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The Rival Company

 


Address:
800 E. 101st Terrace
Kansas City, Missouri 64131
U.S.A.

Telephone: (816) 943-4100
Fax: (816) 943-4123


Statistics:
Public Company
Incorporated: 1932
Employees: 3,000
Sales: $313.86 million (1996)
Stock Exchanges: NASDAQ
SICs: 3634 Electric Housewares & Fans; 3561 Pumps & Pumping Equipment; 6719 Holding Company


Company History:

The Rival Company is a leading manufacturer and marketer of small household and personal care appliances, as well as commercial and industrial fans and ventilation equipment. The company also manufactures a line of sump, well, and utility pumps. Rival became a household word in the early 1970s with the introduction of the Rival Crock Pot, a slow cooker that literally changed the way dinners were made for many people. Other items manufactured include can openers, meat slicers, grinders, toasters, ice cream makers, space heaters, ceiling fans, shower head massagers, humidifiers, air purifiers, and more. Rival products are sold under many brand names, including Rival, Rival Select, Simer, Pollenex, Patton, Fasco, Bionaire, and White Mountain.

The Founding in 1932

Rival was founded by Henry J. Talge in 1932. Talge was born in Russia in 1892 and moved to the Kansas City area in 1925, following sales jobs in Chicago, Detroit, New York, and St. Joseph, Missouri. Then called Rival Manufacturing Co. (a name carried through the early 1990s), the firm started as a specialty die cast operation. With eight employees, Talge set up his first factory at the former Hempey-Cooper building at the corner of Archibald and Pennsylvania in the Westport district of Kansas City.

Rival's first product was a manual citrus juicer, called the Juice-O-Mat. The "O-Mat" tag later become a trademark on many new product names, including the Can-O-Mat (can opener), Broil-O-Mat (broiler), and Ice-O-Mat (ice crusher). Talge saw a need for many products to make cooking and other food preparation procedures faster and easier.

The War Years

Like hundreds of manufacturers across the country, World War II completely halted production of all Rival products, and 100 percent of factory operations were switched to producing wartime products for three years. Rival began producing various tools for the aviation industry, but later switched to armaments. The company started making 13-pound practice aerial bomb castings for the U.S. Navy. Soon they were manufacturing 40,000 to 45,000 castings per month, and, during the war, made about 1.5 million for the Navy.

The company also produced 20mm shell fuses and 5-inch rocket heads. In the spring of 1942, Rival accepted a challenge to produce a special type of switch for the Navy. Each switch was made up of about 500 parts, each part small and precisely machined. Rival was proud of the fact that its rejection rate was extremely low, and, even for a period after the war, Rival continued to make three styles of the switch for the Navy.

Wartime production boosted employment to 350 at Rival's several factories in the Kansas City area. The Army-Navy "E" flag was displayed at these plants.

Postwar Growth

With World War II over, Rival re-introduced its various "O-Mat" products to a booming market. By 1945, Talge's son, Foster L. Talge, was general manager of the company at the young age of 34, and within four years he was president of the firm. Foster Talge expanded the product line, offering three types of wall can openers, five types of juicers, seven types of broilers, and two styles of ice crushers. Talge made an effort to hire former servicemen and started an apprentice program modeled after the Pratt and Whitney method.

In 1948, the company made its first major acquisition, purchasing Waverly Products, Inc., makers of the "Steam-O-Matic" irons. Waverly was in receivership at the time, but its irons were nonetheless extremely popular, with an estimated two million in use. Within a year, Rival had moved the manufacturing from Sandusky, Ohio, to Kansas City, leased a two-story manufacturing facility, and hired an additional 150 workers. The company had been producing 1,000 irons a day, but Talge ordered that boosted to 2,500 to meet demand.

By the end of the 1940s, total employment at Rival had reached 750, and the company continued to introduce new products, including a knife sharpener, called the "Knife-O-Mat." The Juice-O-Mat, developed 17 years prior, was still a major seller, with an estimated six million in use. Henry and Foster Talge both played a major role in designing and testing new products. Distribution was worldwide by this time.

1950s Bring Expansion, Innovations

The 1950s was a time of continued growth for the firm. In 1950, Rival of Canada began as an assembly operation in Montreal. In 1956, the company made another major acquisition, buying the National Slicing Machine Company, in White Plains, New York. Meat slicing and grinding became a major part of the product line offered by the company. A year later, Rival introduced the first electric can opener.

