Hormel Foods

eorge Hormel opened his Austin, Minnesota, slaughterhouse in an abandoned creamery in 1891. By 1900 Hormel had modernized his facilities to compete with larger meat processors. In 1903 the enterprise introduced its first brand name (Dairy Brand) and a year later began opening distribution centers nationwide. The scandal that ensued after the discovery in 1921 that an assistant controller had embezzled over $1 million almost broke the company, causing Hormel to initiate tighter controls. By 1924 it was processing more than a million hogs annually. Hormel introduced canned ham two years later.

Jay Hormel, George's son, became president in 1929; under his guidance Hormel introduced Dinty Moore beef stew (1936) and SPAM (1937). A Hormel executive won a contest, and $100, by submitting the name, a contraction of "spiced ham." During WWII the US government bought over half of Hormel's output; it supplied SPAM to GIs and Allied forces.

In 1959 Hormel introduced its Little Sizzlers pork sausage and sold its billionth can of SPAM. New products rolled out in the 1960s included Hormel's Cure 81 ham (1963). By the mid-1970s the firm had more than 750 products.

The company survived a violent, nationally publicized strike triggered by a pay cut in 1985. In the end only 500 of the original 1,500 strikers returned to accept lower pay scales.

Sensing the consumer shift toward poultry, Hormel purchased Jennie-O Foods in 1986. Later acquisitions included the House of Tsang and Oriental Deli (1992), Dubuque (processed pork, 1993), and Herb-Ox (bouillon and dry soup mix, 1993). After more than a century as Geo. A. Hormel & Co., the company began calling itself Hormel Foods in 1993 to reflect its expansion into non-pork foods. Former General Foods executive Joel Johnson was named president and CEO that year (and chairman two years later).

Hormel proved it could take a joke with the 1994 debut of its tongue-in-cheek SPAM catalog, featuring dozens of SPAM-related products. But when a 1996 Muppets movie featured a porcine character named Spa'am, Hormel sued Jim Henson Productions; a federal court gave Spa'am the go-ahead.

Also in 1996 Hormel teamed up with Mexican food processor Grupo Herdez to sell Herdez sauces and other Mexican food products in the US. It then formed a joint venture with Indian food producer Patak Spices (UK) to market its products in the US. Late that year Hormel paid $64 million for a 21% interest in Spanish food maker Campofrio Alimentacion.

Earnings fell in 1996, due in part to soaring hog prices. The company was hit hard again in 1998 when production contracts with hog growers meant it wound up paying premium rates, despite a market glut. In 1998 the Smithsonian Institution accepted two cans of SPAM (one from 1937, the other an updated 1997 version) for its History of Technology collection.

SPAM sales soared in 1999 as nervous consumers stockpiled provisions for the millennium. To build its growing HealthLabs division, Hormel acquired Cliffdale Farms (2000) and Diamond Crystal Brands nutritional products (a division of Imperial Sugar) in 2001 -- boosting its share of the market for easy-to-swallow foods sold to hospitals and nursing homes.

In early 2001 Hormel acquired family-owned The Turkey Store for approximately $334 million and folded it into its Jennie-O division.

Hormel produced its 6 billionth can of SPAM in 2002 and traded $115 million in stock to acquire the rest of Imperial Sugar's Diamond Crystal Brands unit, which packages single-serve packets of sugar, sweeteners, seasonings, and plastic cutlery for the foodservice industry.

To further diversify, in 2003 Hormel acquired food manufacturer Century Foods International (whey-based protein powders, beverages, and nutrition bars) and added it to its burgeoning specialty foods group. In 2004 Hormel sold off its stake in Campofrio to Smithfield Foods.

Its last act of business in 2004 was to purchase Southern California's Clougherty Packing for about $186 million. The pork processor's facilities help extend Hormel's capacity for further-processed foods in the southwestern US.

In 2005 the company purchased Mexican food manufacturer Arriba Foods for $47 million in cash. Later that year it bought Lloyd's Barbecue Company from General Mills.

Responding to the growing trend of the US population to dine out, Hormel expanded its foodservice segment (which it refers to as its specialty foods business) with the 2005 purchase of foodservice food manufacturer and distributor Mark-Lynn Foods. Mark-Lynn's products include salt and pepper packets, ketchup, mustard, sauces and salad dressings, creamers, and sugar packets, as well as jellies, desserts, and drink mixes.

Adding to its grocery product offerings, in 2006 the company acquired canned, ready-to-eat chicken producer Valley Fresh Foods for $78 million. It also bought pepperoni and pasta maker Provena Foods, and sausage and sliced meat maker Saag's Products. It added another to its list of countries in which it has joint ventures in 2006, when it formed a JV with San Miguel to raise and market hogs and animal feed in Vietnam. The JV is 49%-owned by Hormel.

Johnson retired in 2006; company veteran Jeffrey Ettinger was tapped to be the new chairman and CEO.

Hormel acquired Burke Corporation, a maker of pizza toppings and other fully cooked meat items in 2007 for $115 million in cash. The acquisition allowed Hormel to extend its pizza-topping operations into the foodservice sector. The following year, it acquired Boca Grande Foods for $23.5 in cash. Boca Grande makes Poco Pac branded jams, jellies, and pancake syrup portion-control products for foodservice operators.

In January 2013 Hormel acquired the Skippy peanut butter business from Unilever for approximately $700 million.