Hormel Foods Corporation Type Public (NYSE: HRL) Industry Food Founded 1891 Headquarters Austin, Minnesota, U.S. Products Deli meat, ethnic foods, pantry foods, SPAM Revenue $6.53 billion USD (2009) Employees 18,500 (2008) Website www.hormel.com
Hormel Foods Corporation (NYSE: HRL) is a food company based in southeastern Minnesota (Mower County), perhaps best known as the producer of Spam luncheon meat. The company was founded as George A. Hormel & Company in Austin, Minnesota, U.S., by George A. Hormel in 1891. The company changed its name to Hormel Foods Corporation 102 years later in 1993. Hormel sells food under many brands, including the Chi-Chi's, Dinty Moore, Farmer John, Herdez, Jennie-O, Lloyd's, Spam and Stagg brands, as well as under its own name. The company is listed on the Fortune 500.
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. 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. He opened George A. Hormel & Co. in the northeast part of Austin in an old creamery building on the Cedar River. 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 had allowed many large meat packers to force smaller business under. Two additional Hormel brothers, Herman and John, joined the business that same year and together they processed 1,532 hogs, enough to stay in business. 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 turned his focus on increasing production.
In 1901, the plant was expanded and the business was incorporated. The first directors were A.L. Eberhart and the four Hormel brothers: George, Herman, John and Ben. 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. The name Dairy Brand was registered with the U.S. Patent Office in 1903. 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.
By 1910, Hormel products were routinely appearing in national magazines. 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. That same year Hormel bought Alderson's Mill and began selling Hormel Peerless Minnesota flour nationwide. Hormel joined the World War I effort, George's son Jay C. went into military service and by the end of the war, exports accounted for 33% of the company's yearly volume.
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. 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. In 1926, the company introduced Hormel Flavor-Sealed Ham, America's first canned ham and it added chicken to its line in 1928. 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. In the late 1920s and early 1930s sales branches opened up in Houston, Beaumont, Chattanooga, New Orleans, Baton Rouge, Newark, Los Angeles, Vicksburg, and Nuevo Laredo (Mexico).
In 1931, Jay C. instituted the Annual Wage Plan: under this plan, employees were paid weekly and they were guaranteed 52 weeks' notice before termination of employment. He also introduced incentive pay, profit sharing and pension plans to the company. Later that year a slaughtering plant was constructed in Mitchell, South Dakota, and in 1933, a cattle slaughtering plant was finished in Austin. John G. Hormel, brother of George A., retired in 1933 following 40 years of service. Dinty Moore beef stew was introduced in 1935 first created by Ryen "Gunns" Gunning and Hormel Chili and Spam soon followed in 1936 and 1937 respectively. In 1938, Jay C. Hormel introduced the "Joint Savings Plan" which allowed employees to share in the proceeds of the company. By the late-1930s, full-page, four color ads were routinely appearing in the Saturday Evening Post, Ladies Home Journal and Woman's Home Companion. Hormel ads also were featured on the radio program The George Burns and Gracie Allen Show.
The 1930s also saw the establishment of the Hormel & Co. refrigerator car line, with an initial roster of 125 units.
After reaching sales of $75 million in 1941, George and Jay established The Hormel Foundation to provide perpetual independence of the company, act as trustees of the family trusts and to start and fund The Hormel Institute, a research unit at the University of Minnesota. Benjamin F. Hormel, brother of George A., retired in 1941 after completing 50 years of service. Hormel's production increased to aid in World War II and 65% of its products were purchased by the U.S. government by 1945. Founder George A. Hormel died in 1946 in California where he had lived in retirement. He is buried in Austin's Oakwood Cemetery. Jay C. then became chairman of the board, H.H. Corey became president, and R.F. Gray became vice-president. Hormel acquired the Fremont Packing Company in 1947.
In 1953, it acquired the Tobin Packing Company of Fort Dodge. Also in 1953, distribution centers were opened in San Francisco, Seattle and Beaumont and the company's first non-continental plant opened in Honolulu. Jay C. Hormel died on August 30, 1954, and Corey was named chairman of the board and R.F. Gray was elected president the following year. During Gray's tenure as president, the company greatly expanded its international business through arrangements with companies in Ireland, England, Canada and Venezuela. 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.
