Cargill, Incorporated

views updated May 29 2018

Cargill, Incorporated

Post Office Box 9300
Minneapolis, Minnesota 55440-9300
U.S.A.
Telephone: (952) 742-7575
Fax: (952) 742-7393
Web site: http://www.cargill.com

Private Company
Incorporated: 1936
Employees: 153,000
Sales: $75.2 billion (2006)
NAIC: 112112 Cattle Feedlots; 112310 Chicken Egg Production; 112330 Turkey Production; 115210 Support Activities for Animal Production; 212392 Phosphate Rock Mining; 311119 Other Animal Food Manufacturing; 311211 Flour Milling; 311212 Rice Milling; 311213 Malt Manufacturing; 311221 Wet Corn Milling; 311222 Soybean Processing; 311223 Other Oilseed Processing; 311225 Fats and Oils Refining and Blending; 311311 Sugarcane Mills; 311312 Cane Sugar Refining; Beet Sugar Refining; 311320 Chocolate and Confectionery Manufacturing from Cacao Beans; 311330 Confectionery Manufacturing from Purchased Chocolate; 311611 Animal (Except Poultry) Slaughtering; 311612 Meat Processed from Carcasses; 311615 Poultry Processing; 311942 Spice and Extract Manufacturing; 325193 Ethyl Alcohol Manufacturing; 325310 Fertilizer Manufacturing; 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing; 331111 Iron and Steel Mills; 422510 Grain and Field Bean Wholesalers; 422590 Other Farm Product Raw Material Wholesalers; 422910 Farm Supplies Wholesalers; 483111 Deep Sea Freight Transportation; 522293 International Trade Financing; 523130 Commodity Contracts Dealing; 523140 Commodity Contracts Brokerage

GRAIN TRADING ROOTS

DIVERSIFYING

SUFFERING FROM SLOWER GROWTH

REORGANIZING

ECONOMIC VOLATILITY AND MAJOR TRANSACTIONS

NEW GOAL: AIMING FOR GLOBAL LEADERSHIP IN NOURISHING PEOPLE

PRINCIPAL SUBSIDIARIES

PRINCIPAL DIVISIONS

PRINCIPAL COMPETITORS

GRAIN TRADING ROOTS

William Wallace Cargill began his career in the grain business in 1865 in Conover, Iowa. The business grew as it followed the expansion of the railroad into northern Iowa after the Civil War. In 1875 William Cargill moved the headquarters of his company to La Crosse, Wisconsin. He formed several different partnerships with his brothers, Samuel and James. With Samuel he formed W.W. Cargill and Brother in 1867, which became the W.W. Cargill Company in 1892. James Cargill operated in the Red River Valley in North Dakota and Minnesota with a partner, John D. McMillan. In 1882 the partners sold their Red River Valley grain elevators to William Cargill in order to raise more capital. Then in 1888, James, William, and Sam Cargill formed Cargill Brothers. In 1890 this firm became the Cargill Elevator Company, headquartered in Minneapolis, Minnesota.

In 1895 William W. Cargill’s daughter married John Hugh MacMillan, and later his son William S. Cargill also married a MacMillan. When the elder Cargill died in 1909, leaving the firm burdened with a heavy debt load, John Hugh MacMillan forced out William S. Cargill and took control of the company. An ensuing feud simmered for decades, but control of the company now rests firmly in the hands of the MacMillan family, although some Cargills still hold stock (along with a number of employees).

MacMillan ran the company until 1936, leading it through a difficult period after the struggle for power. Within six years of taking control, he succeeded in stabilizing Cargill’s financial structure. MacMillan was a cautious manager who established the rule that the company would not speculate in commodities, a careful policy that helped establish the company’s reputation in banking circles—an important consideration because the large deals that became Cargill’s mainstay required huge lines of credit.

After World War I, MacMillan took two steps that helped lay the foundation for the future growth of the company. Since its beginnings in 1865, Cargill had been based entirely in the Midwest, selling to eastern brokers. When brokers from Albany, New York, began to open offices in the Midwest, bypassing Cargill as a middleman, Cargill opened an office in New York in 1922. In 1929 Cargill opened a permanent office in Argentina to secure immediate information on Latin American wheat prices. In 1936 the Cargill Elevator Company merged with other Cargill firms to become Cargill, Incorporated.

John MacMillan, Jr., became president of Cargill in 1936. While maintaining many of his father’s cautious policies, he also brought an imaginative and visionary quality to the company. During the Great Depression, Cargill invested heavily in the storage and transportation of grain, secure in the knowledge that a recovering economy would find Cargill prepared to reap maximum benefit. He also left his mark on grain transportation. Unsatisfied with the standard barge design, he and some associates designed a new type of articulated barge and submitted the design to shipyards. When no company would build the barges, Cargill established its own unit to construct them. Soon Cargill built barges at half the typical cost and with twice the capacity of standard barges.

COMPANY PERSPECTIVES

As a trader in 1865, Cargill modeled its business practices under the phrase “our word is our bond.” As a global business entering the 21st century, Cargill reaffirmed this promise in 1995 to customers and employees by formally adopting its set of Guiding Principles, an ethical standard by which Cargill has conducted business throughout the world. Cargill intends to be the global leader in nourishing people, and its employees will do it by being trustworthy, creative and enterprising—as they have done for over 135 years.

At the same time, the aggressive nature of MacMillan’s management style also created problems for the company, most notably in the September Corn Case of 1937. The 1936 corn crop had been poor, and the 1937 crop would not be available until October. The Chicago Board of Trade and the U.S. Commodity Exchange Authority accused Cargill of trying to corner the corn market. After Cargill refused a Board of Trade order to sell some of its corn, the board suspended Cargill Grain Company, the subsidiary that conducted trading, from membership. When the board eventually lifted its suspension, Cargill refused to rejoin. For decades, Cargill carried on its trading through independent traders and proclaimed its satisfaction with the greater security this method afforded. Nevertheless, it did rejoin in 1962.

KEY DATES

1865:: William Wallace Cargill enters the grain business in Conover, Iowa.
1875:: Cargill relocates his business to La Crosse, Wisconsin.
1888:: William, James, and Sam Cargill form Cargill Brothers.
1890:: Cargill Brothers becomes Cargill Elevator Company, headquartered in Minneapolis.
1909:: John Hugh MacMillan, son-in-law of William Cargill, takes control of the company.
1922:: Cargill opens an office in New York City.
1936:: Cargill Elevator and other Cargill firms are merged to form Cargill, Incorporated.
1943:: Company enters the soybean processing business.
1945:: Nutrena Feeds is acquired, doubling the company’s capacity in poultry and animal feeds.
1953:: Tradax, a Swiss subsidiary, is formed to sell grain in Europe.
1954:: Company begins backhauling salt up the Mississippi River.
1967:: Company expands into wet corn milling through purchase of a mill in Cedar Rapids, Iowa.
1972:: Cargill enters the flour milling business.
1974:: Company purchases Ralston Purina’s turkey processing and marketing division and Ca-prock Industries, a cattle feedlot operator.
1975:: Hohenberg Bros. Company, a cotton merchandiser, is acquired.
1979:: Cargill acquires MBPXL Corporation, a beef processor.
1981:: U.K.-based Ralli Bros. and Coney, a major international commodity trader, is acquired.
1982:: MBPXL changes its name to Excel Corporation.
1990:: Major reorganization of North American operations is undertaken.
1992:: Implementation of employee stock ownership plan enables some family members to cash in their ownership shares.
1997:: The North American salt business of Akzo Nobel NV is acquired.
1999:: Cargill acquires the worldwide grain storage, transportation, export, and trading operations of Continental Grain Company.
2001:: Company acquires Agribrands International, a major animal feed maker.
2002:: In its largest acquisition yet, Cargill acquires Paris-based corn miller and starch manufacturer Cerestar S.A. for $1.1 billion; Cargill’s revenues surpass $50 billion.
2004:: Company merges its fertilizer business, Cargill Crop Nutrition, into IMC Global, Inc., which is renamed the Mosaic Company; Cargill gains a 65 percent stake in the publicly traded Mosaic.
2006:: The food ingredients unit of Degussa AG is acquired.

DIVERSIFYING

By 1940, 60 percent of Cargill’s business involved foreign markets, and World War II had a crippling effect on business. While Cargill did build ships for the U.S. Navy, this enterprise could not replace its lost international business, so the company began a major diversification program, entering into vegetable oil and animal feed. The two activities are closely related: pressing oil leaves high-protein meal, which is then used in animal feed. In 1943 Cargill entered the soybean processing business through the purchase of plants in Cedar Rapids and Fort Dodge, Iowa, and Springfield, Illinois. In 1945 Cargill purchased Nutrena Feeds, an animal-feed producer, thereby doubling its capacity in poultry and animal feeds. Corn and soybean processing were two of the most rapidly expanding agricultural areas in the 20 years after World War II, however, and oil processing soon outstripped the value of animal feeds. By 1949, Cargill had made a major entry into soybean processing, and its researchers were exploring the value of safflower and sunflower oil.

John MacMillan, Jr., and his brother Cargill MacMillan were determined to expand the company after the war, but in a cautious manner that minimized risk. Cargill took the lead among the major grain companies in efforts to combine a network of inland grain elevators with the ability to export large quantities of grain. Two developments in the 1950s helped to establish Cargill in world trade. In 1953 Cargill opened a Swiss subsidiary, Tradax, to sell grain in Europe. Eventually, Tradax grew into one of the largest grain companies in the world. In 1960 Cargill opened a 13-million-bushel grain elevator in Baie Comeau, Quebec. This facility allowed Cargill to store grain for shipment during the months that winter weather closed the Great Lakes to traffic. The grain elevator also cut the cost of midwestern grain bound for Europe by 15 cents a bushel. In order to maximize profit, the barges that took grain to Baie Comeau hauled back iron ore. Similarly, in 1954 barges that carried grain to New Orleans began to backhaul salt up the Mississippi. Both practices would lead to profitable new enterprises for Cargill. Before the end of the decade, Cargill’s sales topped the $1 billion mark.

