A subsidiary of Mars, Inc., Uncle Ben's Inc. is one of the world's leading marketers of rice. It boasts an estimated one-fourth of the United States market for dry rice and ranks number one in Great Britain and France. The company produces a broad variety of rice products, including boil-in-bag, instant, microwaveable, and wild rices as well as cooking sauces, couscous, and fried rice mixes. Uncle Ben's products can be found in over 100 countries worldwide, and the company has production facilities in Australia, Germany, Great Britain, the Netherlands, and Belgium, as well as its Texas headquarters plant. In addition to its namesake brand, Uncle Ben's sells foods under the Country Inn, Suzi Wan, and Kan Tong labels.
Created as a private partnership, Uncle Ben's was acquired from its founders by Forrest Mars' Food Manufacturers, Inc. during its first few years in business. It became a subsidiary of privately held Mars, Inc. in 1964, when Forrest Mars merged his company with his father's confectionery. Uncle Ben's rice is without a doubt Mars' most healthful product intended for human consumption. With estimated sales of over $13 million, the candy giant's other products include Combos snacks; M&Ms, Snickers, Skittles, and other candies; Dove premium ice cream; and Pedigree and Whiskas pet foods. Though the company does not release financial information, author Jan Pottker singled out Uncle Ben's as Mars' best-performing subsidiary in the 1990s.
Under Forrest and his progeny, Mars and its subsidiaries have operated under a cloak of secrecy. For example, while Uncle Ben's has a World Wide Web presence, the site is closed to the public.
Mid-20th-Century Origins
The origins of Uncle Ben's can be traced to the 1930s, when British food chemist Eric Huzenlaub embarked on the development of a process to increase the nutritional value of white rice. At that time, modern milling methods removed rice kernels' nutrient-bearing husk and outer skins, resulting in a pleasingly pearly white, but nutritionally empty carbohydrate. After a decade of research, Huzenlaub came up with a way to seal in rice's naturally occurring vitamins and minerals. Dubbed "conversion" or "parboiling," the technique employed vacuum pressure to pull air from raw rice, then "pushed" the water-soluble nutrients back into each grain using high-pressure steam heating. Once the rice had dried, it could continue through the usual milling process. Not only did the technique--for which Huzenlaub obtained international patents--seal in nutrients, it also extended shelf life to years, made the grain impervious to weevils, and reduced cooking time.
Huzenlaub knew he had developed a food manufacturing process that had the potential to positively revolutionize the diets of millions of people around the world. He intended to establish mills in India (then a colony of Great Britain) and other nations where rice was a dietary staple, but was prevented from doing so by the advent of World War II. Hoping to establish some kind of foothold in the rice industry, Huzenlaub turned to the United States. Though per capita rice consumption was comparatively puny--Americans ate 98 percent less rice per year than Indians--the U.S. was the world's biggest consumer market, and offered immense potential for growth. In 1942, Huzenlaub pitched his process to several major millers, but to no avail. Only one person showed any interest in rice conversion, Houston food broker Gordon Harwell.
Having made his own attempts at converting rice, Harwell was certain of the process's efficacy. He convinced a reluctant Huzenlaub to join him in a partnership known as Converted Rice, Inc. Exhausting his personal savings, Harwell salvaged a boiler and a pressure tank from a junkyard, rented space in a warehouse, and started producing rice to feed the U.S. Armed Forces. By the end of 1944, the company had two mills and was processing about 200 tons of rice each day. One high-ranking Army officer considered the new rice one of the war's most important breakthroughs.
Acquisition by Forrest Mars
Around this same time Forrest Mars, son of candy maker Frank C. Mars, was looking for a new business interest. Forrest was at that time operating his own company, London-based Food Manufacturers, Ltd. Starting out in the early 1930s with $50,000 and the overseas rights to his father's Milky Way candy bar, Forrest had proven highly successful. He acquired a pet food business mid-decade and built it into the industry leader. Forrest returned to the U.S. in 1940, founding M&M Limited to produce and market the bite-sized chocolates with the colorful candy shell. Seeking further diversification, he bought into Converted Rice not long after its founding. Mars' investment and a timely government loan provided much-needed capital for the fledgling firm.
The company took its current name and brand identity from the tale of a Texan who was renowned for his award-winning rice. The story goes that "Uncle Ben," a black farmer, grew rice so good that other farmers used it as a standard of excellence. Since the "real" Uncle Ben had long since died, Harwell asked Frank Brown, maitre d' of a Chicago restaurant, to pose as the character. Brown's beaming, bow-tied, visage became the company logo. This little-known event has been designated a milestone in the history of advertising, constituting the first time a raw commodity was given a brand name. Harwell registered not only the name but also the term "converted" as corporate trademarks.
