The Andersons, Inc. History

Address:
480 W. Dussel Drive
Maumee, Ohio 43537
U.S.A.

Telephone: (419) 893-5050
Fax: (419) 891-6670

Website:
Public Company
Incorporated: 1947
Employees: 3,035
Sales: $1.09 billion (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: ANDE
NAIC: 115114 Postharvest Crop Activities; 311119 Other Animal Food Manufacturing; 325320 Pesticide and Other Agriculture Chemical Manufacturing; 325312 Fertilizer Manufacturing; 422510 Grain and Field Bean Wholesalers; 422990 Other Miscellaneous Non-Durable Goods Wholesalers; 441320 Tire Dealers; 444110 Home Centers; 444210 Outdoor Power Equipment Stores; 444220 Nursery and Garden Centers; 488210 Support Activities for Rail Transportation; 532411 Commercial Air, Rail, & Water Transportation Equipment Rental and Leasing

Company Perspectives:

We firmly believe that our company is a powerful vehicle through which we channel our time, talent and energy in pursuit of the fundamental goal of serving God by serving others. Through our collective action we greatly magnify the impact of our individual efforts to: Provide extraordinary service to our customers; Help each other improve; Support our communities; Increase the value of our Company. Key Dates:

Key Dates:

1947:
The Andersons partnership builds a grain elevator in Maumee, Ohio.
1952:
Operations expand to include retail outlet Warehouse Market in Maumee.
1959:
Fertilizer production begins.
1968:
12.1 million bushel grain elevator built in Champaign, Illinois.
1972:
Annual sales reach nearly $200 million.
1979:
Economic challenges as grain receipts peak and exports decline.
1986:
Focus shifts to domestic grain production.
1996:
The Andersons operations are consolidated and the company goes public on the NASDAQ.

Company History:

The Andersons, Inc. operates a network of closely related businesses, based in Ohio, Michigan, Indiana, and Illinois. The Agricultural Group encompasses the company's traditional area of activity--grain storage and wholesale operations. Several grain elevators serve farmers with a systemwide capacity of 80 million bushels of grain. Nine retail farm centers offer seeds and crop protection chemicals for sale, as well as soil testing, equipment rental, and other services. The Retail Group consists of six home centers in Ohio that sell building materials, housewares, specialty foods, lawn and garden supplies, pet supplies, and many other items. Products manufactured by the Processing Group include lawn fertilizer as well as consumer and industrial products utilizing corn cobs from the company's cob milling operations. The Manufacturing Group provides custom steel fabrication and rail car repair services, manages the company's rail car lease fleet, and offers rail cars for sale or trade.

Getting Off the Ground in the 1940s

Anderson's Elevator Company (AEC) experienced two business failures, in 1937 and in 1940, before establishment as a successful enterprise in 1947 as The Andersons. Harold Anderson left the National Biscuit Company (Nabisco), where he managed a flour mill in 1936, to form a grain storage and wholesale business with his father and wife. Anderson sought to attract a high volume of farmers to his grain elevator by paying higher rates for their grain. This would be made possible by transporting grain to eastern states by rail and water transportation, a less expensive alternative to the general practice of using rail only. Anderson negotiated with the Wabash Railroad for installation of railroad tracks along the elevator where long shafts transferred grain directly to the rail cars. The side track was within the proper boundaries to be included in the rate structure of the main rail line, also minimizing transportation costs.

With transportation organized, AEC began construction on a modern, concrete grain storage elevator, with the capacity to hold one million bushels of grain. The facility was located on farmland Anderson had acquired in Maumee, Ohio, near Toledo, and the farmhouse became the company office. Overworked in the final weeks of construction, a car accident in late June prevented Anderson from properly attending to the business when the company began to accept grain in July. Circumstance forced him to close the company, and AEC leased the grain elevator to Continental Grain Export Company.

