The story
Founded by George Weston in 1882, in Toronto.1
Bread route
In 1882, Toronto bread salesman George Weston, who got his start at the age of 12 as a baker's apprentice, went into business for himself when he bought a bread route from his employer, G.H. Bowen. Two years later, Weston bought out Bowen's Sullivan Street bakery and began baking and delivering his own bread. His first employee was Charles Upshall, another young baker, and the two worked long hours baking and delivering bread.
Weston's business prospered, particularly with the development of his "Real Home Made Bread," made from a combination of Manitoba No. 1 Hard Wheat and Ontario Fall wheat. His bakery underwent at least four expansions. At a time when many bakers were reluctant to adopt new technology, believing it adversely affected the taste and quality of their bread, Weston began introducing modern equipment to automate the baking process. "He has not spared expense getting in the latest designs of machinery to mix his dough," proclaimed one newspaper ad. Eventually, he renamed his bakery on Sullivan Street the "G. Weston’s Bread Factory."
Model Bakery
In October 1897, George Weston unveiled his "Model Bakery", Canada's largest and most modern bread factory, at the corner of Soho and Phoebe streets in Toronto. Newspaper reports told of how Weston had travelled to other countries to inspect the latest in baking technology and that his new establishment represented the best of what he had seen. Not only was the factory hailed for its efficiency and cleanliness, but also its capacity to turn out thousands of loaves of bread:
Remember that bread alone is made in this immense factory, and such bread it is that has made the name of its maker famous. Over 3200 large loaves are turned out on an average daily, but the factory has a capacity of 6,500 loaves. One may judge the largeness of the business done weekly when it takes nearly three hundred barrels of flour to supply the weekly demand. Two teams are kept busy all day Friday and Saturday hauling flour to supply the week’s needs.
Although the Model Bakery was well received by the Toronto press, its appearance resulted in a price war, apparently initiated by the city's other bakers. On hearing that competitors were offering cut-rate bread – contrary to a local bakers’ agreement that set a standard price for a loaf of bread – George Weston left the bakers' association and lowered his prices. In retaliation, the competition dropped what they charged at the wholesale level in an apparent attempt to fill store shelves with their bread. In spite of the price war, the Model Bakery continued to expand production such that a year later business had increased by 78 percent. Less than two years later, George Weston was selling his bread to 38 cities and towns beyond Toronto's borders. By 1901, the factory's output had reached 10,000 large loaves a day and its bread was shipped to over 100 communities throughout Ontario. By 1899, Weston had also established in the town of Oshawa, northeast of Toronto, a branch bakeshop, which he described as a "miniature Model Bakery", for the production of bread.
While the Model Bakery established George Weston as Canada's biggest baker, he had already begun to move beyond bread into other lines of baked goods. By 1897, he had set up a separate shop for the making of cakes, crumpets, pastries and buns. Then, early in the new century, Weston began making biscuits and sodas. While the bread business was very competitive and typically low margin, biscuits offered higher margins. Within a few years, the Model Bakery had a dozen salesmen taking orders for Weston's biscuits from merchants throughout Ontario. In promoting his new vanilla wafer biscuits, Weston employed a form of early direct marketing. From a decorative bread wagon, salesmen handed out free samples of the new biscuits and told housewives to ask for them at their grocer's.
In 1901, George Weston merged with J.L. Spink, a flour mill operator at Pickering, Ontario, to form the Model Bakery Company. The amalgamation soon raised concerns, though, that the new partnership would result in higher bread prices. In a letter to local newspapers, Weston tried to allay fears of a "Bread Trust" and asserted that rather than an attempt to destroy competition that the merger would reduce the price of bread by cutting out the middleman's profit:
... we are believers in honest competition. Some bakers are endeavouring to fill the minds of the grocers, and the public in general, with the fact that we intend to get control of the bread baking business for the purpose of raising the price of bread to consumers. Now, I wish to give this a straight denial. By the amalgamation of these two concerns, the mill and the bakery, we are going to lessen our expenses, and the public are going to reap the advantage.
