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Pet Incorporated - Lehman Brothers Collection

Pet Incorporated

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Formerly the Pet Milk Company, Pet is the successor to the Helvetia Milk Condensing Company, organized in 1885 in Highland, Illinois. By the end of its first year, the company had gained recognition in the South for its evaporated milk. The fledgling company donated ten cases of its product to victims of a Galveston, Texas, fire, and an El Paso, Texas, grocer ordered 100 cases after successfully feeding the milk to his ill infant. Helvetia suffered a setback the next year, when numerous cases of milk spoiled on grocers' shelves. Louis Latzer, the company's president, and Dr. Werner Schmidt investigated the bacteria that caused the milk to spoil. Their efforts eventually succeeded, and in the process Latzer had automated the company's plants, introducing faster production as well as safer canning processes and lower consumer costs.

In 1887 Helvetia won an award for excellence from the Mechanics Industrial Exposition in San Francisco. During the early 1890s the company began to promote its evaporated milk in several key markets: as a healthful baby food; as a recipe base; and as a milk-substitute for Southern areas with little refrigeration and for mining regions in the western United States. Responding to the request of a New Orleans food broker for a "baby-sized" can to sell for a nickel, the company introduced "Our Pet Evaporated Cream."

During the Spanish-American and First World Wars, the U.S. government ordered huge supplies of evaporated milk, spurring the company to build a second plant. By 1918 Helvetia had a total of ten production sites in the Midwest, Pennsylvania, and Colorado. As World War I ended, Helvetia closed plants due to oversupply, reluctantly pulling out of western markets. In 1923 the company was renamed Pet Milk Company, after its best-selling evaporated milk brand. Within two years Pet Milk bought the Sego Milk Products Company based in Salt Lake City, giving Pet Milk more depth in the milk supply, as well as a chance to reenter the western American market. In the late 1920s the company built new plants and made a number of acquisitions, including an ice cream plant in Greenville, Illinois, and a milk processing plant in Johnson City, Tennessee. In 1928 Pet Milk was first traded on the New York Stock Exchange, and the following year the Pet Dairy Products Company was established. By 1934 Pet Milk became the first company to add vitamin D to its dairy products via the process of irradiation.

After World War II, Pet Milk began a slight movement into other markets. The company became the first to offer nonfat dry milk, an advance over the powdered milk developed in the 1920s. Pet Milk acquired its first nondairy operation in 1955: the Pet-Ritz Foods Company in Michigan. To initiate growth outside the United States, Pet Milk also established a Canadian subsidiary to produce and sell goods.

The company began a program of restructuring during the early 1960s. Pet Milk reduced committee members, initiated a profit-centered divisional structure, and recruited marketing professionals. The company also planned new product development to wean itself from the declining milk market. Pet Milk also began to diversify in earnest. Within two years, the company bought a variety of food producers, including the C.H. Musselman Company, Laura Scudder's, Downyflake Foods, Stephen F. Whitman & Son, Inc., and R.E. Funsten Company, the largest U.S. pecan producer at the time. These acquisitions brought Pet Milk a total of approximately $90 million in sales. Through its Canadian subsidiary, the company also acquired Van Kirk Chocolate, Cherry Hill Cheese, and the Numilk Division of Dominion Dairies. In 1963 the company bought the Dutch-based C. V. Gebroeders Pel, a producer of jelly and other confections. Pet Milk was moving away from commodity products and toward specialty and snack foods, which were considered high-growth markets. In 1964 the company moved into the gourmet foods market, buying Reese Finer Foods, Inc., and D. E. Winebrenner Co., a fruit-juice maker. The following year, Pet Milk acquired George H. Dentler & Sons, a snack food company, and Stuckey's, Inc., the latter marking Pet Milk's first non-processing venture in the food industry.

Pet Milk created a new market with its 1962 introduction of Pet-Ritz frozen piecrust shells. Another of the company's successful products at that time was Sego Liquid Diet Food, introduced in 1961. By 1965 Sego brought in $22 million to the company's Milk Products Division sales. As Pet-Ritz frozen-pie products and Musselman applesauce met stiff competition, Pet Milk worked to carve its own position in the market by developing specialty items like quick-bake pies, no-bake pies, and chunky-spicy applesauce. The company changed its name to Pet Incorporated in 1966 and merged with the Hussmann Refrigerator Company. Pet bought a controlling interest in the Mexican-based American Refrigeration Products S.A., a company partially owned by Hussmann that was expanding into Guatemala. Pet also acquired Atlanta-based Aunt Fanny's Bakery, and the following year it bought Schrafft restaurants for $14 million. In 1968 the company made a key acquisition, purchasing the fifty-year-old Texas-based Mountain Pass Canning Company, maker of the Old El Paso brand. Within two decades, Old El Paso products brought $170 million in sales to Pet. Funding for these acquisitions came largely from a special credit Pet obtained through the sale of its portion of General Milk Co., a joint venture made with competitor Carnation Company in 1919. Pet gained $30.8 million on the sale, originally having paid $875,000. Pet also arranged agreements in many foreign countries during this time, including Spain, Sweden, Costa Rica, and Chile.

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