NABISCO FOODS GROUP
In 1898 decades of amalgamation in the biscuit industry culminated in the merging of the mid-western American Biscuit Company, the eastern New York Biscuit Company, and the United States Baking Company to form the National Biscuit Company (NBC). The merger, comprised one hundred and fourteen bakeries, and was capitalized at $55 million. The Chicago-based National Biscuit Company launched by lawyer Adolphus Green held the monopoly on cookie and biscuit production in the United States.
Adolphus Green began the process of standardization of every company product that could be nationally identified with Nabisco. Exact recipes and uniform standards were developed and used by all of the NBC bakeries. Green also initiated novel and unusual packaging in special protective containers for crackers. He commissioned an advertising agency to assist in promoting the company's products with illustrations. One of the world's best-recognized illustrated trademarks showed a rosy-cheeked boy dressed in a raincoat and galoshes clutching a box of biscuits. As a pioneer in advertising NBC spent seven million dollars in the early 1900s promoting and marketing company products.
In the early years of the twentieth century NBC expanded its line of cookies and crackers. Introduced in 1902, Barnum's Animal Crackers were colorfully packaged in a box resembling a circus cage filled with animals. In 1912 the company introduced Lorna Doone and Oreo, the latter eventually becoming the world's best-selling cookie.
The 1920s were a very prosperous period for NBC. In 1925, with the addition of several new bakeries, the company established its first foreign subsidiary in Canada. NBC expanded its product line to include pretzels, breakfast cereal, and ice cream cones. Diversification came about through acquisitions of other companies, including the purchase of the Shredded Wheat Company (in 1928) and the Mclaren Consolidated Cone Company, the world's largest manufacturer of ice cream cones.
The depression years (1929–1939) slowed company growth until 1931 when NBC took over the Bennett Biscuit Company. NBC concentrated on Bennett's most popular product line, Milk-Bone Dog Biscuits. Advertising "a dog's dessert" and its breath-sweetening properties boosted NBC's sales. In 1934 Ritz Crackers was launched as a new prestige product and was a huge success. Throughout the 1930s the company relied heavily on radio advertisements to promote NBC's products. Partly to reduce confusion, NBC changed its official trademark company name to "Nabisco."
Nabisco experienced troubled times in the years immediately following World War II (1939–1945). Many of the company's bakeries were outdated and required drastic renovating. With the rise of an energetic George Coppers as president in 1945, inertia gave way to an expansive new attitude. Within ten years $150 million had been spent on renovations to Nabisco's antiquated bakeries. In 1958 the renovation and reconstruction culminated in the grand opening of an ultra-modern bakery and research center in Fair Lawn, New Jersey. The 1950s also marked the beginning of Nabisco's expansion overseas. Forming a manufacturing partnership with La Favorita Bakery in Venezuela and the Formosa Bakery in Mexico gave Nabisco a foothold in South America.
With Lee S. Bickmore at the helm in 1960, Nabisco accelerated acquisitions and overseas expansion. In 1961 and 1962 Nabisco acquired the Cream of Wheat Corporation, the French firm Biscuits Gondolo, the English bakery Frears, and New Zealand's largest biscuit firm, Griffen and Sons. In 1963 and 1964 Nabisco acquired Oxford Biscuit Fabrik of Denmark, the James O. Welch Company, makers of Junior Mints and Sugar Babies, and one of West Germany's largest confectioneries, Harry Trueller. Overseas acquisitions continued and, by the end of the 1960s, Nabisco wasPage 676 | Top of Article the leading manufacturer of crackers and cookies in the United States, Canada, France, and Scandinavia. Nabisco was also a major supplier to other European and South American countries.
The growth of Nabisco continued through the 1970s. Sales reached the one-billion-dollar mark in 1971, and by 1976, sales surpassed $2 billion. The company made the first Asian investment by establishing a joint venture with Yamazaki Baking Company of Japan in 1970. In 1975 construction of a modern flour mill in Toledo, Ohio, and a computerized bakery in Richmond, Virginia coincided with the building of new company headquarters in East Hanover, New Jersey.
Inflation and soaring energy costs in the 1970s led Nabisco to consider a merger with another large food manufacturer. Early in 1981 Nabisco and Standard Brands announced plans to merge. By the end of 1981 the newly named Nabisco Brands, Inc. demonstrated its potential for growth by purchasing the LifeSavers Company for $250 million. It also purchased a controlling interest in Mexican cookie firm Gamesa for $45 million.
R.J. Reynolds, a worldwide manufacturer and distributor of tobacco, food, and beverage products, purchased Nabisco Brands, Inc. in 1985 for $4.9 billion. This created the world's largest consumer-products company, with annual sales of more than $19 billion. Later in 1985 R.J. Reynolds changed its name to R.J.R. Nabisco, Inc. In 1988 Kohlberg Kravis Roberts won a bidding war for Nabisco with a record $24.5 billion in cash and debt securities. Kohlberg Kravis Roberts, along with the current president of Nabisco, Louis V. Gerstner, Jr., pledged to manage the company for the long run. Through the 1990s the Nabisco Foods Group (formerly Nabisco Brands, Inc.) experienced reorganization and downsizing, but the company still continued to acquire other food and snack-related firms.
Cahn, William. Out of the Cracker Barrel: The Nabisco Story from Animal Crackers to Zuzus. New York: Simon and Schuster, 1969.
International Directory of Company Histories, vol. 2. Farmington Hills, MI: The Gale Group, 1990, s.v. "Nabisco Brands, Inc."
International Directory of Company Histories, vol. 7. Farmington Hills, MI: The Gale Group, 1993, s.v. "Nabisco Foods Group."
Lampert, Hope. True Greed: What Really Happened in the Battle for RJR Nabisco. New York: New American Library, 1990.