Worthington Foods, Inc. History

Address:
900 Proprietors Road
Worthington Ohio 43085
U.S.A.

Telephone: (614) 885-9511
Fax: (614) 885-2594

Public Company
Incorporated: 1939 as Special Foods Inc.
Employees: 461
Sales: $88.2 million (1994)
Stock Exchanges: NASDAQ
SICs: 2075 Soybean Oil Mills; 2099 Food Preparations Not Elsewhere Classified

Company History:

Worthington Foods, Inc., has grown from a tiny manufacturer of specialty foods into a leader of the U.S. markets for vegetarian foods and meat alternatives. The company continued to hold a leading 65 percent share of the meat alternatives market in 1994 despite intense competition from America's largest food conglomerates. By the mid-1990s, Worthington Foods offered four branded lines of healthy foods: Morningstar Farms targeted the mass market, while Worthington, LaLoma, and Natural Touch were geared specifically toward the health food and Seventh-day Adventist markets. The introduction of such new products as Spicy Black Bean Burger, Better 'n Burger, and Ground Meatless in 1995 helped the company expand its presence in the institutional food service and restaurant markets. Worthington Foods' net income declined by over one-third from $2.79 million in 1992, when the company made its initial public stock offering, to $1.79 million in 1993, but rebounded strongly to $4.33 million in 1994.

The business traces its heritage to 1939, when Dr. George T. Harding III founded Special Foods in Worthington, Ohio. Harding adhered to Seventh-day Adventist dietary strictures, which proscribe consumption of pork, ham, shellfish, caffeine, and tobacco, among other foods and beverages. Most followers eschew meat and other animal products altogether. Formally established in 1863, the Seventh-day Adventist Church's concern for bodily health led to the establishment of hospitals, sanitariums, and medical schools (as well as elementary and secondary schools, colleges, and universities) throughout the United States and eventually around the world.

Harding established Special Foods to supply vegetarian foods to his father's nearby sanitarium (health spa). He also hoped that the existence of a reliable supply of vegetarian foods would encourage the development of a mid-Ohio Adventist community. With companies like Michigan's Battle Creek Foods Company, Tennessee's Madison Foods, and California's Loma Linda Foods (owned by the General Conference of Seventh-day Adventists) as models, Harding, his wife Mary Virginia, and four other investors bought and refurbished a fire-damaged house and started production in 1939.

Special Foods' early products were fashioned after "nut meats," first concocted by Dr. John Kellogg, the first Adventist to become a medical doctor. They combined roasted peanuts with gluten (derived from flour) and seasonings to form meatless, yet high-protein main courses like PROAST, a substitute for dark meat, and NUMETE, a substitute for light meat. A 1989 company history acknowledged that Special Foods' early manufacturing practices were "primitive:" a garden hose was a key piece of equipment, for example.

Nevertheless, Special Foods attracted a following. Bill Robinson, one of the company's founding investors and a former salesman for Battle Creek Foods, was its first employee. He coordinated sales to Seventh-day Adventists and health food shops such that by 1941 the company was selling $20,000 worth of vegetarian foods each year. Robinson soon emerged as Special Foods' top manager. He brought in James Hagle to assist with and later assume general managerial duties in 1942.

Hagle came on board just in time to guide the company through the challenging, yet rewarding, World War II era. Government rationing during this period both hindered and helped Special Foods. Tin shortages compelled the use of glass packaging, which was heavier and more expensive to ship than Special Foods' usual metal cans. The suspension of imports from Germany cut off supplies of yeast and other specialty flavorings, but the company managed to procured these ingredients from the Anheuser-Busch Company. Rationing of red meat, however, helped boost demand for Special Foods' growing array of meat substitutes, known in the industry as "meat analogs." The firm's 50th anniversary history noted that even New York's Waldorf Astoria Hotel was serving CHOPLETS, a mock veal cutlet. Hagle encouraged the growing interest with advertisements in health food magazines and through direct mail. The company sometimes sacrificed profits to ship its products across the country in the hopes that wartime consumers would keep buying in peacetime. By the war's end, Special Foods' sales had burgeoned to nearly $300,000 annually, the company had built a new manufacturing and warehousing facility, and its offices were moved to a separate building.

However, when World War II's food rationing ended, Special Foods' customer base evaporated, leaving it with excess employees and equipment. Although the company struggled through the immediate postwar era and suffered its first loss in 1947, it did not scale back operations. Instead, Hagle worked to regain the company's wartime vigor by instituting research and development and boosting marketing efforts. Hagle hired Allan Buller, a former supply sergeant, to serve as assistant manager and brought on Warren Hartman to guide product development efforts. These changes were capped with the 1945 name change to Worthington Foods, Inc. In 1948, founder George Harding was engaged as president of Loma Linda University, a Seventh-day Adventist institution in California. Hagle advanced to Worthington Foods' presidency, and Allan Buller became secretary-treasurer and general manager.

Worthington Foods' first new postwar product was a meatless wiener, a hand-packed, canned hot dog with a plastic casing. Demand for the new main dish, called Veja Links, ran so high that the company had to purchase an automatic linking machine to keep up with orders. Other new offerings included sandwich spread, soy milk, a vegetable gelatin, and sesame oil.

The company also augmented its product line through two major acquisitions. The first came in 1950, when Worthington Foods bought International Nutrition Laboratories. Founded by Dr. Harry Miller, this Ohio company produced soy-based foods, including Miller's Cutlets (renamed Vegetarian Cutlets). News of Dr. John H. Kellogg's death was followed quickly by an offer to sell his 91-year-old Battle Creek Food Company to Worthington Foods late in the decade. The two additions supplemented Worthington Foods' fledgling national sales network and helped push annual revenues over the $1 million mark.

Worthington Foods supported its growing distribution to mainstream supermarkets through the establishment of several warehouses across the United States. The company's facilities were often established near Seventh-day Adventist institutions in order to cater to that core market. By 1967, Worthington Foods boasted storage buildings in Portland, Oregon; San Leandro, California; Orlando, Florida; Beltsville, Maryland; South Lancaster, Massachusetts; and other locations.

Before the end of the decade, Worthington Foods midwifed the birth of an innovation in food technology that provided the company's entree into the mass market. It came from a highly unlikely

Further Reading:

  • Herold, June R., "Worthington Buying Anti-Cholesterol Cereal Line," Business First-Columbus, November 13, 1989, p. 3.
  • "A History of Worthington Foods," Worthington, Ohio: Worthington Foods, Inc., 1989.
  • Phalon, Richard, "Thin in the Wrong Places," Forbes, June 8, 1992, p. 62.
  • Reid, Robert, "Worthington Foods Prospers From Fitness Fads," Business First-Columbus, December 11, 1989, p. 15.
  • Whalen, William J., "Is The End Near? A Look at Seventh-day Adventists," U.S. Catholic, April 1994, p. 14.

Source: International Directory of Company Histories, Vol. 14. St. James Press, 1996.