Read the full text
Weston further contended that the new venture would ensure the very choicest flour for the Model Bakery and its bread. But while the Weston-Spink partnership lasted five years, for reasons unknown it was eventually dissolved and the baker and miller went their separate ways.
Canada Bread
In 1911, George Weston entered into another merger, this time with fellow bakers in Toronto, Montreal and Winnipeg, to form the Canada Bread Company. The Model Bakery became part of the assets of Canada Bread and a new Weston's Biscuit Factory went into production at the corner of Peter and Richmond streets in Toronto. Meanwhile, the Canada Bread partners agreed to stay out of the bread making business for at least the next ten years. With the expiration of that non-compete clause, and at the urging of former customers who complained about the quality of the city's bread, George Weston re-entered the bread business in 1921.
World War I
As World War I dragged on, various shortages arose and some biscuit lines had to be discontinued. In spite of those difficulties the company remained profitable. But with the tragic loss of a youngest son and concern that his eldest son Garfield might not return from overseas duty as a soldier in the Canadian Expeditionary Force, George Weston considered selling the company to competitor Christie, Brown and Company. A letter from Garfield, from the trenches of war-torn France, in which he asked his father to hold on until his return home, convinced George Weston not to sell his business.
English Quality Biscuits
In 1922, George and Garfield Weston undertook a new and somewhat risky venture with the introduction of "English Quality Biscuits." While in England as a young Canadian soldier, Garfield had toured the world-famous British biscuit factories and came away convinced that a similar product could be manufactured and successfully marketed in Canada. "After the armistice, he convinced his skeptical father to import machines to make English-style cookies in Canada." In addition to importing biscuit making ovens all the way from England, the company brought master baker William Doyle from London. That year, Weston's English Quality Biscuits were launched with an advertising campaign that included an elaborate display at the Canadian National Exhibition in Toronto:
This unique exhibit is the method chosen by Weston’s to acquaint Exhibition visitors with the fact that they are now making, right here in Toronto, biscuits equal in every respect to the finest imported English lines – the standard of the world. English master bakers and English making machines have been installed at Weston’s new English Biscuit Factory, and the great opportunity of these English lines is proven by the fact that a 24 hour day production has been maintained for several weeks past.
The company also produced a sampler tin of the new biscuits that sold very well. Weston's English Quality Biscuits proved a long-term success and the product line became the basis for the company's continued growth.
Expansion
With the death of George Weston in 1924, W. Garfield Weston became president of George Weston Limited at the age of 26. Garfield, who had effectively been running the company the past several years, set the firm on a path of expansion. In 1928, he took the company ‘public’ and made his first major acquisition – William Paterson Ltd., a Brantford, Ontario, biscuit and confectionery maker founded in 1863 by William Paterson.
The company also made its first foray into the American market but the effort ended in near disaster. A Weston's English Quality Biscuits factory was set up at Watertown, near Boston, Massachusetts, but after a series of missteps, that included a botched advertising campaign, the plant was closed. It was later realized that a senior manager had secretly been working for the competition. The American company was subsequently reorganized and a new biscuit plant established near Passaic, New Jersey.
Depression
In spite of the Great Depression, George Weston Limited continued to expand in Ontario and Western Canada. The company bought Lawlor's Bread Limited of Toronto for over a quarter million dollars in 1930. It went on to acquire Regal Bakeries Limited in Ontario in 1931, Independent Biscuit Co. of Calgary that same year, and Lawrence Bread Limited in 1933.
As the Depression deepened and George Weston Limited remained profitable, it bought companies and operations under favourable terms. In 1933, for example, it extended its service area to 100 miles around Toronto with the acquisition of Ontario Bakeries Limited from its trustee and receiver:
In this case, as in nearly every case where the company or its subsidiaries have taken in other plants, the company was able to take advantage of the extraordinary low price obtaining for capital assets during the depression, to expand its business at very low cost to itself and on purchase terms that are scarcely more than rental.
