In this success story, we are going to share with you the life story of Henry John Heinz, the founder of “The H. J. Heinz Company”. As a rule, biographies of many famous American entrepreneurs all look alike – they all have started from scratch, but thanks to the perseverance and enterprise ended up being millionaires. Today that is one of the largest food processing companies. For instance, six out of ten ketchup bottles consumed in the United States were produced by Heinz, while at the same time, the share of ketchup sales is about 30% of the total company sales. However, the company still produces a vast variety of other products as well.
High performance, ingenuity, and hard work are among the distinctive personality traits of Henry J. Heinz. However, not only these qualities helped him to become a successful entrepreneur – Henry was also very attentive to the product and employees of the company.
The ancestors of Henry Heinz lived in Germany and produced wine. His father John Henry Heinz was born in Germany. Thus, it is not a big surprise that his father spent his entire childhood in the vineyard. At the age of 19, John Heinz went into the military service, and when he returned, he decided to move to the United States of America. Relatives have never learned the true reasons for his relocation – Heinz family was not in poverty, so it is illogical to assume that Henry’s father decided to leave the country to get rich. Even though at those times it was the main reason for moving to the U.S., only Germans, whose relatives were already living there, dared to migrate. Nobody wanted to go to a foreign country, having no friends and acquaintances, as it was too risky. Nevertheless, John H. Heinz took that risk.
At the age of 21, John, along with other migrant families, settled in the stronghold of German emigrants in Pittsburgh, Pennsylvania. He decided to build a brickyard and started with the opening of a small business. This was also, where John met his love a conservative, hard-working, and a very religious woman. Her name was Anna Margaret Schmidt. At the age of 20, she moved to the United States from Hessen, Germany. At the time, German immigrants have traditionally always kept together; even marriages had to be contracted within the community. Anna and John got married and gave birth to six wonderful kids – the first-born was named Henry John Heinz.
Henry John Heinz was born on October 11, 1844. The boy grew up surrounded by the hardworking family and started gaining experience in the field of horticulture at a very young age. Mother always spoke to Henry in German, and he learned German pedantry, which remained one of his key qualities throughout life. When the boy turned 6 years old, he started to help around the house and garden. At the age of nine, Henry nailed the recipes of pickles and started selling homemade grated horseradish in the downtown of Pittsburgh. Even though many of his peers worked as hard as Henry, he realized that it also could be a good way to build a career. The rest of the children often worked to provide financial assistance to their parents only.
When Henry turned 10, the parents granted him 3,000 square meters of land, and in the age of 12, he was the owner of 12,000 squares meters of the land, which was perfect for growing vegetables on it. Gardening became the boy’s passion – he was spending hours and days in the garden, sparing no effort.
Sometime later, he started driving his crop to the local greengrocer who was selling vegetables and fruits to the residents of Pittsburgh. However, gradually, with German thoroughness, Henry expanded his own business – soon one could buy Heinz’s grated horseradish at the grocery. Its taste was already familiar to many locals, as Henry has always used his mother’s recipes.
At the time of Henry J. Heinz childhood, fooling the customers was a regular part of any business in the U.S. One of the local newspapers wrote, “In so-called horseradish, we can find more turnips and water-soaked wood sticks than the horseradish itself.” Therefore, to show an excellent quality of his product, Henry packed it in clear glass jars. Such transarency and a high quality of the product made a good impression on the customers, thus increasing the popularity of the grated horseradish Heinz offered.
When Henry J. Heinz had graduated from high school, his garden has grown to such an extent that he had to hire workers. Over 1861, when the Henry was just 17 years old, he earned a decent amount of money for those days – $ 2,400 (if translated into today’s money, you would get something around $ 43,000).
Henry’s mother, Anna Margaret Schmidt, always cheered and supported him in the case of failure; she knew how to comfort her son and instill confidence in him. She taught Henry communication skills. In addition, Anna Margaret Schmidt, being a very religious woman, sincerely hoped that her son would become a priest – she even brought him to the neighborhood Lutheran school. However, Henry was not interested in religious practice because he felt the compulsion to the figures and tables. This is the reason why he left the Lutheran school and decided to go through business training in one of top financial America’s colleges – Duff’s Mercantile College. Henry J. Heinz financed his education on his own, using the money collected from the sale of the vegetables from his garden. In college, Heinz learned how to keep records and accounting books – later, he was regularly taking notes and led a strict accounting of income and expenses of his business.
