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Budget Strategy of Kraft Food

In: Business and Management

Submitted By megzevach0124
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Pages 24

A case study

Presented to






The company has its origin as National Dairy Products Corporation (National Dairy), formed on December 10, 1923, by Thomas H. McInnerney. The firm was initially set up to execute on a rollup strategy in the then fragmented United States ice cream industry. Through acquisitions it expanded into a full range of dairy products. By 1930 it was the largest dairy company in the United States and the world, exceeding Borden.

McInnerney operated the Hydrox Corporation, an ice cream company located in Chicago, Illinois. In 1923 he went to Wall Street to convince investment bankers there to finance his scheme for consolidating the United States ice cream industry. He initially found "hard sledding" with one banker saying the dairy industry "lacked dignity." He persevered and convinced a consortium including Goldman Sachs and Lehman Brothers to finance a rollup strategy.

As a result of his efforts, National Dairy Products Corporation was formed in 1923 in a merger of McInnerney's Hydrox with Rieck McJunkin Dairy Co of Pittsburgh, Pennsylvania. The resulting firm was then listed on the New York Stock Exchange with the offer of 125,000 shares having been

The firm grew quickly through a large number of acquisitions. As it is typical in a rollup strategy, acquisitions were primarily for stock in National Dairy rather than cash. National Dairy Products Corporation acquired more than 55 firms between 1923 and 1931, with a few notable entities among those:

|Year |Firm |Sector |Location |
|1924 |W.E. Hoffman...

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