Celebrating history: As Hormel celebrates 125 years, company leaders look ahead

Published 1:04 pm Sunday, July 24, 2016

As Thomas Day sat earlier this month on the cafe at the north corporate office of Hormel Foods Corp., he joked that he wished he was a few decades younger.

After almost two years chairing the committee planning Hormel Foods’ 125th anniversary celebration, Day’s had much time to ponder the company’s past and outlook for the future.

“I think we’ve all got a lot to be very proud of,” said Day, the vice president of Hormel’s Refrigerated Foods Group. “And I think we’ve got a lot to be encouraged about the future.”

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In 1891, George A. Hormel & Company started operations in Austin and reached about $220,000 in sales that first year. By 1920, sales reached $30 million a year.

The Spam Museum will also be holding its grand opening during the celebration. Jason Schoonover/jason.schoonover@austindailyherald.com

The Spam Museum will also be holding its grand opening during the celebration. Jason Schoonover/jason.schoonover@austindailyherald.com

With Hormel Foods Corp.’s 2015 sales at around $9.3 billion, up from about $2.8 billion in 1991, CEO and Chairman of the Board Jeffrey Ettinger said it’s been an exciting time to watch the company grow.

“So substantial growth,” Ettinger said. “Some of the mainstay items are still doing great for the company, including Spam or Hormel Pepperoni or Cure 81 Hams, but we clearly have added a lot of new franchises over the last 25 years as well.”

As Hormel Foods celebrates 125 years in Austin, company leaders are looking back over many successful years and ahead toward new things coming in the future.

Day started with Hormel in 1981, and he credited the leadership of past CEOs Dick Knowlton and Joel Johnson along with Ettinger for getting the company to where it is today. And Ettinger has help in the company’s highest ranks, as the company named James Snee its 10th president last year.

“I would tell you as I sit here today, after 35 years with the company, I think it has the potential to be an even better company in the future as the result of, I’d say Mr. Snee’s leadership into the future, Day said.

Day sees a bright future ahead with Snee and the young people the company has brought in.

“I personally think the best days are yet to come for HorAcross the county and the world, it’s a time of celebration at Hormel’s various sites as the company has been able to celebrate the company, learn about it and the company’s legacy.

“I like to talk about people investing and taking ownership in the company, and there’s days when it feels like Mr. Hormel’s still walking around some of the halls and his thought of ‘Originate, don’t imitate’ is still alive and well within our company and our culture today, and I think that’s something we can all be very proud of,” Day said.

 Expanding with purpose

In May 2016, Hormel Foods acquired Justin’s LLC, a maker of nut butter spreads and products, for $286 million. The Justin’s purchase came after the company had made several large acquisitions in recent years, including: Applegate Farms for $775 million, Wholly Guacamole for about $140 million, CytoSports Holdings for $450 million, and Skippy for $700 million. Those represent four of the largest five acquisitions in the company’s history.

At Hormel’s annual shareholders meeting in January, company leaders outlined how those four acquisitions tie into the Hormel’s four main target areas for growth: healthy and holistic, multicultural, global and on-the-go.

But innovation within the company is also a key to Ettinger. Along with acquisitions and new products, the company is also targeting on-the-go products. This includes the REV Wrap item and the Skippy P.B. Bites developed after Hormel acquired the peanut butter line.

“This clearly is a continuing theme going forward,” Ettinger said.

And the company expects more growth. Hormel has acquired several brands in recent years at a time when Hormel leaders see them as primed for growth. With businesses like Applegate Farms and Justin’s, Hormel leaders say they’re able to give the smaller companies a boost with the backing of Hormel’s research and development expertise and distribution capabilities.

Looking at Hormel brands like Justin’s, Applegate Farms and CitoSport, Ettinger still sees much growth to come.

“If you think about them, they’re still really quite new to our organization,” Ettinger said. “We’re just scratching the surface and getting started with the kind of growth and excitement that those items can lend the portfolio. So it’s going to be fun to see over the next few years the contribution that those items make coupled with the great items that our company’s had in the core portfolio for many years.”

 Roots for growth

But Ettinger recalled Hormel Foods’ 100th anniversary in 1991, as he traced some of Hormel’s recent growth the that time.

The Food Service group was just starting, and he said that is now a great contributor to the company. The company acquired Jennie-O back in 1986, and he said that’s expanded a lot in recent years.

The microwave meals business traces to the late 1980s and has grown, while the company had started its Chi-Chi’s joint partnership, which has expanded into the joint Megamex venture with Herdez del Fuerte for authentic Mexican food products.

“It’s just fun to see that the mainstay items are still a key part of the company, but we’ve also really been able to expand our footprint quite a bit as well,” Ettinger said.

