while Snow Crop was doing $60 million annually. From a volume standpoint, the Minute Maid-Snow Crop combination then became one of the largest factors in the frozen foods industry.

It was the first of the post-war food companies to top $100 million in sales and to become a steady national advertiser. Things were looking good.

But the situation was due to change quickly. First there was the problem of integrating the Minute Maid and Snow Crop sales organizations into one smoothly working team.

Then, almost overnight, the froze concentrate market was flooded with a multitude of private label brands--enough to change the national brand to private label ratio from 70/30 to 30/70.

Crop surplusses developed, forcing down prices and hampering the frozen fruits and vegetable lines. High orange prices forced the company to take losses in raw material purchasing while sales were being slowed by expanding private labels.

Losses, in 1957, on the fruit and vegetable line persuaded Fox to abandon this particular "diversification program" and franchise the Snow Crop fruit and vegetable producing and marketing facilities to Seabrook Farms in New Jersey.

Other economy steps included moving the company offices from expensive Madison Avenue, building a national headquarters building in Orlando, Fla.; putting its own groves, along with other independent groves, into Florida Orange Marketers, Inc., a huge co-op that today supplies all of the company's needs for concentrate grade oranges; and, converting the company's crackerjack, but expensive, 150 man national field sales force into a network of individual brokerage firms and brokers.

Then on December 13, 1957, the big Florida freeze struck. At first it seemed that the whole industry was imperiled. As the cold weather lifted, Fox realized that the fluctuating citrus market was firm. Minute Maid products were forced into a year long program of rigid allocation.

New advanced processing machinery, much of it developed by the company's own Research and Development Division, made possible use of freeze-damaged fruits--formerly considered lost to concentrate purposes.

In view of the freeze, Minute Maid could be considered "lucky", but more than luck figured in the company policies which now place Minute Maid in the strongest position it has enjoyed in its short history.

The extent of this about-face is shown by the figures. A net loss of $2,452,903 for 1957, was converted to earnings of $4,599,424 ($2.86 a share) on the 1,594,504 shares outstanding for 1958.

The Minute Maid Story--John Fox's Story--is one of enthusiasm and leadership in the frozen foods industry. It is one of vision and vicissitudes, and the power of applying the slogan "work and win," for the Minute Maid Story is one of struggle and victory in the finest American tradition of free enterprise."