Cargill became involved in grain sales to communist countries at an early date. In the early 1960s, Cargill began to sell grain to Hungary and the Soviet Union, while its Canadian subsidiary also played a significant role in trade with the Soviets. After a lapse in trade of several years during the late 1960s, Soviet leader Leonid Brezhnev resumed grain deals as part of his effort to improve the Soviet standard of living. At the same time, the United States, anxious to improve relations with the Soviet Union, eased trade restrictions. These developments set the stage for the famous grain purchase of 1972. The U.S.S.R. purchased 20 million tons of wheat, roughly one-fourth of the American harvest, of which Cargill sold one million tons.

While Cargill actually lost money on the sale, the ensuing change in the market was more important. The massive sale of wheat, combined with a worldwide drought, drove up agricultural prices and increased Cargill’s profits in all areas of operations. Sales increased from $2.2 billion in 1971 to $28.5 billion in 1981. Together with Cargill’s success in high-fructose corn syrup (it had entered the wet corn milling market in 1967 through the purchase of a mill in Cedar Rapids, Iowa) and animal feed, this boom financed a significant expansion: during that decade Cargill purchased 137 grain elevators; companies in the coal, steel (North Star Steel Company, bought in 1974), and cattle feedlot (Caprock Industries Inc., in 1974) industries; and Ralston Purina’s turkey processing and marketing division (1974). The company also entered the flour milling industry through the purchase of Burrus Mills, which was based in Saginaw, Texas, in 1972; and began merchandising cotton in 1975 with the acquisition of Memphis, Tennessee-based Hohenberg Bros. Company. In 1979 beef processing was added to Cargill’s growing array of operations with the purchase of MBPXL Corporation of Wichita, Kansas, which was renamed Excel Corporation in 1982. Also in 1979 came the purchase of the Laurent malt plant in France, which initiated Cargill’s involvement in the malting business. Finally, in 1981, Cargill beefed up its trading operations with the acquisition of Ralli Bros. and Coney, a U.K.-based international trader of cotton, rubber, wool, and fiber.

SUFFERING FROM SLOWER GROWTH

The 1980s brought economic problems that slowed Cargill’s growth. A 1980 U.S. government embargo on grain sales to the Soviet Union left Cargill long on grain. While the government provided support for companies that were damaged by the embargo, a rise in the value of the dollar and a debt crisis in developing countries further burdened American agriculture firms. Cargill continued to search for opportunities in the depressed business cycle. Typical of its approach was the purchase of Ralston Purina’s soybean-crushing plants in 1985. Overcapacity in the soybean industry did not dissuade Cargill. Whitney MacMillan pointed out that when a business is not doing well there is more room for improvement, and Cargill remained confident that investment during hard times would reap major rewards during the next rise in the business cycle.

Despite periodic downturns, Cargill had exhibited an impressive compound annual growth rate of 15.8 percent sustained over a 25-year period, based on net worth (from $95 million in 1966 to $3.7 billion in 1991). Part of this success was credited to its consistently strong management. Early in the 1930s, Cargill began one of the first management-trainee programs in the country. Cargill did not rely on business-school graduates but took trainees from a wide range of backgrounds and introduced them to the company’s system. Cargill placed young executives in responsible positions quickly and groomed those who succeeded. This system proved its worth in 1960 when John MacMillan, Jr., died. For 16 years nonfamily employees ran the company under the leadership of Erwin Kelm. When Kelm retired in 1976, Whitney MacMillan, great-grandson of founder W. W. Cargill, became chairman. Most upper-level administrators at the company were graduates of Cargill’s training program, and these officers, like family members, took the long view in planning for the welfare of the company.

As Cargill increasingly depended upon nonfamily members for leadership, the company faced several challenges starting in the mid-1980s that would force it to undergo its most dramatic transformation to date. From the mid-1980s through the early 1990s, Cargill consistently failed to meet its companywide sales targets primarily because of continued difficulties in grain merchandising, a sector that had never recovered from the 1980 embargo. Cargill’s successes had also led to a bloated operation in which ConAgra, Inc., its biggest customer, had to purchase products from 18 different Cargill divisions. Chairman Whitney MacMillan and most of the other senior leaders were nearing retirement age with no clear successor from the younger ranks in sight. Finally, some of the family members were lobbying for the opportunity to cash in on Cargill’s success through more than the relatively modest annual dividends they received from their stock.

REORGANIZING

With the help of consultants McKinsey & Company, MacMillan initiated a major reorganization of Cargill’s North American operations in 1990. The previous organization along product lines was replaced with a “soft matrix” type of structure, which intermixed product line and geographical area management. In order to bring fresh ideas into the organization, Cargill’s board of directors was overhauled to include five members from management, five family shareholders, and five outside directors (the first outsiders in 40 years). The structure was also intended to allow the board to mediate between family members and Cargill management.

Such mediation would become more and more critical because Cargill faced the prospect of its first nonfamily CEO since the Erwin Kelm era covering 1960 to 1976. Only two fifth-generation family members worked for the firm, and neither had enough experience to take over when MacMillan retired. Eventually MacMillan selected Ernest S. Micek, former president of Cargill’s food sector, as his successor. Micek was named president and chief operating officer in 1994 before taking over as CEO and chairman in August 1995. Still, at age 59, Micek was anticipating a short tenure (especially by Cargill standards), because company rules mandated retirement at age 65. MacMillan had retired after more than 44 years at the company.

Meanwhile, and amid false rumors that Cargill would finally go public, the issue of company ownership was at least temporarily settled through the implementation of an employee stock ownership plan in 1992. Family members were given the opportunity to cash in as much as 30 percent of their ownership stake in Cargill. It turned out that only 17 percent was sold, for a total of $730 million, funded through borrowing. About 20,000 Cargill employees in the United States were eligible to receive the resulting stock, ending a long history of ownership exclusively by Cargills and MacMillans.

To reduce Cargill’s dependence on the perpetually fickle grain business, the company committed to a program of radical diversification. One aspect of this program was to no longer simply be a commodity merchandiser, but to process the commodities as well, what many called “moving up the food chain.” Already an established meatpacker in the United States through its Excel subsidiary, Cargill opened a new plant in Alberta, Canada, in 1989 in the midst of a downturn in meat sales and became the top meatpacker in Canada by 1992. The company also began producing brand-name products for sale to consumers, such as its Sun Valley Poultry chickens and turkeys in England and its Honeysuckle White and Riverside turkeys in the United States. Through these efforts, Cargill was attempting to gain ground on competitors such as ConAgra, which had moved heavily into branded products throughout the 1980s. By 1993 Cargill was the third largest U.S. food company, behind only Philip Morris and ConAgra, and its annual food sales had reached as high as $22 billion.

A second area of diversification was the development of Cargill’s Financial Markets Division. Based on knowledge gained through decades of trading in the world markets, this operation supported the efforts of the parent company and its subsidiaries through a full spectrum of financial services. Started in the mid-1980s and expanded rapidly in the early 1990s, the division generated almost $100 million in earnings for the 1992–93 fiscal year out of the company total of $358 million.

By the mid-1990s, Cargill had surprised many observers by its diversity in both operations and the locations of those operations. In addition to being the top grain company in the world and the number three food company in the United States, the company also boasted the eighth largest U.S. steel producer in its North Star Steel subsidiary, the top position in European cocoa processing, and the number one ranking among pet food processors in Argentina. For the fiscal year ending in May 1995, Cargill reported that its revenues exceeded the $50 billion mark for the first time, totaling about $51 billion, with net income standing at $671 million.

Early in the next fiscal year, Cargill exited from the U.S. chicken processing market when it sold five plants in Georgia and Florida to Tyson Foods, Inc. The deal also involved the transfer of ownership of a pork processing facility in Marshall, Missouri, from Tyson to Excel, bolstering that subsidiary’s position among the top five U.S. pork producers. Cargill retained its non U.S. chicken operations as well as its turkey business. For 1996, Cargill reported record net income of $902 million on record sales of $55.98 billion. In 1997 the company became one of the largest producers and marketers of salt in the world with the purchase of the North American salt business of Akzo Nobel N.V., an operation with annual revenues of about $450 million.

ECONOMIC VOLATILITY AND MAJOR TRANSACTIONS

The economic turmoil that erupted in mid-1997 in Asia and then spread to Latin America and Russia sent global commodity markets into a deep slump, depressing both sales and earnings at Cargill. The company’s financial services arm also suffered setbacks as it was involved in trading Russian financial instruments when that country’s economy turned sour in the summer of 1998; the unit also lost millions through bad loans to buyers of mobile homes. Cargill earned only $468 million on revenues of $51.42 billion in fiscal 1998 and $597 million on $45.7 billion in sales the following year.