After physical and emotional recuperation, Anderson sought to restart AEC in 1940. He negotiated with the Wabash Railroad to transport grain and grain products to marine vessels for $4.50 per rail car, and he built a marine transfer unit to ease movement of grain from land to lake. With low transportation costs, AEC would purchase grain by the truck load at volume prices. AEC regained control of the first grain elevator and added a second, which provided storage for an additional two million bushels of grain. Anderson contracted with Cargill, Inc. to handle 1.5 million bushels and with the Farm Bureau Cooperative Association to handle one million bushels. This second venture failed for a variety of reasons, including the small size of farm trucks, inadequate roads, the farmer's distrust of the new method, and lack of effective communication with customers. In addition, a dispute with the Flour, Feed, and Grain Elevator Workers Union began on August 6, 1940 and continued through the harvest season, until November 30. After heavy financial losses the company closed in 1941.

Anderson's third attempt to operate his own grain handling business began in 1946 after his sons returned from military service during World War II. In the intervening years Anderson had renewed his sense of purpose and clarified his goals toward better service to farmers. He felt certain that transporting grain from land to sea provided the greatest advantage to farmers. The mission of the new company reflected values of hard work, honesty, and service to others and the community. Committed to his dream to operate a business with his wife, daughter, and five sons, the new company was named The Andersons.

The slogan 'Farmers First' reflected the company's commitment to assist farmers in getting their grain to the market. In 1947 The Andersons began construction on a 500,000-bushel grain storage facility with nine truck dumps to quickly serve farmers as they unloaded. To resolve previous problems of misunderstanding and distrust, the company formed an advisory board composed of local farmers and provided reports of each day's grain prices on Toledo and Fort Wayne radio stations. The Anderson family succeeded as Harold Anderson's ideas coalesced with post-WWII growth and development. The quality of roads and trucks improved, allowing farmers to travel as far as 150 miles to benefit from the higher grain prices offered by TA.

Success and Expansion in the First 25 Years

The company augmented its grain storage capacity continually, beginning with the addition of a 500,000-bushel grain elevator in 1950 and a three million-bushel storage facility in 1953. Construction on the latter attracted disdain from building trade unions, as well as attention from the national media, which labeled the project 'The Big Pour.' Area farmers, company employees, and 225 college students worked 12 hours a day, around the clock, to complete the project in 12 days. At the new facility grain could be inspected and unloaded at the rate of 125 trucks per hour.

The Andersons endeavored to supplement the company's primary activities in ways that served the farmers. The Warehouse Market opened in 1952, offering reasonably priced seed, livestock feed, motor oil, fertilizer, and other farm supplies to farmers who would otherwise return home with empty trucks. A grain drier was added in 1952, and in 1954 construction began on a corn shelling plant. The Anderson Cob Mills Inc., officially established in 1958, sold the leftover corn cobs for use in the production of metal polishes, industrial cleaners, cosmetics, and other products. By the mid-1960s the plant grew to accommodate eight times more corn than its original volume.

After completion of the St. Lawrence Seaway in 1959 enabled more efficient water transportation to markets in Canada and eastern states, The Andersons opened the River Elevator, a 500,000-bushel grain elevator, and another marine transfer unit in Toledo on the Maumee River. The original Maumee site's 1959 grain storage capacity tripled to ten million bushels with the enhancement of 22 steel storage tanks. Capacity grew for an additional 1.5 million bushels at the River Elevator in 1964, while four express grain truck dumps added at Maumee in 1966 facilitated faster grain inspection and purchase.

The Andersons began to venture into activities on the periphery of agriculture as well. Production of lawn fertilizer began in 1959, initially mixed in a dormant concrete mixer. That business expanded with the construction of a mixing plant in 1963, a manufacturing plant in 1964, which also produced lawn herbicides and insecticides, and the addition of eight steel storage tanks in 1966. A feed mill, constructed in 1968, produced reasonably priced animal feed for domestic livestock, family pets, and zoological animals.

The Andersons added a Farm Supply Sales Office in Maumee and expanded retail operation to Toledo suburbs. The sales office was added in 1969 to better assist farmers in choosing from the wider variety of goods then available, such as building and fencing materials, various agricultural chemicals, grain bins, and other farm equipment. Supplying tires to farmers led to the opening of four tire shops at this time: Sylvania in 1969, Maumee and Oregon in 1971, and Toledo in 1973. The company opened a Garden Center in Dublin in 1967, and in Berwick and Sylvania in 1970. In 1972 the Warehouse Market moved to a larger, 155,000-square-foot building, on a 25-acre company complex across the street. Renamed the Maumee General Store and Garden Center, the store benefitted from new housing developments and drew customers from northwestern Ohio and southeastern Michigan with a wide selection and reasonable pricing.