After graduating from Duff’s Mercantile College, Henry started working at the brickyard of his father. He learned all the intricacies of this business, made some minor changes in the production of bricks and, most important, got a tax refund from the taxpayers. Suddenly, the father realized that he was dependent on his son, who became an indispensable employee. Henry took care of all accounting paperwork with great enthusiasm, as his father, in his essence, was instead an artisan than a businessperson. Thus, in 1864, 20-year-old Henry was running a brick factory almost single-handed. Subsequently, he was even able to expand the production, while his father went to visit his relatives in Germany.
Meanwhile, the brickyard began to bring a decent income, and Heinz family soon was able to move from a tiny house to a villa built from the bricks produced by their factory.
Heinz & noble
Being an adult, Henry J. Heinz was still interested in the recipes of his mother, and he was constantly experimenting, trying to improve them. Heinz was always in search of new business ideas, and this time decided that the market of canned food is worth trying. In 1869, together with a friend and neighbor L. Clarence Noble he launched a company named Heinz & Noble. It provided restaurants and cafes with sauerkraut, grated horseradish, pickles, and other products. Henry knew that people did not particularly trust canned products due to the rapid poisoning cases, so he decided not to put the name of his company on the labels. First, he always sent a sample of his product with a fake label, and only then, if it succeeded, put his brand name on it.
The sale of prepackaged products was the right choice at that time. The steel-casting industry was well-developed in Pittsburg, and most of the men worked for 12 hours a day, thus having no time for cooking. They preferred to buy the food, which was ready for immediate consumption. More than 60 companies picked up this tendency and began to supply the market with various types of preserved products.
In the same year of 1869, he married Sarah Sloan Young. She was a first-generation American, whose family was Scotch – Irish, in the Methodist church he was attending. They fell in love and decided to marry, after getting the blessing of Henry’s mother. Later, Henry J. and Sarah Heinz had four children: three sons – Clarence, Clifford, Howard, and daughter Irene.
The company’s revenue reached a few thousand dollars in a year of its founding. To survive in the fierce competition, it was necessary not only to provide the consumers with high-quality products but also to make them more available. How could this goal be achieved? First, the production must be massive. Therefore, the Heinz house, which was left empty after the family had moved to the villa, was reorganized for production of Heinz & Noble in 1874. Henry hired several German homemakers who were engaged in washing and canning vegetables. Secondly, during the springtime, they concluded an agreement of purchasing the whole crop from the local farmers at a fixed price. In this way, they also saved much money since during adverse weather conditions in summer or autumn the cost of vegetables could increase significantly. In addition, Heinz & Noble purchased horses and vans to deliver the crop in advance; they also bought a factory for the production of vinegar in St. Louis, Missouri. The company has reached great success, and Henry became a wealthy entrepreneur, who could easily support his own family.
Things were going well, and young partners expected to have a considerable profit, but then something they could not predict happened – the harvest of cucumber broke all record numbers that year, so their company did not have enough working capital to cover the contracts with the farmers. Sure thing, they could get a loan in a bank, but in 1875, the U.S. financial crisis erupted, resulting in the entire banking system to be paralyzed. Farmers applied to the court, resulting in Heinz & Noble to find its place among the 5,000 bankrupt enterprises. All the property had to be sold in order to compensate for the losses of the farmers. Besides, The Pittsburgh Leader newspaper made fun of their business.
The collapse of the company and Its new breakthrough
After reading the malicious headline “Trio in a Pickle” in The Pittsburgh Leader, Clarence Noble said that he did not want to hear a word about any private business in general. As well as his business partner, Henry has experienced severe emotional stress, and it took him a very long time to recover. Christmas of 1875 was the worst one in his life, as he even could not afford to buy gifts to his children. Heinz has long remained depressed; he did not get out of bed for several months. At this challenging time, his kind and wise mother, who always knew how to support her son and instill the confidence into his heart, helped her beloved offspring to get back to life. She gave Henry all her savings so that he could give his business idea a second try.
