On this day in economic and business history…
General Mills, Inc. (NYSE:GIS) was formed on June 20, 1928 as a vehicle for the merger of successful Minnesota milling company Washburn-Crosby with more than two dozen smaller mills.
While originally a flour mill, Washburn-Crosby (and then General Mills) had shifted toward producing more finished consumer products, particularly cereal and baking mixes. As it entered its first full year of operation, General Mills had roughly $26 million in market capitalization and a total flour-milling capacity of 88,000 barrels per day across its 21 mills. Two years later, General Mills, Inc. (NYSE:GIS) rolled out two of its earliest brands: Bisquick and the “Betty Crocker” coupon offerings that customers used for discounts on products featured in the catalog of the same name. Wheaties would follow with its “Breakfast of Champions” slogan in 1933.
The company continued to develop new consumer products throughout the postwar period, and it also began expanding into new categories, including some that had nothing to do with cereal or baked goods. In 1968, General Mills acquired Parker Brothers and remained the toymaker’s owner until 1987, during which time it developed the Nerf line of soft toys and became a major developer of early console video games. General Mills is also largely responsible for the growth of Darden Restaurants, Inc. (NYSE:DRI). Darden was a mere five-restaurant chain of Red Lobsters when General Mills, Inc. (NYSE:GIS) bought it out in 1970. By the time it was spun off as an independent company in 1995, Darden had grown to 1,250 locations across the United States and Canada. Many of these were Olive Gardens, which had taken off since its creation in 1982 to become the largest Italian sit-down chain in the country.
Throughout this time frame, one of General Mills’ fiercest competitors also grew and diversified. Pillsbury, another Minnesota-based food company with milling origins, was already firmly established in baked goods by the by the time its Doughboy mascot debuted in 1965. It acquired Burger King Worldwide Inc (NYSE:BKW) two years later, roughly paralleling General Mills, Inc. (NYSE:GIS)’s path through diversification. Burger King remained part of Pillsbury through the latter’s acquisition by Grand Metropolitan in 1989 until its divestiture in 2000. A year later, General Mills acquired Pillsbury but did not gain the latter’s baking products; those brands are part of The J.M. Smucker Company (NYSE:SJM) now.