Nabisco

Nabisco (from the National Biscuit Company) is an American manufacturer of cookies and snacks headquartered in East Hanover, New Jersey. The company is a subsidiary of Illinois-based Mondelēz International.^[1] Nabisco's plant in Chicago, a 1,800,000-square-foot (170,000 m²) production facility at 7300 S. Kedzie Avenue, is the largest bakery in the world,^[2] employing more than 1,200^[2] workers and producing around 320 million pounds of snack foods annually.

Its products include Chips Ahoy!, Belvita, Oreos, Ritz Crackers, Triscuits, and Wheat Thins for the United States, United Kingdom, Mexico, and Venezuela, as well as other parts of South America.

All Nabisco cookie or cracker products are branded Christie in Canada. Prior to the Post Cereals merger, the cereal division kept the Nabisco name in Canada. The proof of purchase on their products is marketed as a "brand seal". The Nabisco name became redundant in Canada after Kraft took over.

Nabisco opened corporate offices as the National Biscuit Company in the world's first skyscraper, the Home Insurance Building in the Chicago Loop in 1898.^[3]

Logo

The Nabisco trademark imprinted on an Oreo cookie

Newspaper ad for the Uneeda biscuits, from 1919: The Nabisco "antenna" trademark can be seen behind the product.

Nabisco's trademark, a diagonal ellipse with a series of antenna-like lines protruding from the top (Orb and Web), forms the base of its logo and can be seen imprinted on Oreo cookies in addition to Nabisco product boxes and literature.^[4] It has been claimed in company promotional material to be an early European symbol for quality. It may be derived from a medieval Italian printer's mark that represented "'the triumph of the moral and spiritual over the evil and the material'",^[5] or to represent the act of winnowing, separating grain from chaff.

History

Company timeline

In 1792, Pearson & Sons Bakery opened in Massachusetts. They made a biscuit called pilot bread for consumption on long sea voyages. Josiah Bent first coined the term 'crackers' for a crunchy biscuit they produced in 1801. In 1889, William Moore acquired Pearson & Sons Bakery, Josiah Bent Bakery, and six other bakeries to start the New York Biscuit Company.

Adolphus Green (1843–1917)^[6][7] started the American Biscuit and Manufacturing Company in 1890 after acquiring 40 different bakeries. William Moore, Adolphus Green, and John G. Zeller (Richmond Steam Bakery) merged in 1898 to form the National Biscuit Company. Adolphus Green was named president.

The name Nabisco is first used as part of a name for a sugar wafer in 1901. John G. Zeller was president of National Biscuit Company from 1923-1931.Nabisco celebrated its golden anniversary in 1948. By 1971, Nabisco had become the corporate name. In 1981, Nabisco merged with Standard Brands, which then merged with R.J. Reynolds in 1985.

Kraft General Foods acquired Nabisco ready-to-eat cold cereals from RJR Nabisco in 1993 (the cereal brands are now owned by Post Holdings). In 1999, Nabisco acquired Favorite Brands International.

In 2000, Philip Morris Companies, Inc., acquired Nabisco and merged it with Kraft Foods, Inc., one of the largest mergers in the food industry. In 2011, Kraft Foods announced it was splitting, making the snack-food business a separate company (to be called Mondelēz International LLC).^[8]

Origins

National Biscuit Company (and now defunct Quincy Biscuit) wagon advertising "Uneeda Biscuit" in Boston, Massachusetts, in 1899.

Nabisco dates its founding to 1898,^[9] a decade when the bakery business underwent a major consolidation. Early in the decade, bakeries throughout the country were consolidated regionally, into companies such as Chicago's American Biscuit and Manufacturing Company (which was formed from 40 Midwestern bakeries in 1830), the New York Biscuit Company (consisting of seven eastern bakeries), and the United States Baking Company. In 1898, the National Biscuit Company was formed from the combination of those three. The merger resulted in a company with 114 bakeries across the US and headquartered in New York City. The word "biscuit" is a traditional term for what are now termed "cookies" and "crackers" in American English, though British English retains "biscuit" to refer to these baked goods.