Inspired Henry used the money wisely and registered Heinz Food Company to the names of his relatives (mother, cousin and brother John), continuing to produce and sell sauces and pickles. He was the head of the company, although he was not allowed to manage it by the law, as his mother owned most of the shares. The Heinz business became a family business. The relatives even conducted a board meeting in the kitchen during a family dinner. Henry walked on foot to his fields daily to check how the things were going. Only sometime after, when he had saved a little money, Henry J. Heinz was able to buy a horse, which was affordable because of its blindness.
The National American sauce
The situation of a 31-year-old businessman was not an easy one. He had to start even not from scratch but with reimbursement of his debts. Henry John Heinz worked hard, canning the jars on his own to pay off all the liabilities. “I am wearing brain and body out,” he wrote in his diary titled “Panic Times.”
Henry tried hard to mark the point, where he has made a mistake. Thinking about it, Henry J. Heinz decided that the critical error occurred in the process of growing vegetables. He concluded that The Heinz Food Company should have its own land to control an entire cycle of production, starting with growing of seedlings and ending with the delivery of canned vegetables into the trading network. This was the only way to ensure the product’s quality and to reduce the risk of failure caused by the weather conditions or economic crises. However, the business based on the principles of the natural economy would still fail in the cost of production comparing to the specialized enterprises. Therefore, he needed to focus on quality.
From Henry J. Heinz biography, we learned that initially, Henry tried to make mustard, but in early 1876, he mastered the production of tomato sauce, which was later called ketchup. Nowadays, there is a widespread legend which says that the Chinese condiment “ke-tsiap” (brine or sauce with canned fish) was a prototype of ketchup, which Heinz introduced to the world with the minor changes. The reality was different, as at that time tomato paste was already on the market. The customers avoided tomato paste, but not because they did not trust the quality of tomatoes (the time when tomatoes were considered poisonous, has already passed). That is because of the story of how in 1776 a Loyalist cook tried to poison George Washington with a dish made of tomatoes was known by every American, as they learned about it only in 1820.
Tomatoes were not considered poisonous anymore, but this applies only to the fresh fruit. Unripe and rotten tomatoes, which were used for tomato paste production, were still considered poisonous. Later it turned out that this was the truth as such tomatoes contained a powerful poison called solanine. At the same time, in Europe, the tomato sauce was widespread. The German botanical dictionary, published in 1811, stated, “Even though tomatoes are considered to be poisonous they are used for the production of sour sauce in Portugal and Bohemia.” Henry’s mother, who came from Bohemia, knew how to make a delicious tomato sauce and this was the recipe, which became a formula of the most popular ketchup brand of nowadays.
Tomato sauce made from fresh tomatoes grown by Heinz in the fields of Pennsylvania (so everyone could personally make sure that only the choicest tomatoes are used) was a great success. The ketchup more than delighted consumers, as it could improve the taste of a wide variety of products – from sausages to pasta.
It is interesting to know that in 1896, while riding a train in New York City, Henry J. Heinz saw an advertising sign that promoted 21 styles of shoes, which he thought was very clever. Although Heinz was manufacturing more than 60 products at the time, Henry thought 57 was his lucky number. Therefore, he began using the slogan “57 Varieties” in his all advertising campaigns. Today the company has more than 5,700 products around the world, but still uses the magic number of “57.”
Henry continued to expand the range of preserves, sauces, and marinades. Ketchup was followed by such products as sauces made of red and green peppers, chili, apple cider and dips, olives, pickled onions and cauliflower, baked beans and pickles.
Henry started to regain confidence after the bankruptcy he suffered. At the time of economic crisis, when Heinz owed a considerable amount of money to the Pittsburgh farmers and grocers, he promised that he would return them all to the last cent; although bankrupts didn’t have to do so. When his revenue increased significantly, honest and conscientious Henry gradually started to pay back his debts, and it took him five years to clear them all. Only after this, Henry Heinz became a legal owner of the company, moving its headquarters to Pittsburgh, Pennsylvania, United States.
Quality of production and motivation of employees
Henry tried to make the quality of his products as high as it was possible. To do so, he was organizing various systems controlling the quality, introduced new technologies, and continuously experimented with packaging. Henry J. Heinz believed that the way the bottle appearance was the most important in the product’s image. He noticed that the consumers were not trusting canned food in opaque jars. Henry decided that the customer should see what the product contains inside and started to use glass bottles for his ketchup. This package had its pros and cons. Of course, it demonstrated a beautiful red color of the sauce to the buyers and enhanced the credibility of the manufacturer. However, on the other hand, ketchup often darkened over time, giving the product an imperfect look. Resourceful Heinz figured out how to eliminate this drawback – he began to glue labels around the bottleneck.