The company’s international division has seen strong growth in recent years, as Ettinger said Spam continues to thrive in markets like Korea and the Philippines. Hormel will be reintroducing Spam to China in early next year with a plant in Jiaxing, Zhejian province.

“With the new plant we’re building over there, we’ll be able to have a Spam line right in that plant and so now we’ll be in a good position to have that keep growing,” Ettinger said.

Hormel’s Skippy acquisition came with a team in China and sales markets in more than 50 countries, so he said the company now has contributors that can carry Spam and Skippy as tandem items.

“It has aided the growth of both of them,” Ettinger said.

Here in Austin, Ettinger has seen recent growth through the REV Wrap line’s addition to the Austin plant and some other new things in the plant and corporate office expansion.

Hormel is building a new research and development microbiology and chemistry lab north of Hormel’s corporate office near Todd Park, which will create additional space at the current R&D labs. Plus the Spam Museum’s move opened up additional space at the company’s south corporate office, where the international team and some payroll offices have moved.

“That’s enabling us to continue to support the growth of the company as well,” Ettinger said.

Ettinger noted the company needed the additional space, as it’s corporate offices were getting pretty full.

Day described Hormel’s 125th anniversary celebration, especially with the festivities planned in Austin July 24-29, as a time to sit back and see how far the company has come in 125 years.

“I think it will be a time for some of our senior statesmen to reflect on what really has happened in the last 25 years within the company and it’s been an exciting time to be a part of Hormel Foods,” Day said.

After living in Austin more than two decades, Day said people can forget how rare it is to have a 125-year-old Fortune 300 business in a town of about 24,000.

“There’s times we forget what Hormel Foods may mean both domestically as well as internationally,” he said. “And I think it’s an important time for people to reflect on.”

Day has worked with Hormel for 35 years and he’s lived in Austin since 1997. In that time, he’s been a big supporter of the community and has seen many changes for the better, from work with Vision 2020, Austin Public Schools and more.

“I’m an Austin supporter,” he said.

Along with calling Austin a wonderful place to raise a family, Day said the community has benefitted from the talent brought into the community through Hormel.

Day has also seen Hormel grow. While he said Hormel was a good company when he started in 1981, it’s a better company today through the leadership of Knowlton, Johnson and Ettinger.

 A strong foundation

To Ettinger, an important part of founder George Hormel and his son Jay Hormel’s legacy is the creation of The Hormel Foundation in the 1940s, as he called The Foundation “the glue that ties Austin and Hormel together.”

The Foundation holds a controlling interest in the company, and Ettinger said that allows the company to move ahead with a long-term perspective.

“In this day and age of activist investors and hostile takeovers and all those things going on … that was a key move of many years ago to put us in a position where we didn’t have to worry about that kind of noise, and we could instead focus on growing our connection with consumers and having, [and] being a place where someone could make a long-term career, because they knew we’d be around,” Ettinger said.

Plus, The Foundation in turn supports Austin through annual grants, as it’s set to give $7.8 million in community grants this year, which doesn’t include The Foundation’s support for The Hormel Institute cancer research center and Vision 2020 projects. In 2015, The Foundation gave a total of $21.4 million.

Especially as Hormel Foods dividends have grown, so too has The Foundation’s role in the community.

“It’s been a key component of the community for many years, but it’s really stepped up its visionary work in assisting projects that otherwise might not get done,” Ettinger said. “They’ve had, I think, excellent leadership in that regard.”

 A tight-knit community

To Hormel leadership, it’s important to celebrate in Austin, the company Hormel has called home for 125 years. Emily Mason, a Hormel Foods marketing manager, worked on the 125th anniversary committee and was one of about 30 people who helped plan the celebrations at Hormel locations around the globe. Mason called the Austin celebration special, as they will peak with The Band Perry’s 8:30 p.m. July 29 concert downtown outside the Mower County County Jail and Justice Center.

“Hormel and the Austin community are very tight-knit with each other and this is an opportunity to give back to the community so to speak, bring in a number of people to be exposed to our downtown area, that hopefully will return downtown,” Mason said.

In looking back over his time in Austin, Day described Hormel as having a unique connection with Austin, as he said people with the company work with many people during the day and then attend church, sporting events, school concerts and more with them during the week and weekends.

He went on to say it makes for a good place to grow personally and professionally. However, Austin is not downtown Chicago, and he said he loves the size of this community.

“There’s a unique aspect here that, to be quite honest with you, does differentiate our company from other large, Fortune 300 companies,” Day said, calling “it special” to those who like something like the small town feel. mel Foods,” Day said.