In the midst of these travails, in early 1998, Warren R. Staley was promoted from executive vice-president to president and COO. Staley became president and CEO in April 1999, then was named chairman as well in August 2000, following the retirement of Micek. This period was noteworthy for a number of major deals that Cargill was involved in. In early 1998 Cargill and Monsanto Company formed a biotechnology joint venture whereby Cargill would contract with farmers to grow crops containing Monsanto genes and would then process the resulting harvests into food and livestock feed ingredients. Then in October 1998 Cargill sold its foreign seed operations to Monsanto for about $1.4 billion. In September 1998 Cargill agreed to sell its North American seed operations, which controlled about 4 percent of the U.S. corn seed market, to AgrEvo GmbH, a joint venture of Hoechst AG and Schering AG, for $650 million. Soon thereafter, however, Pioneer Hi-Bred International Inc. sued Cargill, Monsanto, and one other firm alleging that they had wrongfully obtained and used genetic material developed by Pioneer. Following an internal investigation, Cargill admitted that an employee had in fact improperly used Pioneer genetic material in his work at Cargill. Almost immediately, AgrEvo pulled out of the Cargill deal. Cargill was also forced to destroy some of its seed lines, which reduced the value of the business it sold to Monsanto, leading Cargill to return more than $200 million to Monsanto. In May 2000 Cargill agreed to pay $100 million to Pioneer to settle the lawsuit. Cargill then sold its North American seed operation in late 2000 to Dow Chemical Company for an undisclosed sum.

Meantime, in November 1998, Cargill agreed to acquire the worldwide grain storage, transportation, export, and trading operations of its chief rival, Continental Grain Company, for an undisclosed sum that industry observers estimated at several hundred million dollars. The deal quickly aroused bitter opposition from farm groups and legislators across the Farm Belt concerned that Cargill would gain too much control of grain exports in a market already suffering from depressed commodity prices. The U.S. Justice Department filed a lawsuit to block the deal. An agreement was reached in July 1999 whereby the government approved the deal contingent upon Cargill divesting nine grain-handling and transport facilities in eight states. This constituted a significant divestiture as it represented about 25 percent of Continental Grain’s business.

In the midst of the Pioneer seed debacle and the contentious purchase of the Continental Grain assets, the normally secretive Cargill launched a surprising corporate image campaign. In January 1999 the company started a three-year, $30 million ad campaign with a Super Bowl television spot and a full-page ad in the Wall Street Journal. The timing of the launch was purely coincidental as it had been planned the previous summer. The ads were aimed at farmers and food manufacturers and highlighted long-term relationships between the company and its customers. According to Micek, the company’s executives hoped to “put more of a human face on Cargill” through the campaign.

In January 2000 Cargill and Dow Chemical announced that a 50-50 joint venture called Cargill Dow Polymers LLC would begin construction of a manufacturing plant in Blair, Nebraska, where a new kind of plastic would be produced, a recyclable plastic fiber made from plants rather than petroleum. In December 2000 Cargill announced that it had reached an agreement to acquire Agribrands International, Inc., for $580 million, a deal that foiled a planned merger between Agribrands and Ralcorp Holdings Inc. Upon completion of the deal in the spring of 2001, Agribrands was folded into Cargill Animal Nutrition, maker of feeds under such brands as Nutrena and Acco Feeds. Cargill gained a much larger international presence through Agribrands’ 70 plants in 17 countries, producing feeds under the brand names Purina, Chow, and Checkerboard. Agribrands had 2000 earnings of $45 million on revenues of $1.2 billion.

NEW GOAL: AIMING FOR GLOBAL LEADERSHIP IN NOURISHING PEOPLE

As these deals unfolded, a transformation at Cargill began to emerge, one centered on moving beyond the trading of commodities to a much greater emphasis on value-added food products and ingredients. Staley and other company executives had become disenchanted with Cargill’s earnings and concluded that the firm had to move up the food chain to increase its involvement in processing operations and also embark on closer collaboration with customers, providing assistance and advice to farmers, food processors, and retailers, as a result shifting more of the company’s resources into higher-margin businesses. By early 2002 Cargill had established a new mission for itself that succinctly summed up the firm’s new vision: becoming the global leader in nourishing people.

In concert with these shifts, Cargill divested a number of noncore businesses outside of the core food and agriculture operations while completing a series of deals that supported the move up the food chain and into higher-margin businesses. In August 2001 the company acquired Emmpak Foods Inc., a Milwaukee-based privately held meatpacker that was subsequently melded with Cargill’s Excel unit. Emmpak, with annual sales of approximately $640 million, specialized in value-added meat products, such as cooked meats, deli meats, and portion-controlled steaks. Cargill became the number two turkey processor in the United States when it acquired Rocco Enterprises Inc., of Harrisonburg, Virginia, also in 2001.

In addition to acquisitions, Cargill turned to joint ventures in pursuit of its new strategies. In January 2002, for instance, the company joined with CHS Cooperatives to form Horizon Milling, LLC, which instantly became the leader in U.S. flour milling, surpassing Archer Daniels Midland Company. Cargill further bolstered its global flour milling business later in 2002 by entering into a venture called Allied Mills with Australian grain handler GrainCorp Limited to acquire the flour milling business of another Australian company, Goodman Fielder Ltd. That same year, the company partnered with Hormel Foods Corporation to create Precept Foods, LLC. This venture combined the powerful meat processing operations of Excel with the strong marketing and distribution skills of Hormel to begin selling prepackaged beef and pork products under Hormel’s Always Tender brand through supermarket chains.

In April 2002 Cargill completed its largest acquisition yet, a $1.1 billion takeover of Cerestar S.A., one of the largest corn millers in Europe. Based in Paris, Cerestar was a leading maker of specialty starches and sweeteners, including high-fructose corn syrup, for food, beverages, pharmaceuticals, paper, detergent, and feedstocks. Revenues for Cerestar, which controlled 27 percent of Europe’s starch market and 5 percent in North America, totaled $1.58 billion in 2000. During fiscal 2002 Cargill’s revenues surpassed the $50 billion mark for the first time. The following year, earnings from operations surged 21 percent, topping $1 billion.

Continuing to seek growth opportunities, Cargill took a new approach for its next major transaction. In October 2004 the company merged its fertilizer business, Cargill Crop Nutrition, into the publicly traded firm IMC Global, Inc., which then changed its name to the Mosaic Company. Cargill gained a stake of about 65 percent in Mosaic, which retained its status as a public company. This marked the first time that a Cargill unit was publicly traded. The creation of Mosaic combined Cargill’s strengths in phosphate and nitrogen with IMC’s strength in phosphate and potash. Mosaic, the world leader in potash and phosphate fertilizers, reported revenues of more than $5.3 billion by fiscal 2006.

In November 2004, as part of its drive to divest noncore assets, Cargill completed its exit from the steelmaking business by selling North Star Steel to Toronto-based Gerdau Ameristeel Corporation for approximately $266 million. Cargill also sold its London-based futures trading unit, Cargill Investor Services, to REFCO Group Ltd. the following year. Early in 2005, Cargill bought out Dow Chemical’s interest in the Cargill Dow joint venture, which was then renamed NatureWorks LLC. By this time, the venture’s corn-based plastic resins were being used in rigid packaging and films, including containers for bakery, deli, and other products, disposable servicewear, and beverage bottles, as well as in fiber-fill applications, such as pillows, comforters, mattress pads, blankets, and apparel. Interest in NatureWorks’ so-called bio-based plastic was growing because soaring crude oil prices were driving up the cost of petroleum-based plastics.

Cargill was also in the process of increasing its involvement in ethanol, yet another nonfood, corn-based product that was attracting increasing attention because of soaring energy prices. Already the nation’s third largest ethanol producer from its plants in Iowa and Nebraska, Cargill in mid-2005 announced the formation of a joint venture with Fagen, Inc., and private-equity partners to build three large ethanol plants in the Midwest, in Indiana, Nebraska, and Ohio. Fagen was a major ethanol plant builder based in Granite Falls, Minnesota. In late 2005 Cargill lost its position as the largest private company in the United States when Koch Industries, Inc., completed its acquisition of Georgia-Pacific Corporation.

Cargill began 2006 with a major acquisition of its own, though one much smaller than Koch’s Georgia-Pacific deal. In April the company purchased the food ingredients unit of the German chemicals company Degussa AG for EUR 540 million ($670 million). This deal substantially increased Cargill’s food ingredients business, particularly in the markets for lecithin, a natural emulsifier used to make chocolate and bakery products; pectin, a natural hydrocolloid used in texturizing and stabilizing a variety of food and beverage products; and flavors. The acquired unit had garnered EUR 441 million in sales in 2004.

For 2006, Cargill enjoyed its fifth consecutive year of record earnings. Excluding special items, earnings rose 13 percent, to $1.73 billion. Revenues rose 6 percent, reaching $75.2 billion. In June 2007 Staley retired after a remarkable eight years at the helm marked by a greater openness, several major acquisitions, and a concerted shift well beyond the company’s grain trading roots. Earnings tripled during his tenure showing the success of Staley’s push into higher-margin businesses as well as his divestment of noncore operations. Gregory Page succeeded Staley as CEO. During his 33 years at Cargill, Page had at one time headed the firm’s beef and pork operations before being named president and COO in 2000. Initially at least, Page did not anticipate leading the kind of strategic shift that Staley had overseen and appeared set to continue the expansion that his predecessor had begun.