Key to the founding of Nabisco was Pittsburgh baking mogul Sylvester S. Marvin. Marvin arrived in Pittsburgh in 1863 and established himself in the cracker business, founding S. S. Marvin Co. Its products included crackers, cakes, and breads. Marvin was called the Edison of manufacturing for his innovations in the bakery business. By 1888, it was the largest in the US, and the centerpiece of the National Biscuit Company. Marvin was also a member of the elite South Fork Fishing and Hunting Club of Johnstown Flood fame. The F. A. Kennedy Steam Bakery in Boston, known for inventing Fig Newtons and producing Lorna Doone cookies, was one of the very first acquisitions made by Nabisco, joining the company in 1898.^[10]

Early 20th-century Uneeda Biscuit ghost sign, Dubuque, Iowa

Packaging breakthrough

After the consolidation, the president of Nabisco, Adolphus Green, asked Frank Peters to create a package to distribute fresher products. This paved its way for In-Er Seal package, whose logo is a prototype for the "Nabisco Thing", an animated character created in 1995 to sell its products to kids. The In-Er Seal package is a system of inter-folded wax paper and cardboard to "seal in the freshness" of the product. At the beginning of his presidency, Green decided the National Biscuit Company, often shortened to NBC, needed a new idea that grabbed the public's attention. He got it when his employees created a new cracker that was flakier and lighter than any of their competitors' versions.

A son of Robert Gair, the package manufacturer, said, "'You need a name,'" and from this sentence came the name "Uneeda."^[11] The Uneeda biscuit looked promising, but Green had to make sure it got to customers fresh, so it was the first to use the In-Er Seal package in 1898. Until then, crackers were sold unbranded and packed loosely in barrels. Mothers would give their sons a paper bag and ask them to run to the store and get the bag filled with crackers. National Biscuit Company used this as part of Uneeda Biscuit advertising symbol, which depicts a boy carrying a pack of Uneeda Biscuit in the rain. In 2009 (after over 110 years), Nabisco discontinued the Uneeda biscuit, concerned that the product was not sufficiently profitable.

20th century

The first use of "Nabisco" was in a cracker brand first produced by National Biscuit Company in 1901.^[12] The firm later introduced—either through development or acquisition— Fig Newtons, Nabisco Wafers (early 1900s, later sold in one form as Biscos, a sugar wafer originally containing a variety of flavored fillings), Anola Wafers (early 1900s, later discontinued; a chocolate wafer with chocolate filling), Barnum's Animal Crackers (1902), Cameos (1910), Lorna Doones (1912; shortbread), Oreos (1912),^[9] and Famous Chocolate Wafers (1924; a thin wafer without filling).

In 1924, the National Biscuit Company introduced a snack in a sealed packet called the Peanut Sandwich Packet. They soon added a second, the Sorbetto Sandwich Packet. These allowed salesmen to sell to soda fountains, road stands, milk bars, lunch rooms, and news stands. Sales increased, and in 1928, the company started to use the name NAB. The term Nabs today is used to generically mean any type of snack crackers, most commonly in the southern US.^[13]

During WWII, the company manufactured K-rations for US troops. The first use of the red triangular logo was in 1952. The company name was changed to Nabisco in 1971.

Brands

The trademarked face of an Oreo cookie

Mergers and acquisitions

Acquisitions

The National Biscuit Company acquired the Shredded Wheat Company, maker of Triscuit and Shredded Wheat cereal, and Christie, Brown & Company of Toronto in 1928, but all of the Nabisco cookie and cracker products in Canada still use the name Christie. It also acquired F.H. Bennett Company, maker of Milk-Bone dog biscuits, in 1931. When Kraft bought Nabisco, it included Christie.

In 1981, Nabisco merged with Standard Brands, maker of Planters Nuts, Baby Ruth and Butterfinger candy bars, Royal gelatin, Fleischmann's and Blue Bonnet margarines, and many other brands. The company was then renamed Nabisco Brands, Inc. At that time, it also acquired the Life Savers brand from the E.R. Squibb Company.

R. J. Reynolds merger

In 1985, Nabisco was bought by R.J. Reynolds, forming RJR Nabisco. After three years of mixed results, the company became one of the hotspots in the 1980s leveraged buyout mania. The company was in auction with two bidders: F. Ross Johnson, the company's president and CEO, and Kohlberg Kravis Roberts, a private equity partnership.

The company was sold to KKR in what was then the biggest leveraged buyout in history, described in the book Barbarians at the Gate: The Fall of RJR Nabisco, and a subsequent film.