In the mid-1950s, the company opened a new manufacturing factory at 35th and Bennington in Kansas City on an 11-acre tract. That move allowed for future expansion, as well as consolidation of various warehouses, sales, and general offices scattered throughout the city. Within ten years, the company expanded the facility to about one-quarter million square feet under one roof, as the firm continued to introduce new products. Its product line now included the Shred-O-Mat, Steam-O-Mat, and Grind-O-Mat.

One of Rival's hallmarks was the vast majority of parts production done in-house, rather than being farmed out to smaller companies or to overseas operations. Rival's die casting operations included stamping, welding, screw machining, and polishing. The company received raw materials, including ingots of aluminum and zinc, as well as various sizes of steel, brass, copper, and bronze, and formed its products under one roof. All of the plating was done at the manufacturing facility, too. It was a triple-plating process, which called for the heated casting to be plated with copper, then nickel, then finally chromium. It was the largest plating operation in the Kansas City area.

The company also developed an electrostatic painting operation, which resulted in a more uniform and faster enameling of the products. The castings were electrically charged and put on a revolving disc while being coated with a thin layer of paint containing an opposite electrical charge. This created a fine paint mist that was attracted to the casting.

Talge Era Ends in the 1960s

In 1963, Henry and Foster Talge sold the company to Stern Bros. Investment Bank for $6.3 million. Foster remained with the company for a few years. By this time, sales had reached $12 million annually. Stern Bros. took the company public the next year. By 1967, Isidore H. (I.H.) Miller was president and another major plant expansion was in the works, this time totaling 115,000 square feet. Rival also had a 96,000-square-foot production facility in Sedalia, Missouri, about 80 miles east of Kansas City. The company also acquired the Titan Manufacturing Company in Buffalo, New York, makers of portable electric heaters. Production was moved to Sweet Springs, Missouri, as the company began to open plants in smaller cities in Missouri, where labor costs were not as high and where union activity was less of a factor. Sales reached $21 million for fiscal 1966.

Innovations continued, as in 1968, the company introduced the first "Click N' Clean" feature on its can openers, a removable cutting assembly designed for easy cleaning.

Introduction of the Crock Pot in 1971

Nearly every company seems to have one or two major milestones in its history; for Rival, that undoubtedly would be the introduction of the Crock Pot in 1971. The Crock Pot redefined how many Americans cooked their meals, and at the height of its phenomenal growth, the company reported receiving letters claiming saved marriages, meals salvaged, and inspirations of poetry--all due to this revolutionary method of cooking.

The origins of the Crock Pot were very much unheralded. Rival purchased Naxon Utilities Corp., a Chicago-based maker of sun lamps and portable laundry equipment in 1970. Naxon also had a product called the Bean Pot, a slow-cooking pot that could prepare a bean meal without anyone attending to it. Miller said the Bean Pot was almost an afterthought during the negotiations. "No one paid any attention to it," he told the Kansas City Times. "We almost forgot about it."

After the acquisition, Miller asked Rival's home economist to experiment with the product. She developed an entire recipe book of dishes, with and without beans, that could be used to produce gourmet meals. The cooker's casing was redesigned to give it a dressy look, and it was renamed the Crock Pot. The Crock Pot made its debut at the National Housewares Show in Chicago in 1971, and it retailed for about $25.00.

Sales skyrocketed in the first few years. The Crock Pot posted sales of $2 million in its first year, leaping to $10 million in 1972, doubling to $23 million in the next year, totaling $57 million in 1974, and topping at $93 million in 1975. Like any buying craze that takes over the country, sellouts were common at retail stores. One retailer planned a major promotion of the Crock Pot, but canceled all advertising after its employees bought every Crock Pot prior to the store's opening.

The Crock Pot Roller Coaster

It has been said, "What goes up, must come down." But for Rival, the Crock Pot's descent was more like a plummet. Any item that goes from $2 million to $93 million in sales in a mere four years requires major retooling, and Rival turned to a Japanese manufacturer to help produce Crock Pots under the Rival label. Soon the foreign market was flooded with Crock Pot clones, however, and sales suffered dramatically.

In 1976 sales fell to $78 million and, a year later, sunk to $32 million. "We were living in anxiety on the way up and on the way down," Miller told the Kansas City Times. "We never knew how low sales would go." Two plants had to be closed, and the firm cut back on its import orders. The only consolation for Rival was that its competitors were also suffering from slack orders, and many went out of business. At its heyday, there were 40 manufacturers of the slow cooker. By the early 1980s, Miller said there was no import competition and only a handful of domestic manufacturers. Yet, when the roller coaster ride was over, the Crock Pot still emerged as Rival's leading sales product, responsible for about one-third of the company's sales. It surpassed the can opener, which had been the leading product.