A Second Generation Leads the Way in the Late 1960s

Under the leadership of a second generation, with John Anderson as CEO, The Andersons moved outside of northwestern Ohio for the first time in 1968. Construction began on a grain storage facility in Champaign, Illinois, which held 12.1 million bushels of grain. It was the first grain elevator in the United States to incorporate 'unit train' stations into its design. The 100-car unit trains could transport grain farther at less expense, so when the price of oil rose in the 1970s, unit trains kept the company's costs down. The company also sought to help farmers with the cost to transport their grain by locating facilities near the farmers. In 1975 a four million-bushel storage facility at Delphi, Indiana was built to serve that corn-growing region. A General Store and a Tire Shop opened in Delphi in 1976, and a Cob Mill began to process 100,000 tons of corn annually.

High oil prices proved to be a boon to agriculture as they initiated a worldwide increase in available credit and, in turn, increased the worldwide demand for grain. The Andersons transported grain by rail and boat from Maumee to the North Atlantic ports for export, and the Champaign and Delphi facilities utilized unit trains to transport corn to ports on the Gulf of Mexico. In Maumee, grain storage capacity increased three million bushels to 17 million bushels. At the Toledo elevator the company added steel tanks with a capacity for five million bushels, bringing The Andersons's total grain storage capacity to 40 million bushels. The Andersons handled 62.1 million bushels of grain in 1970 and reached a pinnacle at 174 million bushels in 1979 as a result of the worldwide demand for grain.

Andersons continued to grow in all of its areas of business activity. In 1976 the company formed the Seed and Chemical Division, which provided agricultural chemicals, lawn and garden fertilizers, and seed for corn, wheat, soybeans, oat, barley, and rye, to suppliers in Ohio, Michigan, Indiana, Illinois, and western Pennsylvania. Construction on a new Feed Mill in Maumee was completed in 1977.

Although TA's business had always been subject to fluctuations in crop yield, changes in the 1980s compelled the company to diversify as a means to overall company stability. The availability of credit in the 1970s disintegrated in the 1980s due to the escalation of grain prices above genuine value. Farm production in the United States decreased when foreign competition prompted government policies to provide remuneration to farmers who leave some acreage dormant. The Andersons responded by placing greater emphasis on the retail businesses and on new products, and by taking a new approach to agricultural activities.

The company shifted to a system of country elevators in the early 1980s. Grain storage facilities were leased or purchased in Frankfort, and in Dunkirk, Indiana, and Findlay, Ohio, and a joint venture provided a facility in Weberville, Michigan. Construction in White Pigeon and Albion, Michigan included unit train stations that loaded grain directly from the elevators. Management agreements with grain elevators in Bunker Hill, Indiana in 1986 and in Constantine and Mendon, Michigan in 1987 further expanded The Andersons's country elevator system.

The Andersons utilized existing facilities to expand its capacity for wholesale fertilizer distribution. In Delphi fertilizer storage added in 1980 accommodated 50,000 tons, and in Champaign a facility to accommodate 35,000 tons of fertilizer was added in 1983. A 35,000-ton fertilizer storage facility as well as an Ag Products Warehouse supplemented business in Dunkirk, Indiana and in Weberville, Michigan. The Andersons added a 50,000-ton fertilizer storage facility in Toledo, and it expanded and upgraded the Maumee lawn fertilizer plant.

Retail operations expanded independently and through joint ventures. The Toledo General Store opened in 1984 and in Columbus the Brice General Store opened in 1986 and the Sawmill General Store opened in 1987. In 1988 the Woodville General Store opened in Northwood, Ohio. The company also leased Blonde's Farm Supply outlets in Litchfield and in North Adams, Michigan in 1986. Joint ventures included Tireman in Toledo in 1983 and Hubbard Feed in 1984. A joint venture with Jones Wheel Horse in 1989 took the company into the business of outdoor power equipment.

