Lehman Brothers Collection - Contemporary Business Archives

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Lehman Brothers Collection

Twentieth-Century Business Archives

Continental Baking Co. - Lehman Brothers Collection

Continental Baking Co.

List of Deals

Continental Baking Company was founded as the Ward Baking Company in New York City in 1849. In 1921 William Ward, grandson of the company's founder, formed United Bakeries, which was renamed Continental Baking in 1925. In 1924 Continental Baking acquired the Wagner Baking Company of Detroit, and in 1925 Continental Baking bought Taggart Baking, the maker of Wonder bread, and was at that time the largest bakery in the United States.

The company was in the business of baking and selling bread, cake, and other related bakery products wholesale. The company owned Hall Baking Company and the Paniplus Company, both wholly owned subsidiaries.

The company's products were sold under two widely advertised tradenames: "Wonder" for its bread products and "Hostess" for its cake products. The bread and cake business was highly competitive. Depending on the locality, the company and its baking subsidiary faced competition from other large baking companies, from the neighborhood bakeries and from chain stores, many of which operated their own bakeries. Price competition was also severe from chain stores operating their own bakeries. Additionally, the competition in all localities from products baked in the home was also present.

Around 1933, Continental Baking introduced Hostess Twinkies. Over the ten-year period from 1945 to 1954, the increase in dollar volume of bread and cake sales was due to a substantial increase in the general price level of bakery products together with some increases in the consumption of the company's line of bread. Substantial increases in bread prices occurred in the latter part of 1946 upon the release of price control that had been in effect during World War II, and again in the spring of 1952 when controls in effect during the Korean hostilities were modified to permit an increase. The cost increases resulted in reduced profit margins despite the various price increases in the products.

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