Tuesday, May 6, 2014

Free Enterprise Engenders Uncompromising Quality

 “My first loaf should have been sent to the Smithsonian Institution as a sample of Stone Age bread, for it was hard as a rock and about one inch high.  So I started over again, and after a few more efforts by trial and error, we achieved what seemed like good bread.”

Margaret Rudkin (1897 - 1967)
Founder of Pepperidge Farm

Moving to a property called Pepperidge Farm in Fairfield CT in 1929, Margaret Rudkin, her husband and three sons began dealing with the Depression.

As difficult as that was, their youngest son's asthma and severe allergies proved just as daunting, if not more.  He was unable to eat most processed foods.  She determined to deal with it.

On the advice of a doctor Margaret began him on a diet of fruits and vegetables, and minimally-processed foods.  However, no matter what she bought, he was unable to eat white bread that did not trigger his allergies.  She decided to bake him all-natural, stone-ground, whole-grain wheat bread.  By doing so most of the vitamins and minerals would remain intact, without processing.

Having no experience in baking bread, the quote above came after her first effort.  But eventually her "good bread" came forth and her son could eat it!  The whole family loved it.

She thought she might try it on a local grocer.  Calling it "Pepperidge Farm Bread," she approached him with a sliced loaf.  At that time bread was selling for 10 cents.  She wanted to charge 25 cents!

He was skeptical only as long as it took him to taste a slice.  He took all her loaves, and by the time she got home there was a phone message asking for more.

She said, "Although I knew nothing of manufacturing, of marketing, of pricing or of making bread in quantities, with that phone call Pepperidge Farm bread was born."

Her husband took it to New York to sell it at specialty shops.  Without a plan Margaret continued to bake bread in her kitchen.  She had to move her now burgeoning operation into the garage.

By 1939 she had sold 500,000 loaves!  Six months later 1 million!  In 1940 she bought a commercial baking plant.  During the lean years of WWII, when the rationing of staples reigned, she refused to produce anything of lesser quality and instead she cut back production.  

But in 1947 she opened a state-of-the-art baking plant in Norwalk, CT.  Still, despite all the machinery, she insisted that all dough be kneaded by hand!  She wanted to maintain that home-made quality of the product.

The rest is history.

True to the common track taken by free enterprise, Margaret's travel and keen eye brought her ideas for product differentiation.  Impressed by cookies she encountered in Belgium she made it possible for her to produce and sell them in the United States.  She made them with the same quality standards as her bread.  And Pepperidge Farm Distinctive Cookies brand was born.  

Seeing the coming wave of the frozen-food industry, she purchased the Black Horse Pastry Company of New Hampshire and began selling frozen pastry.  Among the offerings were Pepperidge Farm Turnovers and Puff Pastry.

Traveling to Switzerland she encountered little goldfish crackers.  Knowing they would be popular in the United States she added Goldfish Crackers to her Pepperidge Farm line up.

She sold the company to another family-owned business, Campbell Soup, in 1961. 

Finally, in 1963, she produced the first best-selling cookbook in the country - The Margaret Rudkin Pepperidge Farm Cookbook.  

Often referring to Pepperidge Farm as a "fairy tale,"  she said, "My explanation for our extraordinary growth is that Pepperidge Farm products are the best of their kind in the world."  And it all began by trying to find something her son could eat!

'Nuff said.  This is perfectly in keeping with the famous Adam Smith quote, "It is not the benevolence of the butcher, or the baker that we expect our dinner, but from their regard to their own interest."

Yes, free enterprise happens out of self interest.  But it also engenders uncompromising quality.


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