C.H. Guenther & Son, Inc.

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C.H. Guenther & Son, Inc.

129 East Guenther Street
San Antonio, Texas 78204
U.S.A.
Telephone: (210) 227-1401
Toll Free: (800) 531-7912
Fax: (210) 227-1409
Web site: http://www.chguenther.com

Private Company
Incorporated: 1851 as Guenther Milling Company
Employees: 750
Sales: $144.6 million (2005 est.)
NAIC: 311211 Flour Milling; 311812 Commercial Bakeries; 311822 Flour Mixes and Dough Manufactured from Purchased Flour

C.H. Guenther & Son, Inc., is a San Antonio, Texas-based private food manufacturing company that serves both the retail food and foodservice industries in 28 states, mostly in the Southwest and South. The family-owned company controls four primary retail brands. The Pioneer brand offers a wide assortment of biscuit and baking mixes, gravy mixes, pancake and waffle mixes, chili and taco seasoning mixes, and corn bread and corn muffin mixes. Under the Guenther House brand, the company sells a variety of gourmet mixes—including champagne chicken gravy, jalapeño corn bread, and sweet cream cake mix—as well as coffee, preserves, sauces, syrup and honey, biscuit cutters, and holiday gift sets.

Under the White Lily brand Guenther offers bread, muffin, and pancake mixes; brownie mixes; flour; cornmeal; and grits. Corn tortilla and flour tortilla mixes are sold under the White Wings label. In addition, Guenther picked up a number of brands of similar flour mixes and gravies in the 2006 acquisition of Morrison Milling Company, which also does a good deal of private-label work. Guenther's foodservice division provides customers with value-added baking mixes, gravies, sauces, and frozen products. McDonald's is a major customer, with Guenther providing the McGriddle breakfast sandwich to about three-quarters of the fast-food chain's North American restaurants.

The company also operates The Guenther House, the restored home of the founder, which has been converted into a San Antonio museum, gift shop, and restaurant. Nearby is the company headquarters and a manufacturing facility. In addition, Guenther maintains major plants in Denton and Duncanville, Texas; Knoxville, Tennessee; and Prosperity, South Carolina; and a small frozen food plant in Waco, Texas.

MID-19TH-CENTURY ORIGINS

The man behind the C.H. Guenther name was Carl Hilmar Guenther. Born in Germany in 1826, he became an apprentice millwright and first came to the United States in 1848, finding work in flour milling, farming, and lumbering during his travels from New York to Wisconsin and down the Mississippi River. After returning to Germany briefly, likely to secure financing from his parents, Guenther cast his lot with the young republic in 1851, landing in New Orleans. He then made his way to San Antonio, just 15 years after the siege of the Alamo and the annexation of Texas from Mexico. Guenther soon heard that there was a need for a gristmill and flour mill in Fredericksburg some 75 miles to the northwest, so he moved there and built a flour mill powered by the nearby Live Oak Creek.

Guenther's mill prospered for a few years, leading to the addition of a second waterwheel and a pair of French-made millstones. Then drought befell the area, leading to dwindling crops and little grain to mill. Moreover, the creek receded and could barely turn the waterwheels. To make matters worse, a new steam-powered mill opened in the area. Sensing the time was right to cut his losses, Guenther sold his mill to his father-in-law in 1859 and relocated to San Antonio, where the more powerful San Antonio River offered a more reliable source of water power. In October of that year he opened the first flour mill in the city. He next built a limestone home for his family, which would one day become the company museum, gift shop, and restaurant.

Guenther enjoyed success in San Antonio, and in 1868 he expanded his business by building a second mill farther upstream. To better market the flour that the Guenther mills produced, he adopted the "Guenther's Best" brand name for his highest grade of flour in 1875. Aside from the river, Guenther also would soon benefit from the railroad that came to San Antonio, which allowed him to begin shipping his flour to other markets in Texas and surrounding states.

SONS JOIN THE BUSINESS IN 1878

Two of Guenther's sons, 19-year-old Arthur and 21-year-old Fritz, joined the company in 1878, and the business was reorganized as a partnership under the name of C.H. Guenther & Sons. With the second generation assuming greater responsibility, the company began incorporating the latest equipment and methods to stay ahead of the competition. In the early 1890s, for example, millstones were phased out in favor of the newly developed steel rollers. State-of-the-industry sifting equipment also was acquired and steam power replaced waterwheels. By the end of the century the company's 200-horsepower engine would be the largest in San Antonio.

