Post Consumer Brands, LLC (previously Post Cereals and Postum Cereals), also known as Post, is an American consumer packaged goods food manufacturer headquartered in Lakeville, Minnesota.
The company, founded in 1895 by C. W. Post, owns a large portfolio of cereal brands that include Bran Flakes, Honey Bunches of Oats, Golden Crisp, Grape-Nuts, Honeycomb, Pebbles, and Waffle Crisp, among others. The company also produces several pet food brands, including Rachael Ray Nutrish, Kibbles 'n Bits, and 9Lives, and markets Peter Pan Peanut Butter.
History
C. W. Post established his company in Battle Creek, Michigan, having lived there since 1891, when he was a patient at a holistic sanitarium operated by Dr. John Harvey Kellogg.The timeline and product history is adapted from "A Chronological History of Kraft General Foods, Inc.", prepared by the KGF Archives Department, Glenview, IL, c. 1994.Details of C. W. Post's career may be found in American National Biography, Vol. 7, pp. 725-7, published by Oxford University Press. Dr. Kellogg, with his brother W. K. Kellogg, had developed a dry corn flake cereal that was part of their patients' diet. Post's first product, introduced in 1895, was not a cereal, however, but a roasted, cereal-based beverage, Postum. Having developed an aversion to coffee during his time in the sanitarium, Post positioned Postum as a healthy alternative. Its advertising slogan, which he coined himself, was, "There's a Reason." Postum's main ingredients were naturally caffeine-free wheat grain, bran, and molasses. Initially, Postum had to be brewed like coffee, but in 1911, Post introduced a powdered, instant formulation. This version of the product was manufactured in Battle Creek until it was discontinued in 2007. As of January 2013, Eliza's Quest Food had succeeded in returning Postum to many grocery stores across the United States and Canada.
In 1897, Post introduced his first dry cereal, a crunchy blend of wheat and barley, which he called Grape Nuts. His first corn-flake product was introduced as "Elijah's Manna" in 1904. Owing to consumer resistance to the (inaccurate) biblical referenceIn I Kings 17:6, Elijah was described as having ravens feed him "bread and meat," rather than manna, when in hiding from King Ahab. Exodus 16:31 describes manna as "white [and having a similar flavor to] wafers--made with honey," but the Israelites found it a poor daily substitute for the diet of meats, fishes, cucumbers, melons, leeks, onions, and garlic which they had enjoyed in Egypt. that was so great that even Great Britain flatly refused to register the name as a trademark, it was renamed Post Toasties in 1907.The Kellogg brothers had been selling their corn flakes and other cereal products since 1897, but with only limited success. Post, who took the cereal business seriously, was equipped to market and advertise his products nationwide; so successfully, in fact, that W.K. Kellogg broke away from his brother and in 1907 founded his own company, the Battle Creek Toasted Corn Flake Company (renamed the Kellogg Company in 1922). Kellogg's Corn Flakes eventually overtook Post Toasties in popularity and the latter brand is today only a minor player in the dry-cereal market.
C. W. Post was a businessman who emphasised advertising and marketing as central to business success. Within ten years of its incorporation, the Postum Cereal Company had over $10 million in capital and spent $400,000 annually on advertising, notable sums for the period.See International Directory of Company Histories, Volume 2, pp 530-32, published by St. James Press, 1990, for details relating to the company during this period.
Employees were among the highest-paid in the industry, and working conditions at the factory were regarded as exemplary. Post also developed a factory town, selling homes to workers at favourable rates.
Postum Cereal Company lost its founder in 1914. C.W. Post underwent an apparently successful appendectomy at the Mayo Clinic, but shortly after returning home to recuperate, he died of a self-inflicted gunshot wound. Post had for years suffered from bouts of illness and depression. While his death was without warning, his company was not left rudderless. His daughter, Marjorie Merriweather Post, had been raised in the business and was familiar with virtually every aspect of its operations.Biographical details of Post's life may be found in American National Biography, Volume 7, p. 732. She assumed control of the now $20-million Postum Company and managed its affairs for the next eight years. While she did not oversee major product innovations, she did have a good feel for business and for promoting talented managers. In addition, her second marriage, in 1920, was to Edward F. Hutton, the founder of a brokerage firm on Wall Street.
Gross revenues in 1921 were $17.75 million.Financial details for the company during this period may be found in the annual issues of Moody's Manual of Investments American and Foreign Industrial Securities, published by Moody's Investor Services. In 1922, Hutton took the newly incorporated Postum Cereal Company public by issuing 200,000 common shares. The 1920s was a period in which common stock was still considered highly speculative, and consequently the newly issued shares carried a dividend at the rate of $5.00 per year.