The company went on to acquire McCormick's Limited from its receivers in 1937 and bought Inter City Western Bakeries in 1938. In the United States, it expanded biscuit operations at Passaic, New Jersey, and established a new Weston's Biscuits plant at Battle Creek, Michigan. One long-time Weston executive, Frank Riddell, observed that since nobody had any money in those days that deals were often struck with relatively little cash and a guarantee of Weston stock. In addition to a program of expansion, the profitability of George Weston Limited allowed it to establish a minimum weekly wage for its male employees in 1934.
Great Britain
The early 1930s saw Garfield Weston pursue an ambitious overseas venture designed not only to extend the commercial interests of the company but also expand desperately needed export markets for Canadian wheat. Weston proposed to acquire bakeries throughout the British Isles that would then import more Canadian grain. Turned down by the banks at home, which considered the idea too risky, Weston arranged a meeting with a group of New York financiers. Among them was Wall Street speculator Ben Smith who bankrolled Weston to the tune of $2 million.
In 1933, George Weston Limited acquired Scottish biscuit maker Mitchell & Muil Limited. The antiquated factory at Aberdeen was shut down and production moved to a new facility at Edinburgh. With modern equipment and facilities, along with a reduced product line of 40 items instead of 400, Garfield Weston dramatically lowered costs and began selling biscuits at half the price of the competition. Other bakeries followed, as Weston quickly acquired a string of bread and biscuits factories, as the overseas business began to rival that of the parent:
All the British and Irish biscuit and bread companies obtained in the last 15 months in the course of Garfield Weston's large-scale British adventure are now reported to have a total volume of sales as great as that of the parent company in Canada, George Weston Ltd. Moreover, Mr. Weston told the shareholders at the annual meeting on March 28 that when plans at present under way are complete, he will have bread and biscuit companies in every strategic centre of England, Scotland, Northern and Southern Ireland.
Later that year, with operations still expanding, George Weston Limited offered its shareholders direct ownership in the overseas venture in a rights issue that transformed the British business into a separate commercial entity. By 1937, with fifteen regional bakeries under the Allied Bakeries banner and the success of the British Isles expansion evident, news headlines back home in Canada hailed Garfield Weston as "Britain’s biggest baker."
World War II
During World War II, George Weston Limited struggled to maintain production in light of shortages that included basic ingredients such as sugar. Cakes were still made but at times without icing. Labour was also in short supply and salesmen at times served as bakery workers. With most of its biscuit production going to supply the armed forces of Canada and the Allied Powers, the company ran newspaper ads advising customers that Weston products may not always be available:
We regret being unable to supply your grocer regularly with Weston's English Quality Biscuits. Our factories are working at top speed to help supply the biscuit needs of the armed forces of the United Nations. Even the ovens that bake the famous Weston's Soda Biscuits are now turning out "Iron Rations" for our fighting men.
Another wartime ad noted that the company's products were with the 8th Army of the North African campaign. "Those fighting lads who drove Rommel out of Egypt and Libya have been getting Weston's English Quality Biscuits right along. Naturally, we're proud of their choice!". In spite of the war, the company continued to expand. In the United States, it purchased a bankrupt biscuit plant at Salamanca, New York, and acquired the Southern Biscuit Co. of Richmond, Virginia. The National Biscuit Co. in Western Canada was bought, along with Edmonton City Bakery. By 1942, the company reported that Weston operations in Canada, the United States and Great Britain used over 15 million bushels of wheat a year and employed some 16 thousand workers.
The war years also saw the company diversify beyond baking with the purchase of a controlling interest in Western Grocers Ltd., a wholesale food distributor with some 700 associated Red & White stores throughout the prairies. In 1943, Garfield Weston also bought paper manufacturer E.B. Eddy Co. of Hull, Quebec, after he purchased controlling interest from Lord R.B. Bennett, the Canadian former Prime Minister. Some years later, Eddy Paper Co., along with subsidiary E.B. Eddy Co., was bought out by George Weston Limited in a cash and stock deal.