Little Sizzlers sausages were introduced in 1961 and Cure 81 hams were introduced in 1963. 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. Also in 1963, Hormel acquired the Queen City Packing Company plant in Springfield, Missouri, and the Ottawa Meat Packing Company plant in Miami, Oklahoma. New plants were also constructed in Chattanooga and Los Angeles and the plants in Charlotte, Winston-Salem, Fresno and Houston were remodeled or expanded. In 1964, the Hormel Corporate Offices were opened just to the north of Interstate 90 in Austin. Gray replaced Corey as chairman of the board upon the latter's retirement in 1965, and M.B. Thompson became president. During Thompson's tenure (1965–1969) a dry sausage plant was built in Algona and distribution centers were built in San Antonio, New Orleans and Atlanta. In 1967, the Hormel Foundation, in cooperation with the National Merit Scholarship Program, started a college scholarship program for the children of Hormel employees. Partial scholarships were awarded through this program on the basis of the student's test scores, academic records, financial need, and school and community involvement. A separate building to house the growing research and development department was built northwest of the corporate office in Austin in 1968. 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.
In 1970, a distribution plant was built in Albany, Georgia, and a dry sausage plant was built in Algona. In 1971, meat processing facilities and distribution centers were opened in both Dallas and Seattle. That same year the company introduced its Matching Gifts program in which it offered to match the donation (up to $2,000) made by any employee to any accredited college or university. In 1972, Holton became CEO and distribution centers were opened in Orlando and Shreveport and a food service facility was built in Oklahoma City. A grocery products plant was opened in Beloit in 1973. On this site the city now boasts the world's largest can of chili. Also in 1973, Hormel Foods became the first company in the meatpacking industry to introduce nutritional and ingredient labeling on meat products. A frozen foods plant was opened in Fort Worth in 1974. A distribution plant was opened in Houston in 1975. In 1976, a slaughtering and processing plant was opened in Ottumwa, a dry sausage plant was opened in Knoxville, Iowa, and a grocery products canning facility was acquired in Stockton. A distribution plant was built in Fresno in 1978. A gelatin plant was opened in Davenport and groundbreaking for a new, one-story Austin plant in 1979. That same year Richard Knowlton was elected as president, the first Austinian to hold that post since Jay Catherwood Hormel.
Holton continued as CEO until 1981 and then this duty was also passed to Knowlton. The construction of the current Austin plant began in 1980, and the Knoxville and Ottumwa plants were expanded. The plants in Beloit, Los Angeles and Ottumwa were renovated and expanded. The new Austin plant, a 1,300,000-square-foot (120,000 m2) facility, began production on May 24, 1982, and was dedicated on Sept. 12, 1982. Knowlton also became chairman of the board in 1984, while continuing to hold the titles of president and CEO. Not-So-Sloppy-Joe Sloppy Joe sauce made its debut in 1985. In 1986, Hormel Foods acquired Jennie-O Foods and also began an exclusive licensing arrangement to produce Chi-Chi's brand products. 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, created by former Miss America Phyllis George, in 1988. That same year, Hormel Foods also introduced microwave bacon.
In August 1985, Hormel workers went on strike at the Hormel headquarters in Austin, Minnesota. In the early 1980s, recession impacted several meatpacking companies, 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. 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. It became one of the longest strikes of the 1980s. The strike began with the sanction of the Local of the United Food and Commercial Workers International Union, P-9. The local chapter of the United Food and Commercial Workers Union 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.
After six months, a significant number of strikebreakers crossed the picket line, provoking riots in Austin. On January 21, 1986, the Governor of Minnesota, Rudy Perpich, called in the National Guard to protect the strikebreakers. This brought protests against the governor, and the National Guard withdrew from Austin. The action had a greater effect on the UFCW international, which ousted the local P-9.
The strike ended in June 1986, after lasting 10 months. Over 700 of the workers did not return to their jobs, refusing to cross the picket line. In solidarity with those workers, the boycott of Hormel products continued for some time. Ultimately, however, the company did succeed in hiring new workers at significantly lower wages.
The strike was chronicled in the film American Dream, which won the Academy Award for best documentary in 1990. A song about the strike, entitled "P-9" (link to music video of song), was written by Dave Pirner of the Minneapolis band, Soul Asylum. The song can be found on their 1989 album, Clam Dip & Other Delights.
The strike has also had a Harvard Business School Case written based on it (with assumed names), called "Adam Baxter Co./Local 190" which features multiple rounds of negotiations between unions and management.
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. Production facilities were opened in Osceola, Iowa in 1996.
