H.J. HEINZ COMPANY

The Heinz ketchup bottle and the company slogan, "57 Varieties," are familiar to any American who eats in a restaurant or shops for food. The H.J. Heinz Company today manufactures thousands of food products in plants across the world and remains one of the world's leading food companies. Some of the best-known Heinz brands—such as Skippy peanut butter, StarKist tuna, and Ore-Ida Tater Tots—do not carry the Heinz name. Heinz's divisions include food service, infant foods, ketchup and condiments, pet foods, tuna, and weight-control products.

The company's founder, Henry John Heinz, grew up not far from Pittsburgh, Pennsylvania. After working as a bookkeeper in his father's brickyard he and a partner, L.C. Noble, began to sell bottled horseradish, sauerkraut, vinegar, and pickles, naming their business Heinz, Noble & Company. This enterprise ultimately failed after the Panic of 1873, but Heinz and some of his relatives later organized a new business, which became known as the H.J. Heinz Company in 1888. The Pittsburgh business prospered and the nation came to know Heinz as the famed "pickle king." He also produced jams, jellies, and condiments, always packed in clean conditions and made from the freshest ingredients.

Heinz promoted his products skillfully and with great zeal. Noting that the American diet at this time was quite bland, he coined the "57 Varieties" slogan to spark an interest in changing people's eating habits. The slogan logo appeared everywhere—in newspapers and magazines and on streetcars, billboards, and even large concrete figures along highways. At the 1893 World's Fair in Chicago he introduced "pickle pins," a fad which soon swept the country. In 1900 he put up the first electric advertising sign, representing a 40-foot pickle, in New York City. A religious man, Heinz never allowed such advertisements to appear on Sundays. His plants were known for their humane treatment of workers and there was never a strike against the company while Heinz was president.

By 1905 Heinz had opened a factory in Great Britain, beginning what would become a global operation. In 1906, unlike many other American food manufacturers, he supported the Pure Food and Drug Act, which regulated the production of processed foods to make them safer to eat. By the time of Heinz's death in 1919, the H.J. Heinz Company employed 6,500 people and ran 25 branch factories. He was succeeded by his son, Howard, who remained president until his death in 1941. Heinz continued to produce its traditional condiment lines, though in 1931 it added a baby food division, which, along with canned soups, helped keep the company afloat during the Great Depression (1929–1939). By 1937 the company's business had doubled.

H.J. Heinz II, known as Jack, took over as president after his father's death, leading the company in once again doubling its sales over the next five years. Jack Heinz was active in food relief efforts during World War II (1939–1945); during this time, many more women took jobs in Heinz plants as men went to war. Sales abroad increased substantially in the 1940s, ketchup and baked beans were particularly popular in England. Heinz went public after the war and continued to expand during the 1950s and 1960s, opening plants in the Netherlands, Venezuela, Japan, Italy, and Portugal. It also bought Reyumer & Bros., Inc., Hachmeister, Inc., StarKist Foods, and Ore-Ida Foods. Throughout the latter half of the twentieth century, Heinz weathered many changes in the food industry, as distributing and marketing systems adapted themselves to the new supermarket chains.

R. Burt Gookin succeeded Jack Heinz as CEO, and J.F. O'Reilly, president of the company's British subsidiary, took over as president of the parent company in 1973. He changed the company's emphasis by cutting back on traditional business while introducing new products. During O'Reilly's tenure Heinz acquired Weight Watchers International and several other companies, and ceased trying to compete in the soup market with the Campbell Soup Company. O'Reilly, who became CEO in 1979, also instituted a cost-cutting policy, downsizing some product packages and pressuring plants to be more productive. Although the Justice Department prohibited Heinz's bid to purchase Bumble Bee Seafoods in 1988, the company reorganized StarKist Foods and Heinz Pet Products in an effort to increase sales abroad.

Heinz began to expand into Third World countries and also reached into China, Korea, and Thailand. These new strategies succeeded, doubling Heinz's sales from $2.9 billion in 1980 to $6.1 billion in 1990. During these years Heinz was investing almost as much overseas as in the domestic economy. It controlled 29 percent of the worldwide infant food market, challenged only by the U.S. leader, Gerber Foods. Heinz also had begun investing in the Asia-Pacific market with the acquisition of Wattie's Limited in New Zealand. A recession in the early 1990s, however, combined with increased competition caused a slowdown which decreased the company's stock value. A number of divestments, staff reductions, and decreases in advertising outlays helped to minimize the losses in the domestic market.

Despite continuing market challenges O'Reilly insisted that Heinz would prosper if it remembered its dedication to niche markets—condiments, tuna, frozen potatoes, and weight-control products—and to what he called "constant rebirth." The company acquired the pet food division of Quaker Oats Company in 1995 and increased its market share of the tuna business to 46 percent by 1997. O'Reilly instituted a major restructuring plan called Project Millennia, which would eliminate 25 plants, cut 2,500 jobs (6 percent of the total workforce of 43,000), and take a charge against earnings of $650 million. O'Reilly said that the move would make Heinz, along with Campbell Soup Company and Sara Lee Corporation, one of the three most important food companies in the world. Indeed, the company came close to its 1997 goal of $9.5 billion in sales, pulling in actual sales of $9.3 billion. Although O'Reilly was criticized by some industry observers for raising product prices and reducing advertising support for some of the Heinz brands, he had helped the company to grow from $l billion in net worth in 1979 to nearly $20 billion in 1998.

In 1997 Heinz divested itself of the Ore-Ida food service operations business and scaled down its Weight Watchers division. Under the leadership of William Johnson, the company president who succeeded O'Reilly as chairman, Heinz considerably enhanced its advertising and marketing efforts. After a drop in 1998 sales, in February 1999 the company announced another cost-cutting plan that would eliminate 4,000 jobs and close an additional 20 factories.

See also: Campbell Soup Co.

H.J. HEINZ COMPANY

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