The old Nalley's facility Credit: Gexydaf
The news, earlier this month, that Hillshire Farms would buy Pinnacle Foods for $6.6 billion has local ramifications: One of the brands in the Pinnacle portfolio is Nalley's, which had a run of almost a century as a major employer in Tacoma. Now, there's news Tuesday that a poultry producer out of Chicago, Pilgrim's Pride, wouldn't mind taking over Hillshire.
Who does what to whom, and for what price, will play out over the next few days. But the corporate dance obscures the very real fact that regional food brands like Nalley's have been disappearing, swallowed up (as it were) by larger companies that keep the packaging but throw away the filling — the local plants, like the one that used to be in Tacoma, and the history that on which they were built.
Back in 1903, a 13-year-old Croatian immigrant named Marcus Narancic arrived in New York with 15 cents in his pocket. He couldn't speak a word of English. He took several jobs: in a steel mill, as a meat packer, and finally in a hotel kitchen where he moved from kitchen flunky to pantry boy to fry cook. He signed on as a cook on the Milwaukee Railroad's train from Chicago to Tacoma; he later worked at the Bonneville Hotel in Tacoma.
The culinary rage at the time, on the East Coast at least, were thinly sliced, deep-fried “Sararatoga Chips,” which young Marcus learned how to make, using the potatoes out his back door in the Puyallup Valley. By the 1920s, a manufacturer named Herman Lay would start calling his version of the Saratoga concoctions “potato chips.” Lay would automate the manufacturing process and started selling his chips nationally. But before that, in 1918, Marcus Narancic simply rented a storeroom behind his apartment for $5 a month and would sell his chips from a basket, door-to-door, to households and grocery stores.
Marcus soon began adding other food products: pickles (from cucumbers grown in the Puyallup Valley), then beans for chili, then salad dressings, and so on. He changed his own name from Narancic to Nalley. His company built a factory in the canyon off State Route 16, and the factory grew and grew until it became one of Tacoma's largest employers.
The company’s website tells of Nalley’s continued growth after Marcus Nalley’s death in 1962: In later years, new plants opened up in Tigard, Oregon and Billings, Montana. Nalley's was becoming even more of a staple in the Northwestern household. In fact, at the height of its operation, the company was operating more than 10 potato chip facilities within the United States. Today there are over 1,300 food products under the Nalley label ranging from pickles to canned foods to salad dressing and peanut butter. With canned chili as its biggest seller, the Nalley label continues to be synonymous with delicious, high quality food products.
What the website doesn't say, of course, is that Nalley's itself is no more. But that is what happens when your jar of pickles, your bag of chips, or your can of chili loses its independence.
You can't really blame anyone. It's not as if Marcus Nalley or the company intended to betray the trust people put in him or his family. Nalley's was once an icon of local food, and then? Then it wasn't. It ceased to be.
Long before it closed the plant in South Tacoma, long before the pickles started coming from India, long before its slow, sad decline as a regional brand, Nalley's was one of those firms that became infected with the cancer of ambition, a cancer that required transfusions of money from banks and investors. It wasn't failure that infected the company; on the contrary, it was success. The Nalley's that survives today, in an obscure corner of a giant holding company, didn't lose its way because it was trying to survive hard times. Rather, it sold its soul because it was lured toward the dazzling light of “more.”
The reality is that companies grow and then are often sold to large corporations. The new corporate owners move the facilities to the intersection of cheaper labor and even cheaper ingredients. From their polished mahogany boardrooms they claim to achieve synergies of cost-effective sourcing, efficient production and improved distribution, then they take advantage of their bright new bottom line by selling the company to a private equity firm.
In the case of Nalley's, the ownership passed from Marcus and his family to a company called Agrilink, which was acquired soon thereafter by Dean Foods. The Tacoma facility was abandoned when Dean was bought out by Pinnacle Foods, based in New Jersey. The corporate concept was to preserve America's iconic food brands, but the result was to bury them.
Is this too harsh a judgment? Let's just look at some of the brands under the Pinnacle Foods umbrella: In addition to Nalley's, there's Duncan Hines, Log Cabin, Birds Eye, Vlasic, Mrs. Butterworh and Aunt Jemima, Hungryman, Van de Kamp, Armour, Tim's Cascade Chips. Some are still on grocery shelves, but they're hardly the leaders in their categories.
Grocery wars are fought in the trenches: inch-by-inch combat for shelf space in America's supermarket. There may be dozens upon dozens of brands, but fewer than ten major players: Kraft, Proctor & Gamble, Nestle.General Mills, Unilever, Coca Cola, Mars, Kellogg. Pinnacle Foods is not on the short list, by the way. So it's not surprising that its own corporate parent, the private equity firm Blackstone Group, divested itself of Pinnacle earlier this month. Blackstone, worth 100 billion dollars, give or take, is heavily invested in technology and life sciences; food isn't really a good fit.
The Nalley's name survives, but it's a dimming memory. The damage is irrevocable. What we need to keep in mind is that the same fate awaits others, be they brands of beer or coffee, airplanes or bookstores. Do you really think that there will still be 21,000 Starbucks stores in the year 2100?
And should you think that Nalley's is a unique, one-off tale, consider the many familiar brands that have disappeared. Bakeries are particularly hard-hit, since they begin as family affairs and require a level of dedication that rarely survives a second generation: Brenner Brothers, Gai's, Langendorf. The spiritual successor to Nalley's, Tim's Cascade Snacks, has been a part of Pinnacle Foods for many years.
No telling, yet, whether the new owners of Pinnacle will even make a pretense of keeping Nalley's alive.
Photo credit: Former Nalley's plant by Gexydaf/Flickr