Revenues in 1922 were essentially the same as in 1921, but in 1923, they were $22.25 million and a stock split, in the form of a 100% stock dividend, increased the authorized shares to 400,000. These shares also earned a $3.00 annual cash dividend, representing a 20% increase over the presplit rate. In 1925, with revenues now at $27.4 million, the stock was split once again and the dividend was increased to $4.00 per new share.
Major acquisitions
Starting in 1925, under the leadership of financier (and at one point, son in-law to the founder), E. F. Hutton as chairman and Colby M. Chester as president, Postum Cereal made the first of a series of corporate acquisitions which would within a few years transform it into the dominant US packaged grocery products manufacturer.
It began late that year with the purchase of the Jell-O Company. Jell-O had been first produced in 1897 by Pearle Bixby Wait, a carpenter from the town of LeRoy in northern New York state. Mr. Wait's product was based upon a patent that had been issued to inventor and industrialist Peter Cooper in 1845, but which Cooper had never developed commercially. However, Wait was unsuccessful in marketing Jell-O, and in 1899, he sold the rights to it for $450 to a neighbor, Orator Francis Woodward, who had founded the Genesee Pure Food Company in 1897. Genesee became the Jell-O Company in 1923, the same year it began marketing D-Zerta, a sugar-free gelatin, and a powdered mixture for making ice cream in the kitchen.
In 1926, Postum Cereal acquired Igleheart Brothers, Inc (established in 1856), the makers of Swans Down cake flour, and followed this with the purchase of the Minute Tapioca Company. "Tapioca Superlative" had been invented in 1894 by a Boston woman, Susan Stavers, who made it from tapioca flakes that she ran through her coffee grinder. Later that year, she sold the rights to John Whitman, of Orange, Massachusetts, who changed its name to "Minute Tapioca". In 1908, he changed the name of his company to that of his product. The "Minute" brand would later become better known for a General Foods innovation introduced in 1949 known as Minute Rice, a brand of parboiled rice.
As a consequence of the Jell-O and Minute Tapioca acquisitions, Postum Cereal's revenues in 1926 jumped to $46.9 million. The number of shares stood at 1.375 million, including shares issued to acquire Jell-O and Minute Tapioca. The dividend was increased to $4.70 a year.
The acquisition spree continued in 1927 with the purchase of two similarly named confectionery companies, chocolate-maker Walter Baker (founded in 1765, making it the oldest component of the Postum constituent companies), and coconut-processor Franklin Baker, which had begun early in the 19th century as a flour broker, but whose confectionery products dated from 1895. This was followed by the purchase of Log Cabin Products, the maker of Log Cabin Syrup (first produced in 1887), and of Richard Hellmann, Inc (established in 1913), the producer of Blue Ribbon mayonnaise. And late in the year, Postum Cereal began selling its first coffee product, "Sanka", by obtaining US marketing rights from Dr Ludwig Roselius of Bremen, Germany. Roselius had developed the decaffeinated coffee in 1906 and began selling it in the US in 1923."Sanka" is a contraction of the French words, sans caféine. Roselius for many years had had little success in finding a viable decaffeination process. Legend has it that when a shipment of green coffee sank in Bremen harbor, the beans came out caffeine free. Ultimately, Roselius settled on a washing process under more sanitary conditions. General Foods purchased Roselius's American company outright in 1932 and the original German company, Sanka HAG, AG, in 1979.
Three more acquisitions followed in 1928. The most important was that of the Cheek-Neel Coffee Company. Its product, Maxwell House, dating from 1892, was a well-known brand in what was still a fragmented US coffee market. Within a few years, however, it was to become the number one brand in America and would retain that position well into the 1980s. Also acquired during 1928 was the La France Manufacturing Company, a maker of starch and other laundry products (this being Postum's first venture into nonedibles), and the Calumet Baking Powder Company, the leading maker of this kitchen essential.
Financially, the year culminated on October 1 with the inclusion of Postum, Inc in the newly reformulated Dow Jones Industrial Average of 30 common stocks. By year-end, revenues stood at $101 million and the dividend on the five million authorized shares was $5.00 per year, a 25-fold increase since 1922.
Purchase of General Foods and renaming
By far the most important acquisition of 1929 was of the frozen-food company owned by Clarence Birdseye,Details of Birdseye's remarkable career may be found in American National Biography, Vol. 2, pp. 808-9. called "General Foods Company". Birdseye (December 9, 1886 - October 7, 1956) was one of the most important entrepreneurs in the history of the food industry. Born in New York City, he became interested in the frozen preservation of food during the course of working as a fur trader in Labrador between 1912 and 1916. By 1923, he had developed a commercially viable process for quick-freezing foods using a belt mechanism, which he patented. In 1924, with backing from three investors, he formed the General Seafoods Company, in Gloucester, Massachusetts, to produce frozen haddock fillets packed in plain cardboard boxes.