Joseph Bator
Updated, David E. Salamie

PRINCIPAL SUBSIDIARIES

Black River Asset Management LLC; LaCrosse Global Fund Services; The Mosaic Company (65%); Nature-Works LLC; Sunny Fresh Foods; Cargill S.A.C.I. (Argentina); BlueScope Steel Limited (Australia); Cargill Australia Limited; N.V. Cargill (Belgium); Cargill de Bolivia; Cargill Agrícola S.A. (Brazil); Cargill Limited (Canada); Cargill Chile, Ltda.; Cargill Inversiones Ltda. (Colombia); Cinta Azul (Costa Rica); Cargill West Africa S.A. (Côte d’Ivoire); Cargill Nordic A/S (Denmark); Cargill Caribe S.A. (Dominican Republic); Cargill Limited (Egypt); Cargill Nordic Oy (Finland); Cargill France; Cargill GmbH (Germany); Cargill Ghana Limited; Cargill Central America (Guatemala); Grupo Alcon (Honduras); Sun Valley Central America (Honduras); Cargill India Pvt. Ltd.; PT Cargill Indonesia; Cargill Integra Ltd. (Ireland); Cargill S.r.l. (Italy); Cargill Japan Ltd.; Cargill Kenya Limited; Cargill Malawi Ltd.; Cargill Malaysia SDN BHD; Cargill de Mexico, S.A. de C.V.; Cargill Morocco S.A.; Cargill B.V. (Netherlands); Cargill Ventures Ltd. (Nigeria); Cargill Pakistan Holdings (Pvt) Ltd.; Cargill Paraguay; Cargill Americas Peru S.R.I.; Cargill Philippines, Inc.; Cargill (Polska) Sp. z o.o., ul. (Poland); Cargill Portugal SA; Cargill Oils S.A. (Romania); Cargill Siloz (Romania); Cargill Cereale (Romania); Cargill Enterprises Inc. (Russia); Cargill Asia Pacific Holdings Pte Limited (Singapore); Cargill RSA (Pty) Limited (South Africa); Cargill España SA (Spain); Cargill Nordic A/S (Sweden); Cargill International S.A. (Switzerland); Provimi Kliba AG (Switzerland); Blatt-mann Schweiz AG (Switzerland); Cargill Taiwan Corporation; M.A.Cargill Trading Ltd. (Taiwan); Cargill Tanzania Limited; Cargill Siam Ltd. (Thailand); Cargill Tarim ve Gida Sanayi Ticaret A.S;. (Turkey); Cargill Middle East (United Arab Emirates); Cargill Europe Limited (U.K.); Cargill SACI Sucursal Uruguay; Cargill De Venezuela, S.R.L.; Cargill Asia Pacific Limited (Vietnam); Cargill Cotton Ginners Ltd. (Zambia); Cargill Zimbabwe (Pvt) Limited.

PRINCIPAL DIVISIONS

AGRICULTURE SERVICES: Cargill AgHorizons; Cargill Animal Nutrition. FOOD INGREDIENTS AND APPLICATIONS: Cargill Food Ingredients North America; Cargill Food Ingredients Europe; Cargill Food Ingredients Latin America; Cargill Food System Design; Cargill Meat Solutions. INDUSTRIAL: Cargill Deicing Technology; Cargill Ferrous International; Cargill Industrial Oils and Lubricants; Cargill Industrial Starches; Cargill Salt. ORIGINATION AND PROCESSING: Cargill Cotton; Cargill Grain & Oilseed Supply Chain; Cargill Sugar. RISK MANAGEMENT AND FINANCIAL: Cargill Coal; Cargill Petroleum; Cargill Power & Gas Markets; Cargill Risk Management; Cargill Trade & Structured Finance; Car Val Investors.

PRINCIPAL COMPETITORS

Archer Daniels Midland Company; Bunge Limited; Louis Dreyfus Group; Tyson Foods, Inc.; Swift & Company; CHS Inc.; Corn Products International, Inc.; Smithfield Foods, Inc.; Land O’Lakes Purina Feed LLC; Morton International, Inc.; Ag Processing Inc.; ConAgra Foods, Inc.; Ajinomoto Co., Inc.; Michael Foods, Inc.; Saskatchewan Wheat Pool Inc.; Tate & Lyle PLC; Hormel Foods Corporation.

Cargill, Incorporated

views updated Jun 11 2018

Cargill, Incorporated

Post Office Box 9300
Minneapolis, Minnesota 55440-9300
U.S.A.
Telephone: (612) 742-7575
Fax: (612) 742-7393
Web site: http://www.cargill.com

Private Company
Incorporated: 1936
Employees: 84,000
Sales: $47.6 billion (2000)
NAIC: 112112 Cattle Feedlots; 112310 Chicken Egg Production; 212392 Phosphate Rock Mining; 212393 Other Chemical and Fertilizer Mineral Mining; 311111 Dog and Cat Food Mfg.; 311119 Other Animal Food Mfg.; 311211 Flour Milling; 311212 Rice Milling; 311213 Malt Mfg.; 311221 Wet Corn Milling; 311222 Soybean Processing; 311223 Other Oilseed Processing; 311330 Confectionery Mfg. from Purchased Chocolate; 311611 Animal (Except Poultry) Slaughtering; 311612 Meat Processed from Carcasses; 311615 Poultry Processing; 311911 Roasted Nuts and Peanut Butter Mfg.; 311942 Spice and Extract Mfg.; 325193 Ethyl Alcohol Mfg.; 325310 Fertilizer Mfg.; 331111 Iron and Steel Mills; 422470 Meat and Meat Product Wholesalers; 422510 Grain and Field Bean Wholesalers; 422590 Other Farm Product Raw Material Wholesalers; 422720 Petroleum and Petroleum Products Wholesalers (Except Bulk Stations and Terminals); 422910 Farm Supplies Wholesalers; 422990 Other Miscellaneous Nondurable Goods Wholesalers; 483111 Deep Sea Freight Transportation; 483113 Coastal and Great Lakes Freight Transportation; 483211 Inland Water Freight Transportation; 522293 International Trade Financing; 523140 Commodity Contracts Brokerage

Cargill, Incorporated is the largest private corporation in the United States. Long known as a commodities merchant, Cargill in the early 21st century stood as one of the largest diversified services companies in the country, involved in nearly four dozen individual lines of business. In addition to merchandising grains, oilseeds, and other commodities, Cargill is a processor of beef, pork, and poultry (through the number three U.S. meat processor, subsidiary Excel Corporation), and several other products, including animal feed, cocoa, eggs, fertilizer, flour, and rice; a transporter of commodities; a manufacturer of steel (through subsidiary North Star Steel Co.); and a financial and technical services provider.

Cargill’s corporate philosophy, shaped by its participation in the grain trade, emphasizes secrecy and an intricate worldwide intelligence network. Robert Bergland, former secretary of agriculture, told the Minneapolis Star and Tribune that “they probably have the best crop-marketing intelligence available anywhere, and that includes the CIA.” While secrecy provides an enormous operational advantage to Cargill, it creates problems as well. For example, during difficult times, Cargill’s low profile left no reservoir of favorable public opinion. After becoming president of Cargill in 1957, an exasperated Cargill MacMillan complained that the company received public attention only when it was involved in a court case. This situation remained largely unchanged until late in the 20th century when the company launched an unprecedented advertising campaign designed to bolster its public image.

Grain Trading Roots

William Wallace Cargill began his career in the grain business in 1865 in Conover, Iowa. The business grew as it followed the expansion of the railroad into northern Iowa after the Civil War. In 1875 William Cargill moved the headquarters of his company to La Crosse, Wisconsin. He formed several different partnerships with his brothers, Samuel and James. With Samuel he formed W.W. Cargill and Brother in 1867, which became the W.W. Cargill Company in 1892. James Cargill operated in the Red River Valley in North Dakota and Minnesota with a partner, John D. McMillan. In 1882 the partners sold their Red River Valley grain elevators to William Cargill in order to raise more capital. Then in 1888, James, William, and Sam Cargill formed Cargill Brothers. In 1890 this firm became the Cargill Elevator Company, headquartered in Minneapolis, Minnesota.

In 1895 William W. Cargill’s daughter married John Hugh MacMillan, and later his son William S. Cargill also married a MacMillan. When the elder Cargill died in 1909, John Hugh MacMillan forced out William S. Cargill and took control of the company. An ensuing feud simmered for decades, but control of the company now rests firmly in the hands of the MacMillan family, although some Cargills still hold stock (along with a number of employees).

John MacMillan ran the company until 1936, leading it through a difficult period after the struggle for power. MacMillan was a cautious manager who established the rule that the company would not speculate in commodities, a careful policy that helped establish the company’s reputation in banking circles—an important consideration since the large deals that became Cargill’s mainstay required huge lines of credit.

After World War I, MacMillan took two steps that helped lay the foundation for the future growth of the company. Since its beginnings in 1865, Cargill had been based entirely in the Midwest, selling to eastern brokers. When brokers from Albany, New York, began to open offices in the Midwest, bypassing Cargill as a middleman, Cargill opened an office in New York in 1922. In 1929 Cargill opened a permanent office in Argentina to secure immediate information on Latin American wheat prices. In 1936 the Cargill Elevator Company merged with other Cargill firms to become Cargill, Incorporated.

John MacMillan, Jr., became president of Cargill in 1936. While maintaining many of his father’s cautious policies, he also brought an imaginative and visionary quality to the company. During the Great Depression, Cargill invested heavily in the storage and transportation of grain, secure in the knowledge that a recovering economy would find Cargill prepared to reap maximum benefit. He also left his mark on grain transportation. Unsatisfied with the standard barge design, he and some associates designed a new type of articulated barge and submitted the design to shipyards. When no company would build the barges, Cargill established its own unit to construct them. Soon Cargill built barges at half the typical cost and with twice the capacity of standard barges.

At the same time, the aggressive nature of MacMillan’s management style also created problems for the company, most notably in the September Corn Case of 1937. The 1936 corn crop had been poor, and the 1937 crop would not be available until October. The Chicago Board of Trade and the U.S. Commodity Exchange Authority accused Cargill of trying to corner the corn market. After Cargill refused a Board of Trade order to sell some of its corn, the board suspended Cargill Grain Company, the subsidiary that conducted trading, from membership. When the board eventually lifted its suspension, Cargill refused to rejoin. For decades, Cargill carried on its trading through independent traders and proclaimed its satisfaction with the greater security this method afforded. Nevertheless, it did rejoin in 1962.