The launch of Uncle Ben's rice was well-timed. The product was a staple of many soldiers' wartime diet. Government price controls helped support America's relatively young rice-growing industry. At the war's end, Uncle Ben's Converted Rice earned a place among a growing category of convenience foods. Not only did this new product cook up faster than unconverted rice, it was also easier to prepare; so simple, in fact, that Uncle Ben's advertisers boasted that it "cooks up perfect every time." Having achieved the top spot in the U.S. rice market by 1952, Uncle Ben's was launched in the United Kingdom and later France and Austria.
Uncle Ben's started out as a partnership, but it was not long before the infamously imperious Forrest Mars gained full control and made it a subsidiary of Food Manufacturers. By 1960, Uncle Ben's was contributing about $30 million to Food Manufacturers' estimated annual sales of $200 million. Following the death of his stepmother, Forrest Mars wrested control of Mars, Inc. from his step-family in 1964 and merged it with his own firm, making Uncle Ben's a subsidiary of Mars.
Growth Encouraged by Advertising
American rice consumption grew steadily throughout the intervening years, increasing from about six pounds per capita per year in the 1940s to about 10 pounds by the end of the 1970s. As he had with his candies and pet foods, Forrest Mars captured much of this growth by backing Uncle Ben's with hefty advertising outlays. By the early 1990s, LNA/Arbitron estimated Uncle Ben's annual ad budget at $18 million, or well over 10 percent of sales.
This strong ad support would become something of a stumbling block in later years, when many consumers rejected the use of stereotypical images of African Americans in advertising. Such advertising icons as Aunt Jemima, Cream of Wheat's Rastus, and Uncle Ben came under fire, and some were even revised to accommodate modern tastes. While his portrait remained unchanged, Uncle Ben shrunk down over the years from a full-sized image that took up the entire box front to a small oval at the top. In fact, the portrait disappeared from the box in the 1980s. Some observers cast this move as a reaction to consumer protests, but the company asserted that it was merely a marketing maneuver in preparation for a brand extension. The image was eventually reinstated, and remained a brand logo into the late 1990s.
When Forrest retired in 1973, his eldest son, Forrest, Jr., became chairman, CEO, and copresident in charge of the candy division. Younger son Frank was copresident with responsibility for Mars' other products, including Uncle Ben's. Though the Uncle Ben's subsidiary had its own president as well, it was clear that the Mars brothers were the ultimate authority.
Strong Growth Predicted in 1990s and Beyond
In a rare interview with Food Processing magazine, Uncle Ben's executive Tony DeLio noted three food trends that were expected to impact his company in a positive way in the 1990s. As it had since the end of World War II, convenience continued to be an important consideration. Uncle Ben's strove to develop side dishes and "meal helpers" that were easy and quick to prepare. DeLio also emphasized the growing "entertainment" value of foods, particularly those of the ethnic or exotic variety. He also cited responsible eating&mdash-compassing both environmentally and nutritionally sound foods— an important consumer consideration in the 1990s. Uncle Ben's got a little help in this area from the U.S. Department of Agriculture, whose "Food Pyramid" guidelines recommended rice among the carbohydrates that should form the foundation of a healthy diet. Furthermore, the company has benefited and should continue to benefit from ever-increasing rice consumption in its key markets, the United States and the United Kingdom. Per capita rice consumption in the U.S. doubled to over 20 pounds per year from 1979 to 1992.
Uncle Ben's introduced products that met some or all of these factors. Microwaveable rice, rice-in-an-instant, fast-cooking brown rice, and boil-in-bag rice were promoted for their convenience. Country Inn flavored rices, Kan Ton fried rice mix and Eastern Traditions rices, as well as couscous and rice pilafs added variety to the equation. Meal Makers brand cooking sauce and add-meat mix brought Uncle Ben's into the main dish arena. The company entered the "neutraceutical" or "functional food" segment in 1997 with the introduction of rice fortified with calcium, vitamins, and other minerals. Uncle Ben's even signed on Nigerian-born NBA star Hakeem "the Dream" Olajuwon to promote a new brand of rice. Dubbed Hakeem's Dream Rice, the new product was targeted at consumers in the Middle East and Africa.
Uncle Ben's emerged as Mars' most promising growth vehicle in the 1990s, when the parent company lost its U.S. candy supremacy to longtime rival Hershey and its pet food interests struggled to compete in that hotly contested market.
Source: www.fundinguniverse.com
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