National Dairy Products Corporation
List of Deals
- 1925 acquisition of Sheffield Companies and issue of 15-year 6% collateral trust notes
- 1962 $35,000,000 4 3/8% sinking fund debentures due March 15, 1992
The National Dairy Products Corporation was organized in New York City and incorporated in Delaware in December 1923. It was formed for the purpose of acquiring the common stock of the Rieck-McJunkin Dairy Company of Pittsburgh and the Hydrox Corporation of Chicago, two of the largest manufacturers and distributors of ice cream and dairy products in the United States. Management of the new company was made up the heads of both acquired firms: Edward E. Rieck, President of Rieck-McJunkin, who became chairman of National Dairy, and Thomas McInnerney, president of Hydrox, who became president of the new firm. The organizers of this new company expected that it would take its place among other large distributors of food that were being formed during this period. The business plan entailed purchasing or constructing a series of plants through the acquisition of existing businesses, which would be strategically located throughout the country. Each subsidiary was to retain its own name and personnel. This strategy was expected to require lower inventories, more rapid turnover, and shorter credits.
Within months after forming, National Dairy began acquiring other companies. In 1925 alone it acquired eighteen companies. By 1926 it possessed several well-know dairy firms including Breyer Ice Cream of Philadelphia, Harding Ice Cream of Nashville, and Sheffield Farms of New York. In 1926 National Dairy was operating in 1,600 cities and towns in thirteen states from New York to Nebraska. Earnings in 1925 were $4.9 million from sales of $105.3 million.
National Dairy employed approximately 35,000 people by 1930 and earned $26.3 million from sales of $374.6 million. On the basis of both sales volume and profits it claimed the honor of being the largest food products company in the country by a wide margin. Soon, National Dairy began acquiring companies outside of dairy products, purchasing Deerfoot Farms of Boston, a manufacturer of sausages. It also formed National Juice Corporation to produce orange juice in Tampa, Florida, which was then distributed through regular milk routes.
National Dairy made its largest acquisition to date by adding Kraft Phenix Cheese Corporation in 1930. Since Kraft alone earned over $86 million, this brought National Dairy's sales up to over $400 million.
Sales and earnings growth moderated for National Dairy during the 1930s. The retail milk distribution industry was particularly competitive and highly regulated so the company attempted to diversify its line of manufactured milk products.
In 1940 National Dairy earned $11.1 million on sales of $347.4 million. Demand for milk, cheese, and other dairy products soared during the wartime years for both civil and military customers. In 1941 the company reported record earnings of $83.6 million on sales of $431 million, and in 1944 new records were set again when the company achieved sales of $593.9 million. Sales to the U.S. military represented a significant portion of these sales. Deliveries to the U.S. government in 1944 included 48 million quarts of milk, 8.5 million gallons of ice cream, 101 million pounds of cheese, 23.5 million pounds of butter, 500,000 pounds of other Army and Navy ration spreads, ten million pounds of margarine, 4.5 million pounds of powdered milk, one million cases of evaporated milk, 769,000 gallons of salad dressing and three million cans of Tushonka, a Russian Army meat ration.
In the post-war years of 1945 through 1960, National Dairy spent more than $100 million expanding and modernizing plant and equipment as well as the building a new research laboratory. In 1948 sales reached $986.4 million, the highest in the company's twenty-five-year history.
During the 1950s National Dairy continued to invest heavily in new equipment, spending $230 million between 1945 and the end of 1953. In 1956 the company acquired Metro Glass Company, a maker of glass containers used by National Dairy. The company also constructed new plants in Germany, Australia, and England, one indicator of the growing importance of non-U.S. sales to National Dairy. In 1961 it also entered the fish business by purchasing Green's Products, Ltd., the largest canner and distributor of tuna fish and salmon in Australia.
In 1962 increasing consumption of dairy products by the U.S. public, aided by the introduction of new products and advertising, helped lift sales for National Dairy to a record $1.82 billion. These new products included a liquid high-protein weight control product called “Sealtest 900 Calorie Diet.”