Diversifying from the 1940s to the 1970s

By 1940, 60 percent of Cargill’s business involved foreign markets, and World War II had a crippling effect on business. While Cargill did build ships for the U.S. Navy, this enterprise could not replace its lost international business, so the company began a major diversification program, entering into vegetable oil and animal feed. The two activities are closely related: pressing oil leaves high-protein meal, which is then used in animal feed. In 1943 Cargill entered the soybean processing business through the purchase of plants in Cedar Rapids and Fort Dodge, Iowa, and Springfield, Illinois. In 1945 Cargill purchased Nutrena Feeds, an animal-feed producer, thereby doubling its capacity in poultry and animal feeds. Corn and soybean processing were two of the most rapidly expanding agricultural areas in the 20 years after World War II, however, and oil processing soon outstripped the value of animal feeds. By 1949, Cargill had made a major entry into soybean processing, and its researchers were already exploring the value of safflower and sunflower oil.

John MacMillan, Jr., and his brother Cargill MacMillan were determined to expand the company after the war, but in a cautious manner that minimized risk. Cargill took the lead among the major grain companies in efforts to combine a network of inland grain elevators with the ability to export large quantities of grain. Two developments in the 1950s helped to establish Cargill in world trade. In 1953 Cargill opened a Swiss subsidiary, Tradax, to sell grain in Europe. Eventually, Tradax grew into one of the largest grain companies in the world. In 1960, Cargill opened a 13-million-bushel grain elevator in Baie Comeau, Quebec. This facility allowed Cargill to store grain for shipment during the months that winter weather closed the Great Lakes to traffic. The grain elevator also cut the cost of midwestern grain bound for Europe by 15 cents a bushel. In order to maximize profit, the barges that took grain to Baie Comeau hauled back iron ore. Similarly, in 1954 barges that carried grain to New Orleans began to backhaul salt up the Mississippi. Both practices would lead to profitable new enterprises for Cargill. Before the end of the decade, Cargill’s sales topped the $1 billion mark.

Company Perspectives:

Bringing together producer and consumer…finding new and innovative ways to process and move basic goods and services efficiently and economically … drawing upon years of knowledge and experience to meet the needs of today and prepare for the challenges of tomorrow. Those are Cargill’s commitments and its traditions.

Cargill became involved in grain sales to communist countries at an early date. In the early 1960s, Cargill began to sell grain to Hungary and the Soviet Union, while its Canadian subsidiary also played a significant role in trade with the Soviets. After a lapse in trade of several years during the late 1960s, Soviet leader Leonid Brezhnev resumed grain deals as part of his effort to improve the Soviet standard of living. At the same time, the United States, anxious to improve relations with the Soviet Union, eased trade restrictions. These developments set the stage for the famous grain purchase of 1972. The U.S.S.R. purchased 20 million tons of wheat—roughly one-fourth of the American harvest—of which Cargill sold one million tons.

While Cargill actually lost money on the sale, the ensuing change in the market was more important. The massive sale of wheat, combined with a worldwide drought, drove up agricultural prices and increased Cargill’s profits in all areas of operations. Sales increased from $2.2 billion in 1971 to $28.5 billion in 1981. Together with Cargill’s success in high-fructose corn syrup (it had entered the wet corn milling market in 1967 through the purchase of a mill in Cedar Rapids, Iowa) and animal feed, this boom financed a significant expansion: during that decade Cargill purchased 137 grain elevators; companies in the coal, steel (North Star Steel Company, bought in 1974), and cattle feedlot (Caprock Industries Inc., in 1974) industries; and Ralston Purina’s turkey processing and marketing division (1974). The company also entered the flour milling industry through the purchase of Burrus Mills, which was based in Saginaw, Texas, in 1972; and began merchandising cotton in 1975 with the acquisition of Memphis, Tennessee-based Hohenberg Bros. Company. In 1979 beef processing was added to Cargill’s growing array of operations with the purchase of MBPXL Corporation of Wichita, Kansas, which was renamed Excel Corporation in 1982. Also in 1979 came the purchase of the Laurent malt plant in France, which initiated Cargill’s involvement in the malting business. Finally, in 1981, Cargill beefed up its trading operations with the acquisition of Ralli Bros, and Coney, a U.K.-based international trader of cotton, rubber, wool, and fiber.

Suffering from Slower Growth in the 1980s

The 1980s brought economic problems that slowed Cargill’s growth. A 1980 U.S. government embargo on grain sales to the Soviet Union left Cargill long on grain. While the government provided support for companies that were damaged by the embargo, a rise in the value of the dollar and a debt crisis in developing countries further burdened American agriculture firms. Cargill continued to search for opportunities in the depressed business cycle. Typical of its approach was the purchase of Ralston Purina’s soybean-crushing plants in 1985. Overcapacity in the soybean industry did not dissuade Cargill. Whitney MacMillan pointed out that when a business is not doing well there is more room for improvement, and Cargill remained confident that investment during hard times would reap major rewards during the next rise in the business cycle.

Despite periodic downturns, Cargill had exhibited an impressive compound annual growth rate of 15.8 percent sustained over a 25-year period, based on net worth (from $95 million in 1966 to $3.7 billion in 1991). Part of this success was credited to its consistently strong management. Early in the 1930s, Cargill began one of the first management-trainee programs in the country. Cargill did not rely on business-school graduates but took trainees from a wide range of backgrounds and introduced them to the company’s system. Cargill placed young executives in responsible positions quickly and groomed those who succeeded. This system proved its worth in 1960 when John MacMillan, Jr., died. For 16 years nonfamily employees ran the company under the leadership of Erwin Kelm. When Kelm retired in 1976, Whitney MacMillan, great-grandson of founder W.W. Cargill, became chairman. Most upper-level administrators at the company were graduates of Cargill’s training program, and these officers, like family members, took the long view in planning for the welfare of the company.

Key Dates:

1865:: William Wallace Cargill enters the grain business in Conover, Iowa.
1875:: Cargill relocates his business to La Crosse, Wisconsin.
1888:: William, James, and Sam Cargill form Cargill Brothers.
1890:: Cargill Brothers becomes Cargill Elevator Company, headquartered in Minneapolis.
1909:: John Hugh MacMillan, son-in-law of William Cargill, takes control of the company.
1922:: Cargill opens an office in New York City.
1936:: Cargill Elevator and other Cargill firms are merged to form Cargill, Incorporated.
1943:: Company enters the soybean processing business.
1945:: Nutrena Feeds is acquired, doubling the company’s capacity in poultry and animal feeds.
1953:: Tradax, a Swiss subsidiary, is formed to sell grain in Europe.
1954:: Company begins backhauling salt up the Mississippi River.
1967:: Company expands into wet corn milling through purchase of a mill in Cedar Rapids, Iowa.
1972:: Cargill enters the flour milling business.
1974:: Company purchases Ralston Purina’s turkey processing and marketing division; Caprock Industries, a cattle feedlot operator; and North Star Steel Company.
1975:: Hohenberg Bros. Company, a cotton merchandiser, is acquired.
1979:: Cargill acquires MBPXL Corporation, a beef processor.
1981:: U.K.-based Ralli Bros, and Coney, a major international commodity trader, is acquired.
1982:: MBPXL changes its name to Excel Corporation.
1990:: Major reorganization of North American operations is undertaken.
1992:: Implementation of employee stock ownership plan enables some family members to cash in their ownership shares.
1997:: The North American salt business of Akzo Nobel NV is acquired.
1999:: Cargill acquires the worldwide grain storage, transportation, export, and trading operations of Continental Grain Company.
2000:: Cargill announces plans to acquire Agribrands International, a major animal feed maker.

As Cargill increasingly depended upon nonfamily members for leadership, the company faced several challenges starting in the mid-1980s that would force it to undergo its most dramatic transformation to date. From the mid-1980s through the early 1990s, Cargill consistently failed to meet its company-wide sales targets primarily because of continued difficulties in grain merchandising, a sector that had never recovered from the 1980 embargo. Cargill’s successes had also led to a bloated operation in which ConAgra Inc., its biggest customer, had to purchase products from 18 different Cargill divisions. Chairman Whitney MacMillan and most of the other senior leaders were nearing retirement age with no clear successor from the younger ranks in sight. Finally, some of the family members were lobbying for the opportunity to cash in on Cargill success through more than the relatively modest annual dividends they received from their stock.

Reorganizing in the Early 1990s

With the help of consultants McKinsey & Company, MacMillan initiated a major reorganization of Cargill’s North American operations in 1990. The previous organization along product lines was replaced with a “soft matrix” type of structure, which intermixed product line and geographical area management. In order to bring fresh ideas into the organization, Cargill’s board of directors was overhauled to include five members from management, five family shareholders, and five outside directors (the first outsiders in 40 years). The structure was also intended to allow the board to mediate between family members and Cargill management.

Such mediation would become more and more critical since Cargill faced the prospect of its first nonfamily CEO since the Erwin Kelm era of 1960-76. Only two fifth-generation family members worked for the firm, and neither had enough experience to take over when MacMillan retired. Eventually MacMillan selected Ernest S. Micek, former president spresident and chief operating officer in 1994 before taking over as CEO and chairman in August 1995. Still, at age 59, Micek was anticipating a short tenure (especially by Cargill standards), since company rules mandated retirement at age 65. MacMillan had retired after more than 44 years at the company.

Meanwhile, and amid false rumors that Cargill would finally go public, the issue of company ownership was at least temporarily settled through the implementation of an employee stock ownership plan in 1992. Family members were given the opportunity to cash in as much as 30 percent of their ownership stake in Cargill. It turned out that only 17 percent was sold, for a total of $730 million, funded through borrowing. About 20,000 Cargill employees in the United States were eligible to receive the resulting stock, ending a long history of ownership exclusively by Cargills and MacMillans.