The SPAM Museum in Austin, Minnesota, was opened in 2001. In 2004, Jennie-O Turkey Store launched its Jennie-O Turkey Store Oven Ready turkey. In 2005, Jeffrey M. Ettinger was named President and, in 2006, Johnson retired and Ettinger became President and CEO of Hormel Foods. In 2007, Ettinger was named Chairman of the Board. The same year Hormel Foods introduced the first nationally distributed all-natural line of meat products with Hormel Natural Choice deli meats, which utilizes high pressure processing technology. Recent acquisitions by Hormel Foods include: Century Foods International (2003) Clougherty Packing (Farmer John) (2004), Lloyd’s Barbeque (2005), Mark-Lynn Foods (2005), Arriba Foods (2005), Provena Foods (2006) and Burke Foods (2007). Under Ettinger, Hormel Foods issued the Billion Dollar Challenge with a goal to generate $1 billion in sales of products introduced to the market since 2000. The target date for this achievement was 2009. In 2007, Ettinger announced that the goal had been exceeded a full two years early. At the same time, a new challenge was issued: $2 billion in new product sales by 2012. 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. In November 2009, Hormel Foods plans to open a new production facility in Dubuque, IA. The plant will produce microwave meals and is being constructed with the intention to meet the U.S. Green Building Council's Leadership in Energy and Environmental Design recognition.
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 raised by an anonymous whistle-blower . The investigators brought back a video record  showing workers treating the pigs cruelly and without regard for animal rights. The abuses included ramming rods into the anus or vagina of pigs, kicking the pigs, spraying paint up the nasal passages of pigs, and smashing piglets on the floor . The abuses appeared to be committed at times to force pigs to move, and at times simply for amusement.
The factory farm was owned by Natural Pork Production II LLP of Iowa until August 18th, 2008, at which point ownership had transferred to MowMar LLP. This factory farm supplies piglets to pig farmers who raise the pigs then sell them to Hormel. Hormel spokeswoman Julie Henderson Craven, who responded to the PETA video, called the videotaped abuses "completely unacceptable." 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 are facing charges due to the abuse.
Corporate Social Responsibility
Hormel Foods was listed on the Corporate Responsibility Officer Magazine's 2010 list of the 100 Best Corporate Citizens. In 2008, Hormel Foods donated funds to The Hormel Institute, which dedicated an expansion to their cancer research facility. The project renovated a building adding research facilities, including space to house the Blue Gene/L supercomputer. The Institute, located in Austin, MN, was the result of a partnership in 1942 between the Hormel Foundation, the University of Minnesota and Mayo Clinic.
- ^ "Company Profile for Hormel Foods Corp (HRL)". http://zenobank.com/index.php?symbol=HRL&page=quotesearch. Retrieved 2008-10-02.
- ^ http://www.hormelfoods.com/brands/
- ^ No Retreat, No Surrender: Labor's War at Hormel, Hage and Klauda, William Morrow & Co. 1989
- ^ http://www.dollarsandsense.org/archives/2000/0900rachleff.html
- ^ http://hbr.org/product/adam-baxter-co-local-190-1983-negotiation-local-19/an/396321-PDF-ENG
- ^ http://www.hormelnatural.com/downloads/NC%20Deli%20Sandwich%20Meats%20Press%20Release%20FINAL.pdf
- ^ Spam Turns Serious and Hormel Turns Out More, http://www.nytimes.com/2008/11/15/business/15spam.html?hp
- ^ http://www.foodprocessing.com/articles/2008/342.html
- ^ http://www.newser.com/article/d9387u380/ap-exclusive-peta-undercover-video-shows-workers-hitting-sows-slamming-piglets-at-iowa-farm.html
- ^ http://getactive.peta.org/campaign/iowa_pigfarm_abuse2
- ^ http://www.boston.com/news/nation/articles/2008/09/17/video_shows_abuse_of_pigs/
- ^ "CR's 100 Best Corporate Citizens 2010", Corporate Responsibility Magazine
- ^ a b "The Hormel Institute", Hormel Foods, undated, retrieved 2010-03-16.
- Cooper, Jake. Lessons of the P-9 Strike. Socialist Action Books. 298 Valencia St., San Francisco CA 94103.
- Mill on the Willow: A History of Mower County, Minnesota by various authors. Library of Congress No. 84-062356
- White, John H. (1986) The Great Yellow Fleet. Golden West Books, San Marino, California. ISBN 0-87095-091-6
- Hormel Foods Corporation official website
- Hormel Foods 2009 Corporate Responsibility Report website
- Hormel Foods Recipes website
- Hormel brand website
- Hormel Natural Choice website
- SPAM brand website
- Minnesota Public Radio 2003 interview with two former Hormel strikers.
- Hormel Historic Home Home of George A. and Lillian Hormel in Austin, Minnesota
- Slaughterhouse Fight: A Look at the Hormel Strike
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