One of the sons, Arthur, left the company in 1894 to work for his in-laws, who ran a rival concern, Liberty Mills. When Arthur soon took over, he renamed it Guenther Milling Company, which led to some confusion in the marketplace and conflict between the two companies over brand name. Hence, in 1899 C.H. Guenther & Son (renamed a year earlier when after the death of Fritz the business was incorporated under the management of the family's youngest son, 30-year-old Erhard) acquired a dozen trademarks. They included "Texas Pioneer," which included the picture of the founder on its labels to distinguish the products from those of Guenther Milling Company. His picture remained on the packaging a century later. In addition, C.H. Guenther & Sons established the White Wings label, which also would be known as "La Paloma."

In October 1902 Carl Guenther died at the age of 76 and Erhard assumed the presidency. Although the legal name remained unchanged, the company began doing business as Pioneer Flour Mills, building on the recognition of its top brand. The business continued to grow, and to meet increased demand the company replaced its 40-year-old frame building with a six-story steel and concrete plant in 1914. The increased production capacity was needed to supply the emerging military bases in San Antonio, which would grow even larger when the United States entered World War I in 1916. Just as the army was in the process of replacing its mules with trucks, so too did Guenther, which in 1916 dropped mule-drawn wagons for motor vehicles. At the same time, the old wooden flour barrels were replaced by smaller cloth and paper sacks.

The war precipitated a period of strong growth for Guenther in the 1920s, when the company doubled its production capacity. In 1922 a 20-story grain elevator was completed, in essence becoming San Antonio's first skyscraper. Two years later the company opened a new seven-story mill building, and in 1929 six storage tanks were added to the facilities.

Despite the Great Depression, Guenther continued to grow during the 1930s. Especially important during this period was the company's expansion beyond the production of flour to include consumer convenience foods. The first of these, the Breakfast Treat wheat cereal line, was introduced in 1932. To support its regional position, Guenther also opened several warehouses in the 1930s, including those in the Texas communities of Austin, Corpus Christi, Victoria, Brenham, and Wharton.

COMPANY PERSPECTIVES

The heritage and success of C.H. Guenther & Son, Inc., is driven by our commitment to the core values of People, Quality, and Growth.

The growth of the consumer convenience food business picked up in the post-World War II years, with the company under new third-generation leadership. Following the death of Erhard Guenther at the age of 75, his nephew, Adolph Guenther Beckmann, took charge. Another Beckmann, Alfred, would go to work in the company's test kitchen and in 1948 develop Pioneer Biscuit Mix, the first of many value-added products. The biscuit mix proved so successful that in 1950 the company added a new building for prepared mixes. Other value-added products to come out of the test kitchen were cornmeal, pancake, and cake mixes. To promote the Pioneer mixes, Guenther traveled the parade and fair circuit in Texas, with the marketing effort culminating in the 1952 Texas Food Fair in Houston where a 1,500-pound cake was baked using Pioneer cake mix. The 1950s also saw some changes in the top ranks at Guenther. Adolph Beckmann died in 1954 at the age of 66 and his 60-year-old cousin, Ernst Schuchard, replaced him. When Schuchard retired just three years later Alfred Beckmann took charge of the company.

Under Alfred Beckmann's 16-year turn at the helm, the company opened a new warehouse in 1967 large enough to serve the 12 states in which it operated. A major new product offering was the 1972 introduction of White Wings Flour Tortilla Mix, which proved especially popular with consumers. When Beckmann stepped down as president in 1973, his replacement, Robert Schupback, who had been vice-president of sales, drove the company into the foodservice and restaurant channels. He was just in his mid-30s when he took over, but his tenure as president would be cut short in 1982 when he died at the age of 48. His replacement, 36-year-old Chief Financial Officer Michael Wood, would last only five months due to his death in a plane crash. Taking over was the company's chairman, Scott Perry, Jr., who had married into the family. He held the post for two years before looking outside the family to bring in an experienced foodservice executive, resulting in the hiring of Richard DiGregorio as chief executive officer.