Post-war
The post-war years saw tremendous growth as the company continued to diversify its holdings not only in terms of consumer products but also with a concerted move into retailing. In 1948, the company bought William Neilson Limited of Toronto, Ontario, Canada's largest chocolate and ice cream maker. A year earlier, Garfield Weston struck a deal to acquire a block of 100,000 shares of Loblaw Groceterias Co. Limited, one of the country's leading supermarket chains By 1953, George Weston Limited had established majority control. Three years later, the company announced it had purchased a 25 percent stake in Chicago-based National Tea Co., a large U.S. supermarket chain with more than 700 stores. By the early 1960s, it had gained controlling interest in National through subsidiary Loblaw Companies Limited. In 1966, Howardsgate Holdings, owners of Britain and Europe's largest operator of supermarkets, Fine Fare, was purchased from another Weston family business, DICOA, before being sold back to Associated British Foods.
Diversification and disclosure
During the 1960s, the company continued to diversify beyond baking. Along with the 1962 acquisition of Eddy Paper Co., George Weston Limited moved into fish processing on the East and West coasts with its purchase of Connors Brothers of New Brunswick and British Columbia Packers Limited. With the full extent of the company's holdings often unknown by even senior executives, not to mention the public, George Weston Limited was under increasing pressure from Canadian parliamentarians to reveal its corporate structure and holdings. In December 1966, it provided shareholders and the media with a detailed chart showing various subsidiaries, wholly owned and controlled. The Financial Post newspaper led with headlines that read, "Weston group unveils huge empire" and reported on how 150 Weston led companies accounted for $800 million in assets and produced $2.8 billion in annual sales. While the extent of the "Weston empire" became the lead business story, it apparently resulted in little or no negative reaction in terms of press coverage. Some months later, in fact, one news story went so far as to feature the headline, "Garfield Weston: Our champ at corporate empire-building."
Consolidation
By the late early 1970s, the company's aggressive expansion and acquisitions strategy, which in the past had produced such remarkable growth, was showing signs of strain. Retail sales and earnings were in decline as Loblaws’ aging chain of supermarkets looked increasingly uncompetitive. In 1972, Garfield Weston, Chairman of George Weston Limited, named his youngest son, W. Galen Weston, Chief Executive Officer of Loblaw Companies Limited. The appointment came at a time when Loblaws appeared all but bankrupt, with its share of the crucial Ontario market cut in half as a result of price wars among the major chains. At the same time, the company found its hands tied by leaseback agreements that prevented it from closing money-losing stores. With few assets, Loblaw was also deeply in debt. In spite of all the problems, though, Galen Weston felt that Loblaws had the potential to be the nucleus of one of the finest retailers in Canada. "As a 200 store chain, we didn’t look very good. As a 100 store chain, Loblaws looked very good indeed."
Leaseback agreements were bought out and the company began closing unprofitable stores. Old warehouse operations were shut down and a new distribution centre built. The company also initiated a broad marketing strategy that saw a prototype store renovated and remodelled in new colours and a new Loblaws logo. Toronto designer Don Watt introduced new wood panelling, big moveable display bins, and huge photos of fresh fruits, vegetables, and meats. The produce section was doubled in size and moved to the front of the store. Sales dramatically increased and more stores were remodelled and rebranded. Meanwhile, a new advertising campaign featured Canadian actor William Shatner of Star Trek fame, who told television audiences to "Come on over to Loblaws" and "More than the price is right... but by gosh the price is right." In 1974, W. Galen Weston was appointed Chairman and Managing Director of George Weston Limited, and subsequently company President.
But as Loblaws regained market share, profitability south of the border, at National Tea Co., deteriorated. A similar program of rationalization saw hundreds of National stores closed and warehouses consolidated, while other outlets underwent renovation and rebranding. By 1974, of 1,100 retail food outlets across North America, 367 stores were closed, while 81 new stores had been built. Unprofitable divisions, namely Chicago, Syracuse and California, were sold. Although some supermarket assets were later acquired, eventually the company would divest itself of all retail and wholesale holdings in the United States.
From Wikipedia’s article on George Weston Limited, shared under CC BY-SA 4.0.5