Subsequent acquisitions and divestitures

In 1989 RJR Nabisco Inc. sold its Chun King foods division to Yeo Hiap Send Limited and Fullerton Holdings Pte. Ltd for $52 million to reduce its debt from its $24.5 billion buyout by Kohlberg Kravis Roberts & Co.^[14]

In December 1989 RJR Nabisco sold its Del Monte canned fruits and vegetables business in South America to Polly Peck International PLC.^[15] One year later, in 1990 RJR Nabisco sold Curtiss Candy, which owned the Baby Ruth and Butterfinger brands, to Nestle.^[16] RJR also sold LU, Belin and other European biscuit brands to Groupe Danone, only reunited in 2007 after Nabisco's present parent, Kraft Foods, bought Danone's biscuit operations for EUR 5.3 billion.^[17]

In 1994 RJR sold its breakfast cereal business (primarily the Shredded Wheat franchise) to Kraft Foods and the international licenses to General Mills, which later became part of the Cereal Partners Worldwide joint venture with Nestle.^[18] Also in 1994, RJR acquired Knox Gelatin and integrated the Shredded Wheat franchise into the Post Foods portfolio.^[19] Post continues to sell the product today. In 1995 Nestle agreed to buy the Ortega Mexican foods business from Nabisco Inc.^[20] That same year, RJR-Nabisco also acquired the North American margarine and table spreads business of Kraft foods. This purchase included Parkay, Touch of Butter and Chiffon.^[21]

In 1998 Nabisco Holdings announced its sale of its margarine and egg substitute business to ConAgra of Omaha. In 1997 the brands of Fleishmann's, Blue Bonnet and Parkay had sales of $480 million.^[22] It also sold its College Inn broth brand to HJ Heinz^[23] and its Venezuelan Del Monte operations to Del Monte Foods.^[24]

In 1999 RJR Nabisco's food and tobacco empire fell apart when they sold its international tobacco division to Japan Tobacco for $7.8 billion.^[25]

The Altria Group (formerly Phillip Morris)^[26] acquired Nabisco in 2000 for about $19.2 billion. Philip Morris then combined Nabisco with Kraft.^[27] That acquisition was approved by the Federal Trade Commission subject to the divestiture of products in five areas: three Jell-O and Royal brands types of products (dry-mix gelatin dessert, dry-mix pudding, no-bake desserts), intense mints (such as Altoids), and baking powder. Kraft Foods, at the time also a subsidiary of Altria, merged with Nabisco.^[28]

In 2006 Nabisco sold its Milk-Bone pet snacks to Del Monte Foods Co. for $580 million.^[29]

Kraft Foods was spun off from Altria, taking its Nabisco subsidiary with it, in 2007.^[30] In January 2007 Cream of Wheat was sold to B&G Foods.^[31]

Legal battles

In 1997, the National Advertising Division of the Council of Better Business Bureaus^[32] became concerned with an ad campaign for Planters Deluxe Mixed Nuts. The initial commercial featured a man and monkey deserted on an island. They discover a crate of Planters peanuts and rejoice in the peanuts' positive health facts.

Nabisco made a detailed statement describing how their peanuts were healthier than most other snack products, going as far as comparing the nutritional facts of Planters peanuts to those of potato chips, Cheddar cheese chips, and popcorn. Technically, the commercials complied with United States Food and Drug Administration regulations, and they were allowed to continue. However, as requested by the National Advertising Division, Nabisco agreed to make fat content disclosure more conspicuous in future commercials.^[33]

The company's A1 Steak Sauce was the subject of a legal battle against a venue called Arnie's Deli in 1991. The delicatessen was selling and using a homemade sauce called "A2 Sauce." The verdict favored Nabisco.

NASCAR sponsorship

From 2002–2005, Nabisco and Kraft jointly sponsored both Dale Earnhardt, Inc., and Roush Racing. Earnhardt Jr. won four races in a row at Daytona International Speedway with Nabisco sponsorship. Kraft and Nabisco sponsored a part-time Sprint Cup effort in car #81 driven by Jason Keller and John Andretti and fielded by Dale Earnhardt, Inc. Nabisco also sponsored Dale Earnhardt Jr. in the 2010 Subway Jalapeño 250 at Daytona International Speedway in July 2010 with their Oreo/Ritz brands and Tony Stewart with the Ritz brand in the 2010 DRIVE4COPD 300 at Daytona International Speedway in 2010.

References

External links

• Snack Works
• FTC summary of competitive concerns about the 2000 acquisition of Nabisco
• From Oreos and Mallomars to Today's Chelsea Market – The New York Times