THE QUAKER OAT
THE RISE TO BIG BUSINESS
BY: COURTNEY SMITH
THE QUAKER OATS COMPANY AND THE PATH TO
• New Product Development
• Horizontal Integration
• Economies of Scale
• Forward Vertical Integration
• Overseas Expansion
NEW PRODUCT DEVELOPMENT
• Ferdinand Schumacher was the first to
introduce steel-cut oats to the American
• Established the German Mills American
Oatmeal Factory in Akron, Ohio in 1856
• German and Irish immigrants were his
only customers in the beginning.
• Canadian Robert Stuart began a large
mill in Cedar Rapids, Iowa in 1873.
• He financed an expanded building in
Chicago and, under the same label,
established markets throughout the
Midwest, but avoided areas that
Crowell and Schumacher’s companies
AND EVEN MORE COMPETITION…
• Henry Parsons Crowell purchased the
Quaker Mill in Ravenna, Ohio in 1881.
• He gave his oats the Quaker name,
which had been trademarked by
former owners Henry Seymour and
William Heston in 1877 as the first
• Henry Crowell advertised in German,
Irish, and Scottish newspapers to get
ahead in the industry.
• Crowell and Stuart combined their
companies in 1885
• Schumacher finally joined when his
largest mill burned to the ground.
• Together they formed the Consolidated
• The Consolidated Oatmeal Company
collapsed under financial and legal
trouble in 1888.
• Soon after in 1888, 4 more leading to 7
of the largest American oat millers
united as the American Cereal
• Under the American Cereal Company
name, production was doubled and costs
of production were cut in 1890 by taking
the production operations to the 2 largest
mills in Cedar Rapids and Akron.
• This helped the company survive the
depression of the 1890s, as well.
• In 1899, Stuart and...
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