GoodMark Foods, Inc.

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GoodMark Foods, Inc.

6131 Falls of Neuse Road
Raleigh, North Carolina 27609
U.S.A.
(919) 790-9940
Fax: (919) 790-6535
Web site: http://www.conagra.com

Wholly Owned Subsidiary of ConAgra, Inc.
Incorporated: 1970
Employees: 1,100
Sales: $178 million (1997 est.)
SICs: 2013 Sausages & Other Prepared Meats; 2096 Potato Chips & Similar Snacks; 2099 Food Preparations, Not Elsewhere Classified

The world’s largest producer of meat snacks, GoodMark Foods, Inc. makes Slim Jim dried meat sticks, Pemmican beef jerky, Penrose pickled sausage, and a line of baked grain snacks under the Andy Capp’s label. GoodMark Foods produces its food products at a plant in Garner, North Carolina, which is supported by operations in California, Pennsylvania, Maryland, and the U.S. Virgin Islands. In 1998, the company was acquired by international food conglomerate ConAgra, Inc.

Origins of Predecessor

A half-century before the GoodMark Foods name first appeared, the company’s signature product and its brand name emerged on the East Coast, introduced by a Philadelphia entrepreneur whose contribution to the world was the meat-stick snack Slim Jim. Adolph Levis made his living selling pickled cabbage, mushrooms, and tomatoes to delicatessens, a job that provided him with first-hand knowledge of which types of prepared foods consumers desired most. During his visits to one delicatessen after another, Levis noticed the sales of bologna and pepperoni rising steadily, an observation that sparked his entrepreneurial impulses and prompted him to ask a local meat company to make a small dried sausage. Once he had his product, Levis designed an emblem for its packaging, one reportedly inspired by his perception of the sausage as “elegant.” He designed a man wearing a tuxedo to serve as the emblem for the product, complete with a top hat and a cane, and named him Slim Jim.

Initially, Levis sold his Slim Jim meat snacks to bars around the Philadelphia area. Later, he began distributing his all-beef snacks to convenience stores, accruing a small fortune from decades of Slim Jim sales. By the late 1960s, Levis was ready to retire. He sold his company, Cherry-Levis Co., which included Slim Jim, to the Minneapolis-based conglomerate General Mills in 1967. A General Mills employee at the time of the sale remembered Levis, recalling, “He made a great deal of money off it and decided to go to Florida and go to the tracks and enjoy life.” Levis’s association with his popular meat stick was over, but the history of Slim Jim was only beginning its second chapter.

At corporate headquarters in Minneapolis, there was one General Mills employee whose career took a pivotal turn the day Slim Jim became part of the massive food company. Ron E. Doggett, a rising executive at General Mills during the late 1960s and part of the executive team that recommended buying Levis’s company, was to become Slim Jim’s guardian for the next three decades. Described as a “soft-spoken son of a Minnesota farmer,” Doggett had enlisted in the Korean War and used his GI Bill to put himself through Mankato State University, where he studied business. While still in school, Doggett made his first attempt as an entrepreneur, using the money he had saved while in the Armed Forces to develop a small shopping center in southern Minnesota. Within two years, the development project flopped, leading Doggett to pursue a less risky career path when his academic days were over. He graduated with a business degree from Mankato State in 1961 and went to work for General Mills as a controller.

1970 Formation of GoodMark Foods

When Levis sold his company to General Mills, Doggett was named vice-president of the new acquisition, which was renamed Slim Jim, Inc. Senior General Mills executives believed Slim Jim had greater market potential than its use as a bar snack, so the company began stocking Slim Jim in vending machines, grocery stores, and supermarkets. In 1970, General Mills acquired a Garner, North Carolina company named Jesse Jones Sausage Co., which was combined with Slim Jim, Inc. to form GoodMark Foods, Inc. The combination of the two companies moved Slim Jim’s headquarters from what was described as a Philadelphia slum to the more pristine surroundings in Raleigh, North Carolina, where Doggett spent the next decade watching over the fortunes of the GoodMark Foods subsidiary.