Over time, the company expanded its size and increased a headcount, which created a new problem. In the summer of 1892, the employees of Carnegie Steel Company located in Pittsburgh, Pennsylvania, went on strike against mass dismissals from work. Ten people were killed during a fight with the security of the factory, and several dozens were injured. To end this conflict, the governor of Pennsylvania introduced military troops to the city.
Henry J. Heinz was shocked by this case, so he immediately started to improve working conditions on his factories. The workers of Heinz had a few breaks during a day; they also could take a bath after a working shift. All the women were given fresh aprons and bonnets, the ones who peeled the cucumbers were given a free manicure once a week. Besides, every factory worker had a free medical service guaranteed.
Heinz’s factory had a family atmosphere. It had its own groups of interest, and even a choir, so the work in this team was very prestigious, although Henry established stringent hygiene requirements. No other company producing food could compete with Heinz in sanitation. This applied not only to the factory but also to the cultivation of vegetables and fruit in the fields. Mainly, Henry John Heinz was the first businessman to master the production of organic foods. Moreover, Heinz never used chemical preservatives in his products. Also, he never considered other manufacturers to be his competitors in terms of quality; his main rivals have always been ordinary housewives.
Advertising the Heinz products
Henry J. Heinz steadily moved around the country, promoting the company’s products in the trains. He sincerely believed that the consumer has to try the product to buy it. Each Heinz store was supplied with “probes” – samples of products. Moreover, he even invented a special cardboard spoon that could immediately be thrown away after trying a product. Henry could make several trips from Pittsburgh to New York in a day, calling the traveling “a school of life.” He always made notes on his observations along the way.
In 1983, Heinz took part in The World’s Columbian Exposition in Chicago. He was given a booth on the third floor of the exhibition hall. The place was not the most convenient one – the visitors had no particular desire to climb to the third floor. To entice them, Henry came up with the following: he printed golden foil labels, the sign on which stated that this label could be exchanged for a free prize in a booth on the third floor, and spread them all over the place so that they caught the eye of the visitors. People fell for the trick – having a desire of getting a present, they walked up to the stairs. There, the very first thing they saw was a huge amount of cans and bottles of Heinz products put on a display in the form of a pyramid. Thanks to the ingenuity of Henry, his products have become the highlight of the program.
Neon advertising appeared in the United States at the beginning of the 20th century. Henry J. Heinz was the first among the companies acquiring neon advertising nationwide.
Business methods used by Heinz were giving excellent results, and of course, his rivals started to use them as well. Henry had to take some extreme measures. For example, Heinz was buying all the empty jars made of glass in the town, using the major part of them for his production. The rest was loaded on a barge and drowned in the river, so no one was able to use them.
The H. J. Heinz Company became a pure family business – many of Henry’s relatives worked in the company. He gradually taught his sons, and then they all took started working in his company (initially they began in sales, and then they moved to management). Even though Heinz treated his subordinates very politely, he could easily take all the necessary measures, if he saw that someone did not perform well. Once he even had to fire his brother John, when the results of its operations significantly deteriorated (he was constantly late and worked very slowly). For the sake of the company and its future prosperity, he had to make difficult decisions of this type. Any of his relatives was obliged to perform well as any of the other workers of the company and the fact that he was a member of the Heinz family was never taken into account.
In the winter of 1886, Henry J. Heinz agreed to go to Europe as his family asked him to. Arriving in London, Heinz immediately went to the procurement manager of Fortnum & Mason department store, who was the supplier of The British Royal Household and demonstrated the samples of his products. “I believe, Mr. Heinz, we’ll buy all of this,” the manager said. Thus, England became the first foreign market selling Heinz brand. After ten years, sales have grown to the level, which forced Heinz to open an office in London not far from the Tower of London. Following this, he built a factory and bought a large plot of land over there as well, which caused many Englishmen to believe that Heinz was a British company.
From that moment, Heinz products came into international trade, which was significant as those days American products were not widespread in Europe. The H. J. Heinz Company history and Henry John Heinz biography will long be studied as a great example of a successful business.