The Processing Group's enterprises comprised both consumer and industrial products in the 1980s. The Lawn Fertilizer Division adopted a more consumer-oriented marketing strategy and developed the trademarked Greensweep lawn fertilizer in 1985. Two liquid fertilizer plants acquired in Indiana provided the necessary facilities for expanded production in this division. A separate Pet Division was established in fall 1986 and expanded in 1987 when The Andersons acquired an interest in B & R, a distributor of pet products. In 1988 the company developed Slikwik Sorbents, a trademarked line of products, which utilize corn cob and synthetic ingredients for the absorption of industrial fluids and chemicals, grease, and liquid waste.

Building on Success in the 1990s

The Andersons kept pace with industry changes as the Retail Group renovated stores and added a new General Store in Lima, Ohio. The stores averaged 110,000 square feet with several distinctive departments, following the trend toward 'a-store-within-a-store.' New departments at these stores included Leisure Time, Home/Office products, Home Projects, Auto Care, a gourmet foods, wine, and flower store called 'The Uncommon Market,' and others.

The Andersons expanded into the business of rail car repair by opening the in-house repair shop, in operation for 50 years, to the other businesses. A new repair shop facility in Maumee accommodated custom steel fabrication as well as rail car repair services. The venture included a marketing office to handle the lease, purchase, and sale of rail cars.

The company's traditional agricultural business grew with the further addition of country elevators. The company purchased five storage elevators, two in Indiana, two in Ohio, and one in Michigan, as well as nine retail farm centers. In June 1996, the company leased the Rice Terminal elevator in Toledo, which served the horse racing business with TurfClub brand of bag oats. The storage facility, renamed The Anderson Reynolds Road, contained 38 storage bins, each capable of holding 2,200 to 36,5000 bushels of grain.

In November 1996 The Andersons sold its Slikwik Sorbents line of products to Sorbents Products Co. Inc. The sale included informational literature, the brand, its trademarks, and customer lists. Andersons Cob Division continued to supply corn cobs for production of the sorbents. The two companies also agreed to a non-exclusive licensing agreement for DriZorb, a line of products that sponge liquid waste in waterways and on dry land.

Organizational changes in the 1990s led to a public offering of stock in February 1996. The Andersons merged with Andersons Management Corp. to become The Andersons, Inc. (TAI). An independent appraiser placed TAI shares at $8.60, the price offered to employees. The initial stock offering priced at $15 per share, but dropped to $7.63 by the end of the year.

Competition from Home Depot, Builder's Square, and other home stores required a fresh approach in the Retail Group. Prior to the opening of a nearby Home Depot, a 10,000-square-foot indoor garden center was added to the Toledo General Store. The company reorganized all six General Stores, adjusting the sales area of each department in accordance with sales of the preceding years. Service improvements involved point-of-purchase signage and the 'We'll Load It' program. While bulk items, such as sand and lumber, were loaded by employees, the customer carried a UPC-coded ticket to the cashier. In March 1997, the company launched a print, television, and radio advertising campaign featuring the slogan, 'For all things that you are, Andersons.' In addition, The Andersons opened a greenhouse at the Maumee General Store.

The Andersons engaged in cooperative activities with other agricultural service companies in 1998. In March, The Andersons and Cargill, Inc. merged their grain storage businesses in Toledo. The Andersons leased two grain elevators from Cargill in Toledo and Maumee, and Cargill agreed to sell its grain to The Andersons and to make their global export network accessible to TA. As rural elevator companies have garnered a greater share of the storage market, the arrangement was expected to provide greater efficiency and revenues to both companies. With Central Soya Co., Inc., Anderson purchased DeKalb Agra Inc. of Waterloo, Indiana. The Andersons procured that company's retail farm and fertilizer assets, and Central Soya procured the grain storage and transportation facilities. In addition, in cooperation with International Raw Materials, Ltd., The Andersons formed a limited liability company that would manufacture lawn and garden fertilizers and ice melt products to markets in the northeastern United States.

In 1998 The Andersons acted to enhance all of its business areas. The Manufacturing Group added 1,000 rail cars to its fleet, increasing the number available for lease to more than 3,800 rail cars. The Retail Group evolved its marketing strategy under the idea of the 'Complete Home Store,' which included housewares and domestic goods. Improved merchandise displays, a private label brand of paint, and wallpaper were added. The Processing Group planned to place greater emphasis on in-house product development and has been working on a proprietary cat litter using corn cobs. A stock transaction in January 1998 brought the Crop and Soil Service, Inc. retail farm stores into the Agriculture Group. The company also added six retail farm centers in Ohio, Michigan, and Indiana through either lease or purchase in 1998 and early 1999.