To reduce Cargill’s dependence on the perpetually fickle grain business, the company committed to a program of radical diversification. One aspect of this program was to no longer simply be a commodity merchandiser, but to process the commodities as well—what many called “moving up the food chain.” Already an established meatpacker in the United States through its Excel subsidiary, Cargill opened a new plant in Alberta, Canada, in 1989 in the midst of a downturn in meat sales and became the top meatpacker in Canada by 1992. The company also began producing brand-name products for sale to consumers, such as its Sun Valley Poultry chickens and turkeys in England and its Honeysuckle White and Riverside turkeys in the United States. Through these efforts, Cargill was attempting to gain ground on competitors such as ConAgra, which had moved heavily into branded products throughout the 1980s. By 1993 Cargill was the third largest U.S. food company, behind only Philip Morris and ConAgra, and its annual food sales had reached as high as $22 billion.

A second area of diversification was the development of Cargill’s Financial Markets Division. Based on knowledge gained through decades of trading in the world markets, this operation supported the efforts of the parent company and its subsidiaries through a full spectrum of financial services. Started in the mid-1980s and expanded rapidly in the early 1990s, the division generated almost $100 million in earnings for the 1992-93 fiscal year out of the company total of $358 million.

By the mid-1990s, Cargill had surprised many observers by its diversity in both operations and the locations of those operations. In addition to being the top grain company in the world and the number three food company in the United States, the company also boasted the eighth largest U.S. steel producer in its North Star Steel subsidiary, the top position in European cocoa processing, and the number one ranking among pet food processors in Argentina. For the fiscal year ending in May 1995, Cargill reported that its revenues exceeded the $50 billion mark for the first time, totaling about $51 billion, with net income standing at $671 million.

Early in the next fiscal year, Cargill exited from the U.S. chicken processing market when it sold five plants in Georgia and Florida to Tyson Foods Inc. The deal also involved the transfer of ownership of a pork processing facility in Marshall, Missouri, from Tyson to Excel, bolstering that subsidiary’s position among the top five U.S. pork producers. Cargill retained its non-U.S. chicken operations as well as its turkey business. For fiscal 1996, Cargill reported record net income of $902 million on record sales of $55.98 billion. In 1997 the company became one of the largest producers and marketers of salt in the world with the purchase of the North American salt business of Akzo Nobel NV, an operation with annual revenues of about $450 million.

Economic Volatility and Major Transactions at the Turn of the Millennium

The economic turmoil that erupted in mid-1997 in Asia and then spread to Latin America and Russia sent global commodity markets into a deep slump, depressing both sales and earnings at Cargill. The company’s financial services arm also suffered setbacks as it was involved in trading Russian financial instruments when that country’s economy turned sour in the summer of 1998; the unit also lost millions through bad loans to buyers of mobile homes. Cargill earned only $468 million on revenues of $51.42 billion in fiscal 1998 and $597 million on $45.7 billion in sales the following year.

In the midst of these travails, in early 1998, Warren R. Staley was promoted from executive vice-president to president and COO. Staley became president and CEO in April 1999, then was named chairman as well in August 2000, following the retirement of Micek. This period was noteworthy for a number of major deals that Cargill was involved in. In early 1998 Cargill and Monsanto Company formed a biotechnology joint venture whereby Cargill would contract with farmers to grow crops containing Monsanto genes and would then process the resulting harvests into food and livestock feed ingredients. Then in October 1998 Cargill sold its foreign seed operations to Monsanto for about $1.4 billion. In September 1998 Cargill agreed to sell its North American seed operations, which controlled about 4 percent of the U.S. corn seed market, to AgrEvo GmbH, a joint venture of Hoechst AG and Schering AG, for $650 million. Soon thereafter, however, Pioneer Hi-Bred International Inc. sued Cargill, Monsanto, and one other firm alleging that they had wrongfully obtained and used genetic material developed by Pioneer. Following an internal investigation, Cargill admitted that an employee had in fact improperly used Pioneer genetic material in his work at Cargill. Almost immediately, AgrEvo pulled out of the Cargill deal. Cargill was also forced to destroy some of its seed lines, which reduced the value of the business it sold to Monsanto, leading Cargill to return more than $200 million to Monsanto. In May 2000 Cargill agreed to pay $100 million to Pioneer to settle the lawsuit. Cargill then sold its North American seed operation in late 2000 to Dow Chemical Company for an undisclosed sum.

Meantime, in November 1998, Cargill agreed to acquire the worldwide grain storage, transportation, export, and trading operations of its chief rival, Continental Grain Company for an undisclosed sum that industry observers estimated at several hundred million dollars. The deal quickly aroused bitter opposition from farm groups and legislators across the Farm Belt concerned that Cargill would gain too much control of grain exports in a market already suffering from depressed commodity prices. The U.S. Justice Department filed a lawsuit to block the deal. An agreement was reached in July 1999 whereby the government approved the deal contingent upon Cargill divesting nine grain-handling and transport facilities in eight states. This constituted a significant divestiture as it represented about 25 percent of Continental Grain’s business.

In the midst of the Pioneer seed debacle and the contentious purchase of the Continental Grain assets, the normally secretive Cargill launched a surprising corporate image campaign. In January 1999 the company launched a three-year, $30 million ad campaign with a Super Bowl television spot and a full-page ad in the Wall Street Journal. The timing of the launch was purely coincidental as it had been planned the previous summer. The ads were aimed at farmers and food manufacturers and highlighted long-term relationships between the company and its customers. According to Micek, the company’s executives hoped to “put more of a human face on Cargill” through the campaign.

In January 2000 Cargill and Dow Chemical announced that a 50-50 joint venture called Cargill Dow Polymer would begin construction of a manufacturing plant in Blair, Nebraska, where a new kind of plastic made from plants rather than petroleum would be produced. In December 2000 Cargill announced that it had reached an agreement to acquire Agribrands International, Inc. for $580 million, a deal that foiled a planned merger between Agribrands and Ralcorp Holdings Inc. Agribrands would be folded into Cargill Animal Nutrition, maker of feeds under such brands as Nutrena and Acco Feeds. Cargill would gain a much larger international presence through Agribrands’ 70 plants in 17 countries, producing feeds under the brand names Purina, Chow, and Checkerboard. Agribrands had fiscal 2000 earnings of $45 million on revenues of $1.2 billion. Through this acquisition, Cargill would continue its steady expansion beyond its grain trading roots. At the dawn of the new millennium, the increasingly diversified Cargill seemed destined to remain one of the most powerful companies in the world.

Principal Subsidiaries

Caprock Industries Inc.; Cargill Citro-America, Inc.; Cargill Energy Corporation; Cargill Ferrous International; Cargill Fertilizer Inc.; Cargill Investor Services Inc.; Cargill Marine and Terminal, Inc.; Cargill Technical Services; Excel Corporation; Hohenberg Bros. Company; Illinois Cereal Mills Inc.; North Star Steel Co.; Wilbur Chocolate Company Inc.; Cargill Limited (Canada); Ralli Bros, and Coney (U.K.); Seaforth Corn Mills (U.K.).

Principal Competitors

Archer Daniels Midland Company; ConAgra Foods, Inc.; IBP, inc.; Smithfield Foods, Inc.; Hormel Foods Corporation; Sara Lee Corporation; Corn Products International, Inc.; Ag Processing Inc.; Agribrands International, Inc.; Cenex Harvest States Cooperative; ContiGroup Companies, Inc.; Saskatchewan Wheat Pool; Ajinomoto Co., Inc.; Eridania Béghin-Say; Farmland Industries, Inc.; Perdue Farms Incorporated; Tate & Lyle PLC; The Dow Chemical Company; E.I. du Pont de Nemours and Company.

Cargill, Inc.

views updated May 14 2018

Cargill, Inc.

15407 McGinty Road West
Minnetonka, Minnesota 55343
U.S.A.
(612) 475-7575

Private Company
Incorporated: 1930
Employees: 53,700
Sales: US$32.28 billion (1986)

Cargill modestly describes itself as a buyer, transporter, and seller of bulk commodities. While accurate, this summary minimizes the variety and importance of the company’s operations. Cargill, probably the largest private corporation in the United States, is one of the largest grain and commodities marketers in the world. Substantial interests in corn and oilseed processing, molasses, meat processing, transportation, and steel round out the picture. All Cargill operations require the same basic skills: careful handling, transportation, and marketing. In an interview with The New York Times, Chairman Whitney MacMillan compared Cargill to Proctor and Gamble: “we stick to our knitting... How many soaps does P. & G. make? In a sense they’re all the same. Can you tell me the difference between trading soybeans, cotton and rubber? They’re all soaps to us.” The diversity of Cargill operations provides an essential protection for the company since many of its operations are subject to serious price fluctuations.

Cargill’s corporate philosophy was shaped by its participation in the grain trade. This philosophy emphasizes secrecy and an intricate worldwide intelligence network. Robert Bergland, former secretary of agriculture, told the Minneapolis Star and Tribune that “they probably have the best crop-marketing intelligence available anywhere, and that includes the CIA.” While secrecy provides an enormous operational advantage to Cargill, it creates problems as well. One frustrated journalist summarized Cargill as a “secretive, inbred and suspicious” company. Cargill’s low profile has created no reservoir of favorable public opinion in difficult times. An exasperated Cargill MacMillan complained just after he had become president of Cargill in 1957 that the company rarely received public attention except when it was involved in a court case. As late as 1977, a company survey revealed that while 94% of farmers had heard of Cargill, only 49% knew what the company did.