Sarah Heinz house
In 1898, Henry left the United States to visit his ancestors in Germany. He went on a trip with his wife Sarah Sloan Young Heinz, who had hoped to see a doctor in Europe in order to get rid of the chest pains. Since then, Heinz began to visit his ethnic homeland every year. The job of Henry J. Heinz obliged him to travel around the world regularly, but he always spent his holidays in Germany.
Soon, the Heinz family returned to the United States. Sarah’s condition did not improve after the journey – her chest pain only intensified. Henry’s wife started to fade gradually, and soon, at the age of 51, she passed away. After the death of his wife, Henry built a Sarah Heinz House in her memory. Today it is a youth center (it hosts a wide variety of entertainment and sports events). Henry never married again.
The First World War and lucky escape from Germany
Each year Henry J. Heinz used to spend a vacation at the fashionable resort “Bad Kissingen” in his native Germany. However, once, arriving there in the summer of 1914, Heinz did not have a chance to relax. Suddenly he was forbidden to leave his hotel room, as he was a citizen of the U.S. Later it turned out that thousands of German soldiers were mobilized in Bad Kissingen area those days. The First World War has just started. Henry barely escaped from Germany through Holland and never had a chance to go back. He even spoke up in favor of the Americans to take part in the war against the German Reich.
World War I caused many changes in the German communities of America. German newspapers went out of print in 1917, and German classes were reduced in schools and even it was even forbidden to speak German. For many immigrants, who did not know English, this was an actual disaster. In 1920, the situation was slightly improved; however, it was never restored. Heinz family stopped speaking German and cut all the connections with Germany.
At the age of 75, Henry did not even think to stop working. He still visited the factory regularly, watching the progress of his business. His grandchildren became his true happiness – he had eleven of them. They all loved to travel the world with Grandpa Henry. Journeys have always been his passion. He even opened a Heinz Pier in Atlantic City, New Jersey (being at a young age), to demonstrate Heinz food products and where he kept all the treasures of art and souvenirs brought from his trips. Henry John Heinz loved watches and canes in some unique way – there was a considerable amount of them stored in the exhibition hall. Additionally, the Heinz Pier provided demonstration kitchens with free cold and hot food samples. The pier, incidentally, was destroyed by a massive hurricane in 1944.
Henry J. Heinz suffered and died from pneumonia at the age of 74. His employees raised money and put up a monument, which can still be found in the main building of the company. Before dying, Henry asked to build a church in honor of his mother. Today, this church is located on the campus of Pittsburgh.
The heritage of Henry J. Heinz
After the death of Henry J. Heinz, his son Howard Heinz took over the management of the business. In his work, he continued to follow the main principle of the father: the company must implement an entire production cycle from its start to its finish. This allowed the company of Heinz to not only survive the Great Depression but also even to master the production of baby food and instant soups, which were in high demand during that rough time. Sales and imperial power of The H. J. Heinz Company grew day by day. Howard Heinz showed himself as a very competent manager, which could anticipate the desires of the market.
In 1941, H. J. “Jack” Heinz II, who was a grandson of its founder, headed the company. He earned a tremendous amount of money by supplying the army with Heinz products, but at the same time, he managed a broad expansion of their family business by building factories worldwide, including Portugal, Mexico, the Netherlands, Italy, and other countries.
Unfortunately, most of the new plants used purchased crops, so H. J. Heinz Company could not exclude, for instance, that they do not use herbicide in the cultivation of their vegetables or fruit anymore. This immediately became an advantage of the competitors.
Importantly, Henry John Heinz was the last representative of the family who headed the company. A hired manager became a CEO of Heinz, even though, of course, the Heinz family still had some influence since it was the largest shareholder. In February 2013, the company was bought for $ 28 billion by Berkshire Hathaway (belongs to Warren Buffett), together with its partner – 3G Capital (belongs to Brazilian billionaire Jorge Paulo Lemann). This deal became the largest one in the history of food brands.
Today, about 32,000 of employees (2012) work at Heinz factories worldwide. A company’s revenue was about $11.64 billion in 2012. Heinz ketchup is present in almost every second refrigerator on the planet. The current CEO of H. J. Heinz Company is Bernardo Vieira Hees, and he was assigned to this position on June 10, 2013.
Henry John Heinz once said, “As I did not become a priest, I have to find another way to do some good to mankind.” Today we can say that he surely achieved this goal in his life.
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