CORPORATIONS: The Discontented Milkman

As every schoolboy knows, the Carnation Co. evaporates milk “from Contented Cows.” Thanks partly to this slogan, Carnation has become the U.S.’s third largest milkman,*and the biggest producer of evaporated milk in the world. But Carnation is never contented itself. Last week in Van Nuys, Calif., it showed off a milk-white, $1,000,000 research laboratory where Carnation researchers will try to find new ways to make cows more contented—and more productive.

Distant Pastures. Carnation’s devotion to research has already led it far from its original pasture. As one of the West’s biggest makers of animal feeds, its Albers Milling Co. Division sells a line of feeds for hogs, turkeys, chickens, mink and quail. It spent $1,000,000 to develop a dog food, Friskies, has rapidly branched out into cereals for humans, and soon may be making fertilizers and insecticides.

Carnation’s President Elbridge Hadley Stuart, 65, the son of Carnation’s founder, sees nothing incongruous in this. Says he: “If [we] somehow stumbled on a hair tonic, and it proved to be a good one, Carnation would sell it.” Stuart believes that such free-wheeling research is the best way to assure his company’s growth. “I get tired,” he says, “of hearing all this defeatist talk about how it is impossible for a company to continue to grow under this tax structure … All it takes to offset them is a little extra sweat, a little more guts, and quite a bit more brains.”

Stuart is firmly convinced that the future of Carnation’s evaporated-milk business, which provided roughly one-third of its $318 million gross last year, depends on steady advances in U.S. dairy methods. On Carnation Milk Farms, a 1,400-acre show place in Washington’s Snoqualmie Valley where Carnation has bred more prizewinning Holstein cows than any other U.S. breeder, only purebreds are allowed. Pride of Carnation’s Holsteins is Carnation Homestead Daisy Madcap, a prolific champion that last year smashed the North American record for butterfat production by yielding a whopping 1.511.8 Ibs. in 365 days. But Carnation is even prouder of a bull, Governor of Carnation, which has sired more cows capable of producing more than 1,000 Ibs. of butterfat a year than any other bull known.

Revolutionary Abroad. Carnation’s milk route already covers 115 countries, but Stuart is hustling to capture a bigger share of the world milk market. General Milk Co., a Carnation affiliate in which its competitor, Pet Milk Co., has a 35% interest, recently opened its second plant in Germany and will shortly open others in France and Holland, and possibly Brazil and Spain.

In going abroad, Carnation has greatly changed dairying in much of the world. In some areas, Carnation’s aid has boosted milk production as much as 400% in a few years, increased land values as much as 300%, and caused a drop in fresh-milk prices of as much as 500%. But Carnation has also run into some troublesome folklore. For example, in Africa and Asia, natives got the idea that drinking evaporated milk caused impotency. Not until World War II, when Australian and American soldiers conclusively proved this was not true, did the myth die.

Carnation’s expansion has paid off handsomely: except in 1933, sales have increased in every year since Stuart took over in 1932 from his father. Occasionally, however, Stuart is accused of being too venturesome: “People ask us sometimes why we continue to invest in plants in Europe when the possibility of war seems so great.” Stuart’s answer: “As long as we have money to invest, we’re better off spending it on brick and concrete and equipment . . . than we would be letting it draw interest in the bank.” And as long as Carnation continues to be discontented, he expects sales to keep on rising.

-After National Dairy Products Corp. and Borden Co.