William Wallace Cargill began his grain-business career in 1865 in Conover, Iowa. The business grew as it followed the expansion of the railroad into northern Iowa in the period after the Civil War. In 1875, William Cargill moved the headquarters of his company to La Crosse, Wisconsin. He formed several different partnerships with his brothers, Samuel and James. With Samuel he formed W. W. Cargill and Brother in 1867, which became the W. W. Cargill Company in 1892. James Cargill and John D. McMillan operated in the Red River Valley in North Dakota and Minnesota. In 1882, they sold their Red River Valley grain elevators to William Cargill in order to raise more capital. Then in 1888, James, William, and Sam Cargill formed Cargill Brothers. In 1890, this firm became the Cargill Elevator Company, headquartered in Minneapolis, Minnesota.

In 1895, William W. Cargill’s daughter married John Hugh MacMillan, and later his son William S. Cargill also married a MacMillan. This union would reshape the company. When the elder Cargill died in 1909 the company suffered its greatest crisis. John Hugh MacMillan forced William S. Cargill out and took control of the company. The ensuing feud simmered for decades, but control of the company now rests firmly in the hands of the MacMillan family, though some Cargills still hold stock.

John MacMillan ran the company until 1936. MacMillan led the company through a difficult period after the struggle for power; not until 1916 was its financial situation completely secure. MacMillan was a cautious manager who established the rule that the company would not speculate in commodities, a careful policy that helped establish the company’s reputation in banking circles—an important consideration since the large deals which became Cargill’s mainstay required huge lines of credit.

After World War I, MacMillan took two steps that helped lay the foundation for the future growth of the company. Since its beginnings in 1865, Cargill had been based entirely in the Midwest, selling to eastern brokers. When Albany, New York brokers began to open offices in the Midwest, bypassing Cargill as a middleman, Cargill opened an office in New York in 1922. In 1929, Cargill opened a permanent office in Argentina in order to secure immediate information on Latin American wheat prices. And in 1930 the Cargill Elevator Company became Cargill, Inc.

John MacMillan Jr. became president of Cargill in 1936. He followed most of his father’s cautious policies, but he brought an imaginative and visionary quality to the company. During the Depression, Cargill invested heavily in the storage and transportation of grain, secure in the knowledge that a recovering economy would find Cargill prepared to reap maximum benefit. He also left his mark on grain transportation. Disliking the standard barge design, he and some associates designed a new type of articulated barge and submitted the design to shipyards. When no company would build the barges, Cargill established its own unit to construct them. Soon Cargill built barges at half the typical cost and with twice the capacity of standard barges.

But John Jr.’s aggressiveness also created problems for the company. Most serious was the September Corn Case of 1937. The year 1936 had been a bad one for corn, and the 1937 crop would not be available until October. The Chicago Board of Trade and the United States Commodity Exchange Authority accused Cargill of trying to corner the corn market. When Cargill refused a Board of Trade order to sell some of its corn, the Board suspended Cargill Grain Company, the subsidiary which conducted trading, from membership. Typically, when the Board eventually lifted its suspension, Cargill refused to rejoin. For decades, Cargill carried on its trading through independent traders and proclaimed its satisfaction with the greater security this method afforded. It did rejoin in 1962, however.

World War II created serious problems for Cargill. By 1940, 60% of Cargill’s business involved foreign markets. While Cargill did build ships for the navy, this enterprise could not replace its lost international business, so the company began a major diversification and entered the vegetable-oil and animal-feed fields for the first time. The two activities are closely related: pressing oil leaves high-protein meal, which is then used in animal feed. Cargill’s first priority was to have some product to sell back to farmers after buying their grain, and animal feed was the logical choice. In 1945, Cargill purchased Nutrena, an animal-feed producer, a transaction which doubled its capacity in poultry and animal feeds. Oil processing soon outstripped the value of animal feeds, however. Corn and soybean processing were two of the most rapidly expanding agricultural areas in the 20 years after World War II. By 1949, Cargill had made a major entry into soybean processing and its researchers were already exploring the value of safflower and sunflower oil.

John MacMillan Jr. and his brother Cargill were determined to expand the company after the war, but they never forgot the lessons of 1909. The company expanded steadily, but in a cautious manner that minimized risk. Cargill took the lead among the major grain companies in efforts to combine a network of inland grain elevators with the ability to export large quantities of grain. Two developments in the 1950s helped to establish Cargill in world trade. In 1955 Cargill opened a Swiss subsidiary, Tradax, to sell grain in Europe. Eventually, Tradax grew into one of the largest grain companies in the world. And in 1960, Cargill opened a 13-million-bushel grain elevator at Baie Comeau, Quebec. This facility allowed Cargill to store grain for shipment during the months that winter weather closed the Great Lakes to traffic. The grain elevator also cut the cost of midwestern grain bound for Europe by 15¢ a bushel. In order to maximize profit, the barges that took grain to Baie Comeau backhauled iron ore. Also in the 1950s, barges that carried grain to New Orleans began to backhaul salt. Both practices would lead to profitable new enterprises for Cargill. Before the end of the decade, Cargill’s sales topped the $1 billion mark.

Cargill became involved in grain sales to communist countries at an early date. In the early 1960s, Cargill began to sell grain to Hungary and the Soviet Union, while its Canadian subsidiary also played a significant role in trade with the Soviets. After a lapse of several years in the late 1960s, Soviet leader Leonid Brezhnev’s desire to improve the Soviet standard of living led to a renewed interest in grain deals. The United States, anxious to improve relations with the Soviet Union, eased trade restrictions. These developments set the stage for the famous grain purchase of 1972. The U.S.S.R. purchased 20 million tons of wheat—roughly one-fourth of the American harvest, of which Cargill sold one million tons.

While Cargill actually lost money on the sale, the ensuing change in the market was more important. The massive sale of wheat, combined with a worldwide drought, drove up agricultural prices and increased Cargill’s profits in all areas of operations. Sales increased from $2.2 billion in 1971 to $28.5 billion in 1981. Together with Cargill’s success in high-fructose corn syrup and animal feed, this boom financed a significant expansion: during that decade Cargill’s purchases included 137 grain elevators; coal, steel, and flour companies; and Ralston Purina’s turkey processing and marketing division.

The 1980s brought economic problems that slowed Cargill’s growth. The 1980 embargo on grain sales to the Soviet Union left Cargill long on grain. The Carter administration provided support for the companies which the embargo damaged, but the rise in the value of the dollar and the Third World debt crisis added to the problems of American agriculture. Cargill continued to search for opportunities in the depressed business cycle. Typical of its approach was the purchase of Ralston Purina’s soybean-crushing plants in 1985. Overcapacity in the soybean industry did not faze Cargill. Whitney MacMillan pointed out that when a business is not doing well there is more room for improvement. Cargill remained confident that investment during hard times would reap major rewards during the next rise in the business cycle.

Several factors indicate that Cargill will continue to grow. Early in the 1930s, Cargill began one of the first management-trainee programs in the country. Cargill does not rely on business-school graduates but takes trainees from a wide range of backgrounds and introduces them to the company’s system. Cargill places young executives in responsible positions quickly and grooms those who succeed. This system proved its worth in 1960 when John MacMillan Jr. died. For 16 years nonfamily employees ran the company under the leadership of Erwin Kelm. When Kelm retired in 1976, Whitney MacMillan became chairman. Most upper-level administrators at the company are graduates of Cargill’s training program, and these officers, like family members, take the long view in planning for the welfare of the company. The family has shown a determination to plow back virtually all profits into the company, a dedication that indicates that the company will maintain a strong capital base. It is fair to guess that caution and the search for long-term growth opportunities will continue to characterize Cargill.

Principal Subsidiaries

Cargill Investor Services, Inc; Hohenberg Brothers Company; Tradax America Inc; Cargill Agricola S.A. (Brazil); Dutch General Cocoa-Gerkens Group; North Star Steel Company; North Star Steel Texas Inc; Cargill Marine and Terminal, Inc.; Excel Corporation.

Cargill, Inc.

views updated May 14 2018

Cargill, Inc.

15407 McGinty Road West
Wayzata, Minnesota 55391
USA
Telephone: (952) 742-7375
Fax: (952) 277-4455
Web site: www.cargill.com

COLLABORATE>CREATE>SUCCEED CAMPAIGN

OVERVIEW

Cargill, Inc. decided at the end of the 1990s to recast its image as a staid commodities company to an innovative provider of solutions for its food industry customers. The company developed a 10-year plan to change the way it operated and was perceived in the world. A new logo was created to announce that change was under way at Cargill, and a fresh branding message was conceived. In the fall of 2003 an integrated marketing campaign dubbed "Collaborate>Create>Succeed" was launched to articulate Cargill's new vision.

The campaign's main target was director-level officers in food industry companies, the goal being to show them through concrete examples how Cargill could partner with them to solve problems and in the end help them make more money. The TV spots and print ads laid out a real-world problem and then revealed the Cargill solution that proved profitable to the customer. For example, one ad centered on Cargill's efforts to help confectioners develop a better-tasting, low-sugar chocolate. Similar ads also presented these same stories on the Internet.

The long-term campaign, the budget of which was not publicly disclosed by Cargill, succeeded in improving the company's image with the target audience, which also indicated that it was now willing to pay more for Cargill products and services. The "Collaborate>Create>Succeed" theme also galvanized the Cargill rank and file as they began taking to heart the concept of partnership with customers. One of the print ads in the campaign won a prestigious honor, awarded first place for the Best Single Advertisement in the American Business Media's Creative Excellence in Business Advertising (CEBA) competition.

