Business: Betty Crocker Branches Out

“Why have the makers of Wheaties made an iron?” With this question, General Mills, Inc. last week trumpeted its formal entry into the home-appliance business. By January General Mills hopes to achieve full production (80,000 irons a month), full national distribution by spring.

Blessed by Betty Crocker (General Mills’s make-believe home economist, “sponsor” of Wheaties, Kix, Cheerios, Gold Medal flour, etc.), some 100,000 “Tru-Heat” irons had already gone on sale in the Midwest. Priced at $10.15, they were snapped up. With demand for almostj any iron at an alltime high, this was no guarantee that the Tru-Heat would pay off when there were more irons on the fire. But even established appliance makers admitted that the new-fangled Tru-Heat was a good buy.

Only Natural. As to why a miller was making irons, there were several answers. One was that, as a result of its wartime production of $29 million worth of gunsights, torpedo directors and other military gadgets, General Mills found itself with a new million-dollar plant that needed something to keep it going.

But General Mills’s interest in home appliances had another explanation: use of flour is gradually declining in the U.S. Besides, profits in flour-making are small (raw material accounts for 80 to 90% of the selling price). Milling one-sixth of all U.S. flour (twice as much as its nearest competitor) and processing one-fifth of all U.S. dry breakfast cereals, General Mills did a gross business of nearly $300 million last year. Yet, despite the best efforts of the Lone Ranger and Jack Armstrong, the All-American Boy, its net profit was only $7 million.

To boost profit margins, General Mills had long been looking for a chance to get into another kind of manufacturing. So when vice president Arthur D. Hyde, 44, research and mechanical divisions’ boss, came up with three likely looking products, General Mills jumped. Besides the new iron, Art Hyde designed a new kind of pressure saucepan and a new kind of automatic coffeemaker. The saucepan, ready for production, will go to market next.