By the end of the 1970s, GoodMark Foods was producing a variety of food products, everything from beef jerky to Jesse Jones sausage to potato Bugles. Financially, the company was doing well, collecting $50 million in sales a year and demonstrating consistent profitability. Doggett, however, was troubled by what he saw. Under General Mills’ stewardship, the strength of GoodMark Foods’ flagship Slim Jim brand was diminishing. In an effort to squeeze the maximum profits from the product, General Mills had reduced the amount of beef in an individual Slim Jim and used chicken, soy protein, and milk products in its place. Doggett, who served as vice-president of finance for GoodMark Foods by the end of the 1970s, was alarmed, remarking later, “we had lowered quality, increased price—and all the time our volume was going the wrong way.” The situation worsened when General Mills decided at the beginning of the 1980s to pare back its extensive activities and refocus on cereals and baking goods. In October 1981, convinced that they had gleaned all the profits they could out of the company, General Mills put GoodMark Foods on the auction block. Doggett suddenly found himself facing a murky financial future.

In his mid-40s at the time General Mills announced its intended divestiture of GoodMark Foods, Doggett had three children nearing college age and was about to sign a new mortgage. Despite the threatening clouds gathering around him, Doggett went home the day he first heard about the sale and told his wife that he had happened upon “the chance of a lifetime.” The opportunity, as Doggett saw it, was to buy GoodMark Foods from General Mills in a management buyout, but first came the prodigious task of securing the money to make an offer General Mills would accept. For six months, Doggett and three other General Mills vice-presidents struggled to borrow the money to make GoodMark Foods their own. General Mills agreed to $15 million in 1982 after Doggett had put up, according to a May 1997 Business North Carolina article, “my home, my cars, and my wheelbarrow,” as collateral for loans. The completion of the transaction turned the page to the third chapter in the company’s history, an era that saw Slim Jim flourish as it never had before.

1982 Spinoff

Doggett assumed the duties of president and chief operating officer for the newly independent GoodMark Foods, and quickly attempted to cure the ills Slim Jim had suffered under the latter years of General Mills’ governance. First, the quality of the meat snacks was improved, making them more like the Slim Jim snacks Philadelphia bar patrons had enjoyed during the 1930s. The amount of soy and milk products was reduced, as was the amount of sodium nitrate. Having removed much of the “extenders” that made Slim Jim less expensive to produce, Doggett and his associates next turned their attention to rethinking their marketing strategy. General Mills had concentrated on distributing Slim Jim primarily to supermarkets, but the new owners of the brand took a different stance and began distributing Slim Jim to convenience stores. A research and development department was formed as well, enabling the company to introduce four or five new products a year. Propelled by these new changes, sales at GoodMark Foods jumped from $68 million in 1982 to $82 million in 1985. At this point, Doggett and his team sold part of the company in a public offering, the proceeds from which testified to the growing optimism about GoodMark Foods’ profitability and its future prospects. Three years after buying the entire company for $15 million, GoodMark Foods’ owners realized $16 million for 39 percent of the company.

Infused with capital from the public offering, GoodMark Foods gained the financial resources to redouble its marketing efforts and increase its advertising budget. At first, the company missed the mark with its advertisements, projecting a wholesome family image and describing Slim Jim with the slogan, “Less Than a Meal and More Than a Snack.” The multimillion-dollar advertising campaign launched in 1986 started paying big dividends when the company discovered its best customers were not families gathered around a kitchen table but teenage boys, who devoured six or seven Slim Jims at a time. The identification of its target customer was an important realization, one that would underpin the company’s highly visible advertising efforts during the 1990s and add muscle to its dominant market position.

Cut free from the bureaucratic layers of management at General Mills, GoodMark Foods took on a new, vibrant luster during the 1980s, as the advantages of its independence continued to expose capabilities that were suppressed under the auspices of a giant parent company. The company possessed far greater ability to respond to changes in its market, giving it the agility to seize opportunities shortly after they were identified. When spicy food emerged as a trend in 1988, GoodMark Foods signed a licensing agreement with Louisiana’s McIlhenny Co., maker of Tabasco sauce, to produce Tabasco-flavored Slim Jims. This flexibility extended to other products as well and spawned entirely new product lines, such as the company’s foray into pork rinds. When Doggett learned that George Bush’s favorite snack was pork rinds, he quickly located a producer of pork rinds, and then introduced Tabasco-flavored pork rinds two weeks before the 1988 Republican convention, emblazoning each bag with the slogan “They’re Republickin’ Good.” GoodMark Foods exhausted its supply of 20,000 packages before the convention ended, and achieved an unexpected publicity coup when NBC’s Tom Brokaw held up a bag of the pork rinds on national television.