HISTORICAL CONTEXT

As the twentieth century came to a close, Cargill, the largest private corporation in the United States, with annual sales approaching $50 billion, found itself highly diversified yet typecast in the mind of its customers. The company was involved in virtually all aspects of the food-supply chain yet remained pigeonholed as a trading company and low-cost processor. Cargill's sheer size also worked against it, as customers had a difficult time associating such a behemoth with innovation, let alone possessing concern about the plight of the smaller companies it did business with. During the customer research phase of the "Collaborate>Create>Succeed" campaign, one respondent summed up an all-too-common opinion: "When Cargill says its believes in a win/win, they mean Cargill wins twice."

In 1999 Cargill initiated a 10-year plan called Strategic Intent, to reorganize the company for the new century and change its image. The stated goal was "By 2010, Cargill will be the recognized global leader in providing agriculture and food chain customer solutions that enable them to succeed in their businesses." The achievement of this goal required a reorganization of the way Cargill did business, a communications effort to change the mind-set of its workforce, and a major marketing campaign to change the perception of Cargill with its customers. More importantly it wanted to make the case that Cargill was more than just commodities and that despite its size it wanted to partner with customers to help them solve their problems to the benefit of both parties. Cargill was restructured into 90 business units, thus allowing employees to focus on the needs of their customers. The company then began to reposition the Cargill brand, in 2001 setting up the Cargill Brand Council, comprising senior executives from the business units as well as public affairs and marketing people, to coordinate the introduction of a new logo and develop a new message. In essence Cargill became a master brand applied to a wide variety of products and services. The new logo was unveiled in February 2002, and in the autumn of that year Cargill began conducting customer research to flesh out the brand strategy. In May 2003 the new brand-positioning strategy was formulated, and in September 2003 the "Collaborate>Create>Succeed" campaign was launched to articulate that message to current and potential customers on an international stage.

TARGET MARKET

While "Collaborate>Create>Succeed" tried to communicate to the world a new image of Cargill, it was primarily a business-to-business advertising campaign aimed at every level of the food industry, including processors, marketers, and retailers. But the ultimate target were primary decision makers, the C-suite, generally those executives with "chief" in their title (chief executive officer, chief financial officer, chief operating officer), who held the levers of power in the food-processing, food-service, and grocery retail industries. These were the people who established a company's strategy and determined how money was to be spent. While changing the perception of Cargill among the lower ranks was good public relations and might trickle up to influence the C-suite, the campaign sought to reach senior executives directly, change their perception of Cargill, and lead to new business opportunities. In this way the company would continue to move farther away from the commodities model, selling large quantities of raw substances at cheap prices, to become a provider of more profitable value-added services—becoming a partner rather than a mere supplier. The campaign also targeted Cargill's employees, making them more aware of the company's new mission and encouraging them to buy into the program and begin seeing customers as partners. In the end it was the rank and file that would have to make sure that the new campaign was a promise to fulfill and not mere puffery.

COMPETITION

With close to 100 business units, Cargill competed against a multitude of companies in a wide range of fields and virtually everyone in the food-processing, grocery, and restaurant industries. One of its chief rivals on the global stage was Archer Daniels Midland Company, one of the largest processors of oilseeds, corn, and wheat in the world, generating about half the amount of revenue of Cargill. A somewhat smaller competitor, Bunge Ltd., focused on soybean, grain trading, and fertilizer. In terms of the "Collaborate>Create>Succeed" campaign, however, Cargill's competition was not the chief concern. There were not competing messages in the marketplace to address. Rather, Cargill was in a sense competing against the prevailing image of itself. The message was not that Cargill was better than ADM or Bunge but that it had more to offer to customers than they realized, that Cargill was not a complacent giant but a vibrant and innovative company.

MARKETING STRATEGY

The task of the "Collaborate>Create>Succeed" campaign was challenging because of Cargill's sheer size. "Cargill is quite a complicated company," Ann Ness, the company's director of advertising and brand management, told Nicole Garrison, writing for the Minneapolis/St. Paul Business Journal. "What we've found is that there is so much more that we offer that our customers don't know about. They might know us as an egg company, but not know us as a meat company. They might know us as a meat company, but not know us as a chocolate company." The last marketing campaign Cargill offered, almost three years earlier, promoted the idea that Cargill played a major role in "the world's diverse appetite for food." While it boosted the company's image, the advertising failed to tell the world what Cargill actually had to sell. "Collaborate>Create>Succeed," on the other hand, sought to provide concrete examples of what Cargill did. More importantly these examples were crafted into stories that followed the same pattern: if a customer had a need that could not be met in the general marketplace, then Cargill intervened to use its expertise to address that customer problem. Thus a major task for the marketing team was the selection of the case studies that would make the most compelling stories to illustrate the campaign's message. The case studies were categorized within three general challenges facing customers: how to grow new products; how to simplify a complex supply chain; and how to improve the health and nutrition of a product.

"Collaborate>Create>Succeed" was an integrated campaign with elements that included radio spots, online media, and a campaign microsite, but the anchors were 8 television spots, 12 print ads, 8 banner ads, and a web-site. An example of a success story told on television was the spot called "Better Beef," which juxtaposed images of cattle-driving cowboys and people pushing shopping carts on the range in search of a better cut of beef. The spot's voice-over explained how Cargill worked with supermarket chains to "round up" a line of high-quality hand-cut beef, followed by the tagline "This is how Cargill works with customers." Another spot, "Sugar-Free Chocolate," began with the problem facing people who loved chocolate but had to cut back on sugar. The solution was Cargill using its knowledge of sweeteners and sugar replacers to team up with candy makers to produce a new generation of better-tasting sugar-free chocolate.

IOWA ROOTS

Minnesota-based Cargill, Inc., was established in 1865 by William Wallace Cargill when he bought his first grain business in Iowa. He was later joined by his younger brother Sam and in 1868 moved to Minnesota, where the company established its headquarters and began to take advantage of the post-Civil War western expansion of the railroad and agriculture.

Five of the six television spots had a corresponding print ad that made the same point but added some detail. In the "Better Beef" print execution, the cowboys were seen sitting on the railing of a supermarket parking lot "cart corral." The text made the point that Cargill focused on the "entire ranch to retail process." The "Sugar-Free Chocolate" print ad used a child for its image rather than a young woman, but the text made the same point about how Cargill used its expertise to help develop new better-tasting sugar-free chocolate. The print ads also relied on the tag "This is how Cargill works with customers." Other ads showed how Cargill helped Italian cheese makers increase the production of Parmesan cheese by providing a specialized feed for the cows supplying the milk; how Cargill established a culinary school for sales reps so they could better serve the needs of chefs and restaurant managers; how Cargill helped baking companies to develop a new "heart-healthy" bread; and how Cargill worked with food-service customers to create the Thick'n Tender hamburger, a proprietary recipe for a burger that could remain in a warming tray for extended periods of time without losing its taste. Because a major goal of the "Collaborate>Create>Succeed" campaign was to educate the audience about the breadth of what Cargill had to offer, the print ads that touted success in one area of the food industry were run in a trade publication covering a different aspect. For people who wanted further information, the campaign's website offered details on the case studies that were the germ of the TV spots and print ads.

The media strategy of the campaign had to take into account the nature of the C-suite target audience. Hard working and pressed for time, they watched little television, aside from business programming. Hence the television spots were shown mostly on national cable news channels, including CNN, Fox News, and CNBC. Airtime was also purchased on certain sporting events, like golf and the Olympics. The target audience read a great deal, so the campaign's print ads ran in a range of publications, from trade publications to general business publications, such as Forbes and the Wall Street Journal. Ads also appeared on a number of websites, including WSJ Online, MarketWatch.com, and SmartBrief (a repository of daily food industry news). The online elements proved highly influential, as many executives increasingly turned to the Internet for up-to-the-moment information not available through other channels.

OUTCOME

The "Collaborate>Create>Succeed" campaign met its intended goals. An Annual Awareness and Attitude Study conducted by Cargill in 2005 demonstrated that as a result of the campaign, decision makers in the food industry were now more likely to see Cargill as a partner able to offer innovative solutions. Moreover they were willing to pay more for Cargill products and services. "Collaborate>Create>Succeed" generated a great deal of interest in Cargill, reflected by the more than 50,000 visits to the microsite during the first four months after the campaign broke. The balance sheet also showed improvement, as Cargill experienced double-digit sales and profit growth in each of the two years immediately after the campaign began in 2003.

"Collaborate>Create>Succeed" was also recognized by the advertising industry. In the autumn of 2005 one of the campaign's print ads, the "TNT Burger," won first place for Best Single Advertisement in the American Business Media's Creative Excellence in Business Advertising (CEBA) competition. But perhaps most important of all was the effect the campaign was having on the Cargill corporate culture. The "Collaborate>Create>Succeed" slogan was incorporated in almost all internal and external communications and became something of a rallying cry among employees—as the message and the behavior began to reinforce one another and play a major role in Cargill, making the goal of its 10-year plan a reality.

Cargill, Incorporated

Cargill, Incorporated

COMPANY PERSPECTIVES

KEY DATES

Cargill, Incorporated

Cargill, Incorporated

Grain Trading Roots

Diversifying from the 1940s to the 1970s

Company Perspectives:

Suffering from Slower Growth in the 1980s

Key Dates:

Reorganizing in the Early 1990s

Economic Volatility and Major Transactions at the Turn of the Millennium

Principal Subsidiaries

Principal Competitors

Further Reading

Cargill, Inc.

Cargill, Inc.

Principal Subsidiaries

Further Reading

Cargill, Inc.

Cargill, Inc.

COLLABORATE>CREATE>SUCCEED CAMPAIGN

OVERVIEW

HISTORICAL CONTEXT

TARGET MARKET

COMPETITION

MARKETING STRATEGY

IOWA ROOTS

OUTCOME

FURTHER READING

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