In March 1999 The Andersons became one of the largest producers of polyphosphate liquid agricultural fertilizer east of the Mississippi River through the purchase of a Cargill fertilizer production facility and wholesale distribution center in Seymour, Indiana. The plant, the company's fifth, offered a prime location for road and rail transportation and also brought a new product to the company--pelletized lime for soil ph balance. In June The Andersons further expanded its manufacturing capabilities for lawn and garden products with the acquisition of another facility in Montgomery, Alabama. A third generation took the lead at The Andersons as Mike Anderson, grandson of Harold Anderson, became CEO in 1999.

Principal Subsidiaries: Andersons Ag Products; Andersons Agriservices, Inc.; Andersons Grain Corp.; Crop & Soils Service, Inc.

Principal Operating Units: Retail Group; Agricultural Group; Processing Group; Manufacturing Group.

Principal Competitors: Archer Daniels Midland Company; Cenex Harvest States Cooperatives; Cargill, Inc.; Home Depot; Payless Cashways.

Further Reading:

  • 'Anderson Share Price Down, But Few Worry,' Toledo Blade, December 10, 1996, p. 27.
  • 'The Andersons Acquires Alabama Lawn Fertilizer Plant,' PR Newswire, June 18, 1999.
  • 'The Andersons Acquires Cargill's Seymour Wholesale Fertilizer Facility,' PR Newswire, May 27, 1999, p. 9120.
  • 'The Andersons, Cargill Sign Pact with Ohio Facilities,' Feedstuffs, April 27 1998, p. 19.
  • 'The Andersons, Central Soya Buy Co-Op,' Feedstuffs, August 3, 1998, p. 6.
  • 'The Andersons Expands Ag Group To Process, Bag Oats for Racehorses,' Milling and Baking News, June 25, 1996, p. 17.
  • 'The Andersons: 50 Years of Service, Growth, and Change,' Andersons Herald, company publication, October 1997.
  • 'The Andersons Going Public in 49th Year of Business,' Milling and Baking News, February 20, 1996, p. 53.
  • 'The Andersons Hones Mix; Adopts New `Shop' Approach,' Discount Store News, September 2, 1991, p. 1.
  • 'The Andersons Is a Store for all Reasons,' National Home Center News, August 9, 1999, p. 87.
  • 'The Andersons Names New CEO,' National Home Center News, January 11, 1999, p. 7.
  • 'The Andersons--Service Still Prevails Nearly 37 Years Later,' Anderson Herald, company publication, Special Issue, 1983.
  • 'The Andersons to Acquire Farm Centers,' Feedstuffs, January 26, 1998, p. 21.
  • 'Appointments Bring Management Changes to the Andersons,' Do-it-Yourself Retailing, October 16, 1996, p. 100.
  • 'CEO Interview--Richard P. Anderson, Chairman and CEO Discusses Outlook for the Andersons,' Wall Street Transcript Digest, December 15, 1997.
  • 'Consumer Housewares Show Boosts Sales at Ohio Chain,' Discount Store News, March 16, 1987, p. 55.
  • Keith, Natalie, 'The Andersons Celebrates Golden Anniversary,' National Home Center News, August 25, 1997, p. 29.
  • 'A Look Back,' Andersons Herald, company publication, October 1987.
  • Newton-Doyle, Jennifer, 'The Andersons, Inc. Celebrates 50 Years of Growth,' Pet Product News, November 1997, p. 8.
  • Schmucker, Jane, 'Cargill's Andersons to Merge Elevators,' Toledo Blade, March 26, 1998, p. 38.
  • ------, 'For Its Bond Sales, Andersons Goes Solo,' Toledo Blade, July 1, 1997, p. S9.
  • ------, 'The Andersons Quietly Ends First Year as Public Corporation,' Toledo Blade, February 20, 1997, p. 38.

Source: International Directory of Company Histories, Vol. 31. St. James Press, 2000.

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