Flush with success, Doggett sat atop a thriving enterprise by the end of the 1980s. The company controlled 44 percent of the meat snack market, which was a greater percentage than the next six competitors combined, and it had begun to broaden its product line, branching out into the cookie market through the 1988 acquisition of $8.5 million-in-sales Fleetwood Snacks. The focus on the company’s other brands intensified during the early 1990s, although considerable attention continued to be paid to the mainstay Slim Jim brand, which was primarily responsible for GoodMark Foods’ stalwart market share. During the early 1990s, Doggett increased the U.S. distribution of several brands, including Pemmican beef jerky, Jesse Jones sausage, and Penrose pickled pigs’ feet. As the company sought to broaden its reach at home, it was also taking a greater interest in its international business, which generated slightly more than $5 million in sales in 1992 through the distribution of food products in Japan, Singapore, Hong Kong, and Taiwan. By 1993, GoodMark Foods was taking its first steps into China, Korea, and Canada and was beginning to research markets in Mexico and Europe. By continuing to branch out overseas, Doggett was hoping to collect between $10 million and $20 million in sales from foreign business by the mid-1990s.

High-Profile 1990s

As the company pushed overseas and promoted its other brands during the 1990s, its advertising efforts directed at the promotion of the Slim Jim brand took center stage. GoodMark Foods had made a tremendous leap from the “elegant” product Levis’ had hawked and from the wholesome family image it briefly had tried to project. Once the company identified teenage boys as its target audience, it shaped its advertising around these customers. The brand assumed a rebellious, zany image, using professional wrestlers as the spokespeople for Slim Jims in advertisements that attacked authority figures and institutions teenage boys presumably disliked. The first such pitchman was the “Ultimate Warrior,” replaced in 1992 by the bellicose “Randy ‘Macho Man’ Savage.” The company spent roughly $10 million on advertising and marketing during the early 1990s to fund its boisterous and garish campaign and recorded successive annual sales gains of 20 percent as a result. By the mid-1990s, the company had doubled its advertising and marketing budget, widening its lead over other meat-snack producers who rarely, if ever, advertised. Along with sponsoring a car in Busch Grand National stock-car racing, the company’s promotional efforts included signing on as a sponsor of ESPN and ESPN2’s Summer X Games 1997, an event that embodied the image GoodMark Foods wanted to project.

By the mid-1990s, the Slim Jim brand was thoroughly revitalized, thriving after nearly 15 years under the beneficent control of Doggett. Accounting for half of GoodMark Foods’ total sales, the meat snack was registering robust growth, with the only blemish occurring in 1996 when production failed to meet demand. Sales by 1996 had swelled to $178 million, nearly three times the total recorded when the company was spun off from General Mills. Internationally, the company had failed to reach its sales goal announced early in the decade, but it had begun to test market Slim Jims in British pubs. Doggett stuck to his goal of generating between $10 and $20 million from overseas business, something he hoped to achieve by the end of the decade, but as the company entered the late 1990s a momentous event diverted attention away from foreign shores and toward headquarters in Raleigh. A new era was set to begin, one that was similar in nature to the period preceding GoodMark Foods’ independence.

In a deal valued at $216 million, GoodMark Foods announced it was being acquired by $24-billion-in-sales ConAgra, Inc., a diversified, global food company. The merger was completed in 1998, returning GoodMark Foods to the familiar role of operating under a much larger corporate umbrella. Slim Jim became one of 22 ConAgra brands with annual retail sales exceeding $100 million, but Doggett, at least publicly, did not seem to fear Slim Jim would suffer from the wide-ranging interests of a corporate parent. “I believe ConAgra offers GoodMark the best of both worlds,” he said in an official announcement, “an entrepreneurial culture where our company can continue to thrive and grow, and the resources to support and enhance GoodMark’s continued growth. In other words,” he added, “we’ve found a good home for our people and GoodMark’s future.” Whether or not history would repeat itself and drain the Slim Jim brand of its strength, was a question to be answered in the 21st century.