beechnut

Beech-Nut Baby Food

Those stirrings of sympathy and defensiveness you have felt when reading about other also-rans? Feel free to bank those emotions for another entry. The Beech-Nutters sure make it hard to root for them. It’s another longstanding American brand, if not as iconic as its rivals then surely well known, perhaps even fondly so. Born in the 1890s as a ham packing operation in the Mohawk Valley, the company expanded into other foodstuffs over the early years of the 20th century. Their chewing gum line dates to 1910, about two decades after Wrigley got started. The baby food line dates to 1931, just a few years after Gerber’s first nationwide roll-outs. While they clearly qualify as also-rans in the gum game, it’s the baby food market where the modern story of Beech-Nut is truly told.

First, let it be stipulated: there was never a cuter 800-pound gorilla than that adorable Gerber baby. She’s a real charmer fronting a company that simply did a lot of things right, and besting her was always going to be a stretch. Quality product, frequent innovation, personalized customer service, astute marketing, (no scandals!) − Gerber dominated from the outset. Over a hundred years of competition, Beech-Nut has been lucky to claim double digit market share, vying with Heinz and (for a few decades) Libby’s for the diminishing portion of the mommy-base somehow resistant to the utter obviousness of the Gerber option.

But Beech-Nut persevered and, on its own terms, thrived, becoming a classic company in what by their presence became a classic company town, Canajoharie, NY, a rural village a few miles outside Albany. They merged with Life Savers in the 50s, sold to Squibb in the 60s, then the baby food business spun back out and was bought by Nestle in the 70s.

gerber

The One You Know Better: Gerber

We’ll pause for a moment to recognize the chewing gum line at this juncture, since they were left behind at Squibb. The gum brands − notably the namesake peppermint and the zebra-patterned Fruit Stripe − competed with Wrigley’s for decades but typically also played also-ran to the bigger company’s Juicy Fruit, Spearmint, Doublemint, Big Red, Extra, and Orbit lines. No dramatic storylines here, unfortunately, just a perpetual background presence followed by a slow tapering toward irrelevance.

Back to strained veggies, where Beech-Nut admirably held to their root values and practices through the 20th century, continuing until very recently operating out of the same big white factory where the founders were canning hams in 1907.   Though they never came close to matching Gerber’s sales, you can ask anyone in Canajoharie about the old Beech-Nut building visible from the Thruway and they’ll likely have a relative or three with personal histories and a story or ten to tell about what went on inside those white walls.

Unfortunately, one of those ten stories will invariably be about the time Beech-Nut sold sugar water to babies under the name apple juice. The scandal came to light in the 80s, but the behavior dated back years, to 1977, prior to the acquisition by Nestle. At that time, Beech-Nut was on the edge financially. To save a few hundred thousand dollars − a pittance relative to their $50 million manufacturing budget − they ditched their longtime suppliers of apple juice concentrate for a new vendor out of the Bronx. From the get-go, there was widespread suspicion in the industry that the cheaper product was adulterated. Heinz refused to use it. A few executives within Beech-Nut, including the head of R&D, insisted the new concentrate was impure, citing tests that suggested the presence of corn syrup. They were ignored.

An apple juice trade association launched their own investigation into the supplier a few months later, and government authorities soon followed. When the Beech-Nut brass were given a chance to join the legal actions building against the supplier, they declined, fearing bad publicity. In retrospect, this was the point where any chance at plausible deniability disappeared in a smokescreen of cover-up. In mid-1982, believing that federal seizures of their apple juice products were imminent, Beech-Nut raced to ship their inventory of tainted juice to the Dominican Republic, where it was sold for half-price.

They had dodged one bullet, but by the end of the year, federal and state regulators had built a decisive case against the supplier with Beech-Nut executives shown to be complicit throughout. For many years, Beech-Nut had been selling “100% apple juice” made from beet sugar, corn syrup, cane sugar syrup, and few if any apples. Beech-Nut agreed to millions of dollars in fines. The two key executives got a year and a day in the slammer, six-figure fines, and prominent placement in many books on business ethics.

What Happened Next

Any scandal that involves babies on the victim side usually spells doom for the perp.   To their credit, and to the immense relief of the hundreds of Canajoharians earning a living wage in difficult times upstate, Beech-Nut did not go away. In the years since the criminal case was concluded, the company passed from Nestle to Ralston-Purina (why no one stood up at the marriage service to object to the union of cat food and baby food is beyond me) to a private equity firm that tried to merge Beech-Nut with Heinz.

The Federal Trade Commission challenged the merger on the grounds that it would reduce competition by transforming a three-company race into a two-company race, even though Beech-Nut and Heinz had largely different geographic markets and Gerber was so far ahead. The merger never went through, and Heinz sold its baby food line to Del Monte in 2002.

Where Are They Now?

A Swiss firm called the Hero Group bought Beech-Nut in 2005. A few years later, partly due to a damaging flood in 2006, the company shuttered its Canajoharie factory and moved to a newer facility 20 miles away. Jobs and the county tax base were preserved, even if the town of Canojaharie itself was hard hit by the departure.

Gerber’s dominance in the baby food market has never been seriously challenged. In an effort to expand internationally, they solicited suitors and agreed to be bought by Sandoz in ’94. The marriage of pharmaceuticals and baby food may have been as fraught as that between baby food and cat food. In 2007, Gerber was sold to a different international company, one with some experience in the baby food game. Nestle.

Afterthoughts

The still-young Beech-Nut company was featured as a success story in “Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929” a collection of material trumpeting the commercial successes of the 20s. One quote could be as true today as it was when it was written in the 1920s: “Looking backward today, the growth of the Beech-Nut Packing Company is directly traceable to the original idea that perfect flavor in foods will find its public.”

Another quote, however, may be more difficult to defend: “Only the best may pass the Beech-Nut Portals of Vigilance.”

Posted by Ray Agostinelli

Working and writing in Boulder, CO

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