The new management team quickly took steps to build on Guenther's success. A new warehouse was added in 1984, as well as research development laboratories, from which new products would soon emerge. The company's Old-Fashioned Country Gravy Mix was introduced in 1985 and quickly became one of Guenther's best-selling products. The company also grew through acquisitions. In 1987 Duncanville, Texas-based Custom Bakers was purchased, adding frozen baked goods and biscuits to the mix and forming the foundation for what would become Pioneer Frozen Foods. A year later the restored Guenther home was opened to the public, and the company had a museum and restaurant to operate.

ACQUIRING WHITE LILY FOODS IN 1995

More product lines, either developed internally or picked up through acquisitions, followed in the 1990s. No-Fat Biscuit and Baking Mix was introduced in 1992. Then, in 1995, the White Lily Foods Company, based in Knoxville, Tennessee, was acquired, adding White Lily flour and other products under the White Lily name. A year later the White Wings flour tortilla mix was introduced. Also in the late 1990s the company began working with McDonald's to develop the McGriddle breakfast sandwich. With several brands in the fold, the company closed the decade by dropping the Pioneer Flour Mills name for its legal name of 100 years, C.H. Guenther & Son.

KEY DATES

1851:: Carl Hilmar Guenther opens a flour mill in Fredericksburg, Texas.
1859:: Guenther is relocated to San Antonio.
1898:: The company is incorporated as C.H. Guenther & Son.
1902:: Carl Guenther dies.
1932:: The first consumer convenience food is introduced.
1948:: Pioneer Biscuit Mix is introduced.
1973:: The company begins selling to foodservice and restaurant markets.
1987:: Texas Custom Bakers is acquired.
1995:: White Lily Foods Company is acquired.
2005:: East Balt Guenther Bakeries is formed.
2006:: Morrison Milling Company is acquired.

The new century began in a way similar to the ending of the last, with the expansion of product lines. Retail taco and chili mixes were added under the Pioneer label in 2000. Pioneer Country Sausage Gravy Mix and White Lily Grits were added three years later. The early part of the 2000s also brought a change in leadership, when after nearly 20 years in charge DiGregorio retired as CEO in 2002. He was replaced by Dale Tremblay, a former Quaker Oats executive who had joined Guenther three years earlier. He took over a company that was growing at a steady clip, especially with the sale of frozen bread and biscuit dough to schools, restaurants, and other foodservice customers. Having essentially run out of room in Duncanville, Guenther needed to add a fourth manufacturing plant. In April 2002 it acquired a former hosiery mill in Prosperity, South Carolina, and by the end of the year reopened the 227,000-square-foot facility to produce frozen and dry mix products, including the McGriddle pancake-and-sausage product it had devoted nearly three years to develop.

Having enjoyed success with frozen foods in the foodservice channel, Guenther in 2004 tried its hand at the retail frozen food market, introducing biscuit and roll dough products in 2004. A year later the frozen biscuit line was expanded with Pioneer and White Lily branded Cinnamon & Icing Biscuits and Country Gravy Biscuits.

Guenther began looking overseas for opportunities in 2005 by acquiring the bakery assets of U.K.-based Golden West Foods, a deal made with a Chicago partner, East Balt Inc., a fellow McDonald's supplier. They picked up bakeries in London and Manchester, England, and a third in Belgium, forming the basis of a joint venture that took the name East Balt Guenther Bakeries. The unit primarily produced buns for McDonald's and English muffins for foodservice customers in England, Scotland, Northern Ireland, Denmark, and Belgium.

Guenther did not neglect its domestic business, however. In 2006 it acquired Denton, Texas-based Morrison Milling Company. Founded in 1886, it was one of the oldest flour and corn milling operations in the state, and one of the few independents left in business. Morrison produced a broad range of flour- and corn-based dry mix and frozen products, mostly sold in North Texas. In addition to the Denton operation, the company operated a small frozen food plant in Waco, Texas. Nonetheless, while Guenther was acquiring Morrison it was putting the White Lily operation up for sale in 2006. The Knoxville operation had produced products for both the retail and foodservice channels, but the bulk of the foodservice work had been transferred to the other Guenther plants, leaving just the retail White Lily flour and Three Rivers cornmeal products to be produced there. As a result, the plant no longer fit into Guenther's long-term plans and was deemed expendable. The company did not, however, set a timetable on when it planned to sell the operation and made it clear that the plant would not be closed should it not be able to find a suitable buyer.

Ed Dinger