Beech-Nut has been the mainstay here as other, smaller businesses in Canajoharie have moved on or closed up. The revenue to repay it will have to come from the remaining taxable buildings in the village. With Beech-Nut gone, the next largest employer in the village will be the candy maker across the street, Richardson Brands Co. Even those jobs are threatened by Beech-Nut's move; the Richardson factory relies on steam generated from the Beech-Nut factory to cook candy and heat the building, a legacy of when Beech-Nut made Life Savers in the nearby building.
Richardson's president, Don Butte, said the company wants to stay in Canajoharie but is waiting for help from the state. Similarly, the village is looking for help paying down its water and sewer debt. The company and the town are waiting on word from the state whether they will receive financial help.
Erin Duggan, who speaks for Gov. David Paterson, said in an e-mail that the administration will continue to work on financial assistance plans for the village and Richardson. Duggan said the village plan could include restructuring of the water and sewer debt to lower payment costs.
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Community Rules apply to all content you upload or otherwise submit to this site. Ad Choices. Stores and restaurants were so packed with Beech-Nut workers on staggered lunch breaks. Baby food was at the heart of all that prosperity. The manufacturing process sent a sweet fruit scent through the entire community, as the company continued to tinker with its formulas.
In a line of baby food was introduced with no added salt. Twenty years later, it removed refined sugar from its products and in , introduced a line with essential fatty acids.
A week later a violent flood battered Canajoharie and the Beech-Nut plant, which was built on and year flood plains. Cleanup took a month and production resumed. A year later, the company announced it would move manufacturing and its employees to a different site at the Montgomery County Florida Business Park where jobs would be created.
The old plant was abandoned and taxes increased significantly for Canajoharie residents as the village suffered the loss of 75 percent of its water and sewer budgets, along with 10 percent of the general fund. Beech-Nut had been the largest user of the Canajoharie Wastewater Treatment Plant, which was expanded in the s to keep Beech-Nut in the village.
Instead of tearing down 30 percent of the facility and developing 70 percent as promised, company owner Todd Clifford and TD stripped the former Beech-Nut plant of valuable materials and left it to rot. The plant then sat for three additional years by its lonesome self — an eye-sore and sore-spot at the village center — with the owner failing to pay property taxes. In , Montgomery County officials announced plans for foreclosure and took over the next year.
Feasibility studies determined that while remediation of the crumbling factory might be possible, the process would not be fast, cheap or easy. Montgomery County took ownership of the former factory, forming a committee of stakeholders that would regularly meet to discuss and implement plans for remediation. A parent could avoid filling a separate bottle by screwing a nipple directly onto the jar.
Beech-Nut's apple juice sales quadrupled as the result of the new packaging and Nicholas's "Mr. In spite of sales increases, a lack of capital prevented Nicholas from extending his marketing and advertising program and the company could not recoup its losses. Hoyvald, a native of Denmark who had relocated to the United States in the early s, already had a reputation for his ability to turn around troubled food companies. In , the company launched a new line of baby foods called "Stages," which used color-coded packaging to identify the age at which babies could start eating each type of food.
Although appearances suggested that Beech-Nut had turned the corner on its lean years, the company in fact was deeply embroiled in one of the worst scandals in American business history. Back in , when Frank Nicholas had been touring the country promoting the nutritional quality of the Beech-Nut brands and apple juice sales had quadrupled, the company signed a contract with a new apple concentrate supplier called Universal Juice Co.
Initial tests of the concentrate by Beech-Nut research scientists raised the possibility that it might be adulterated with corn syrup, but company executives, including head of operations John F.
Lavery, chose to turn a blind eye to the possibility of a problem with the product's quality. With up to 30 percent of Beech-Nut's sales accounted for by products containing the concentrate, the already struggling company was saving millions of dollars by using Universal and a switch to another supplier could well have tipped the scales toward insolvency. Lacking a definitive test for the purity of apple juice, however, LiCari could not prove absolutely that the juice was tainted, and without this proof Lavery and company president Hoyvald refused to take action.
In April , that proof came in the form of a private investigator, Andrew Rosenzweig, who had been hired by the Apple Processors Trade Association to investigate claims of adulterated concentrate. Rosenzweig had staked out the processing plant where Universal claimed to produce their concentrate and found that the company was not just adding sweeteners to their mix, they were failing to add the apples altogether. Documents found in the plant's dumpsters revealed that the so-called apple juice was in fact nothing but water, sugars, flavoring, and coloring.
According to the New York Times, Rosenzweig tracked a trailer truck full of the bogus concentrate from the Universal plant to Beech-Nut's facilities in Canajoharie and confronted Beech-Nut management with his findings. It was at this point that Beech-Nut committed "a grave tactical error," as an attorney close to the case was later to tell Business Week.
Instead of immediately recalling all of the products made from the synthetic concentrate, a recall that would have involved some , cases of inventory and might possibly have bankrupted the company, Beech-Nut began shipping the tainted juice out of the country clandestinely. Meanwhile, Beech-Nut lawyers stalled U. Food and Drug Administration investigators, who were asking for samples of the suspect product.
It was October before fed-up FDA officials threatened a seizure unless the company issued a voluntary recall. Beech-Nut finally issued the recall in November , but by that time all but 20, cases of the juice had been distributed overseas. FDA investigators initiated an investigation into Beech-Nut's role in the sale of the phony juice and of the cover-up. In November , a federal grand jury found that there was sufficient evidence to indict both Beech-Nut as a corporate entity as well as its two top executives, John Lavery and Neils Hoyvald, on counts of violating the Federal Food, Drug, and Cosmetic Act for selling adulterated apple products.
Lavery and Hoyvald both pleaded not guilty but were convicted for their involvement in what the judge in the case would call "the largest consumer fraud case ever. Ironically, the recall of the phony apple juice in never created the bad press for Beech-Nut that Hoyvald had so feared.
Apple juice sales continued to grow during the four years of the FDA investigation. It was only after the indictments of the company in , long after all bogus juice had been removed from grocery store shelves, that the scandal began to impact sales. The intense publicity that surrounded the trial and sentencing, however, was disastrous for the company. Market share dropped from more than 20 percent in early to 16 percent in Most of this drop was the result of plummeting apple juice sales, which fell about 20 percent within a few months of the indictment.
Beech-Nut quickly undertook a new promotional campaign that stressed the quality of the Stages line of baby food and was designed to appeal to the increasing number of older first-time mothers. All baby food manufacturers had long since followed Beech-Nut's lead in removing salt and artificial flavors from their products. Now Beech-Nut became the first major firm to purge their food of the modified starch that had long been responsible for the creamy consistency of most baby food.
The company spent millions trying to recapture consumer confidence, urging mothers to read the labels of their products and compare them with their competitors.
By , Beech-Nut had succeeded in regaining some of its lost market share, but the cost of the campaign virtually wiped out profit margins, according to industry analysts. In September , Ralston Purina Co. Ralston Purina, better known as a pet food manufacturer, had a small but growing line of human food products, including Chex and Cookie Crisp cereals, and felt it was getting a bargain with the tarnished but still viable Beech-Nut. Ralston Purina continued to promote the Beech-Nut brand for its purity and in became the first major manufacturer to launch an organic line of products.
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