Tuesday, July 4, 2017
An American Grocery Tradition
ANSWER: The use of little tins to hold spices goes back to the late 19th century. McCormick spices are widely known as a national brand, but each market and eventually supermarket had its own store brands, as just about all do today. So first let’s look at how these store brands got started.
It all began back in 1859 when John Huntingdon Hartford founded the Great Atlantic and Pacific Tea Company, commonly known as A&P. He peddled coffees and teas out of gold and vermillion horse-drawn wagons and tiny, yet opulent, Oriental-themed retail shops before gradually adding a few kitchen staples like flour, sugar, baking powder and spices to its product mix. He packaged the items he sold with the name of his company, A&P.
Clarence Saunder started the modern self-service supermarket concept in 1916 with his Memphis-based Piggly Wiggly brand. One of the earliest tea companies to break from tradition and cash in on this concept was Danish immigrant George S. Rasmussen's National Tea Company, founded in 1899. Others like Jewel Tea followed. In the beginning, each sold their own brand of goods, but as the small stores grew into supermarkets, each needed to fill their shelves, so they began selling private brands as well.
Early in its history, Chicago-based National built itself into an upper Midwest chain supermarket powerhouse across Illinois, Wisconsin and Minnesota by hitching its future on adopting Saunder's novel supermarket concept. By the end of World War II, National had grown into America's sixth largest grocery chain, comprising 880 small, neighborhood supermarkets sprinkled across Iowa, the Dakotas, Michigan and Indiana, but primarily concentrated around principal strongholds in Chicago, Rockford, Illinois, Milwaukee and Minneapolis/St. Paul.
But following founder Rasmussen's [936 death during the Great Depression, National lost its direction and floundered. Chicago millionaire printer John F. Cunco, who controlled a 26 percent block of stock in what he publicly noted was the worst chain-store property in the country, forced a March 1945 reorganization of the company's management to shake up the laggard, star-crossed chain. Cunco installed fifth-grade dropout-turned-grocery-whiz Harley V. McNamara as National's executive vice-president and Robert V. Rasmussen, son of the founder, as president. In 1947 McNamara was promoted to president, with Rasmussen becoming chairman.
Within a decade of his 1945 appointment at National, McNamara built the industry also-ran into the nation's fifth largest supermarket chain and 10th largest retailer, boosting sales from $107 million to $520 million and profits from $913,000 to $6.5 million by increasing per-store volume some 500 percent. He did this by closing its low-volume, low-profit traditional city neighborhood stores in favor of the postwar shift to larger, modern stand-alone and shopping center supermarkets surrounded by acres of free parking.
But by far the biggest single reason for National's explosive growth during the postwar boom was McNamara's strategy of buying instant market saturation in new geographic areas though the acquisition of local chains in major markets. Still the chain continued to sell its National store brand and placed its items in these acquired stores. Sound familiar?
Eventually, the economy and over-expansion caught up to National while other, newer chains created competition it just couldn’t match. Today, even the trendiest supermarkets offer their own brand of many of the products they sell. And as supermarket chains get bought and sold, the store brands of the survivors endure. It’s an American tradition.