Rival's total sales reached $126 million in 1975, the peak year for the Crock Pot, and fell to $73 million only three years later. But the company remained profitable throughout and, guided by Miller's austere financial controls, did not undergo the growth pains most companies experience with such huge sales. "We didn't allow the kind of expansion we thought we would regret at a later point," Miller said. "That allowed us to handle the downturn in an orderly fashion."

By the mid-1970s, Rival had six manufacturing facilities, all in Missouri except for a pottery plant in Jackson, Mississippi, which manufactured stoneware for the Crock Pot. The company continued to move all its manufacturing out of Kansas City to other towns and, in 1976, transferred the last of 80 die cast operators to Sedalia. This left only 50 workers in the shipping and receiving area in Kansas City and about 200 corporate employees at the company's headquarters.

Company Goes Private in 1986

With the Crock Pot frenzy over, the company began to build sales during the 1980s. It introduced different styles of the Crock Pot and, in 1987, brought out the Potpourri Crock, which allowed users to heat spices while using the cooker to produce various aromas. It also reintroduced a deep fryer, an item it had not produced in 20 years, as well as air fresheners, a convection oven, and new types of can openers.

In 1986, the company went private. The New York investment firm of Gibbons, Green, van Amerongen arranged for the company to borrow money to buy back all of its stock. This leveraged buyout lasted only six years, as by 1992, the firm again became a publicly traded company. During its years as a private firm, Rival introduced the electric Crock Grill, the Rival Cookie Factory, and bought the Richmond Cedar Works, one of its principal competitors in the ice cream freezer market.

Period of Acquisitions in the 1990s

The 1990s was an era of acquisitions for Rival, as well as a time of diversification. For more than six decades a manufacturer of kitchen and household items, the company began to expand into the industrial and commercial sector. These acquisitions came under the direction of Thomas K. Manning, who was appointed CEO in 1989 after 16 years with the firm.

In 1992, the company acquired the Simer Pump Company from the Marley Co. Simer was a leading manufacturer in sump, well, and utility pumps for the "Do It Yourself" market. The $9.5 million purchase could not have been better timed, as the summer of 1993 brought heavy rains and flooding throughout the Midwest, and Simer pumps were heavily in demand for the draining of flooded basements.

Next on the acquisition list was Chicago-based Pollenex Corp., maker of air cleaners, hand-held massagers, and shower heads. The purchase price was reported at $18 million. Rival also expanded its overseas presence by entering a joint distributing agreement with Kenwood Appliance Limited, a firm based in England. Under the agreement, Rival created a line called Rival Select, which included the top line of its products, and Kenwood did likewise. These products were then marketed to more upscale retailers.

In 1994, the company added White Mountain Freezers to its product chain. The ice cream freezers made by this 150-year-old company complimented Rival's line of ice cream makers. These various acquisitions helped open channels to the hardware/home center stores and other department stores.

The company's biggest acquisitions, however, were yet to come. During a 12-month period in 1995-1996, the company made three large purchases with combined sales of $140 million. First, Rival acquired Patton Electric Company, Inc., based in New Haven, Indiana. The firm made space heaters and fans sold in the retail and industrial markets. Shortly after that, Rival purchased Fasco Consumer Products, manufacturers of heating, ventilating, and other products for the industrial and retail markets. Later, Rival bought Bionaire, Inc., a Canadian corporation that manufactured and distributed high quality portable air purifiers and humidifiers.

The many acquisitions of the 1990s were reflected in the company's strong growth in revenues. In 1992, the firm reported sales at $163.5 million. In 1994, sales increased to $229.23 million, and in 1996, grew to $313.86 million. The company reported to shareholders that fiscal 1997 sales would be at about the $400 million level. It offered more than 275 varieties of products that heat, cool, cook, steam, sharpen, clean, purify, toast, dry, slice, crush, and whip. Rival remained a leader in slow cookers (Crock Pot), meat slicers, heaters, and can openers.

Rival's move toward diversification has opened up new distribution channels in the United States and abroad. Although the firm has gone through the difficulty of integrating all of its acquisitions into a common system, the company expects to see the dividends pay off in the long run. It is clearly trying to position itself so that it no longer has to rely on any single class of the retail market for its financial strength.

Principal Subsidiaries: RC Acquisitions, Inc.





Further Reading:


"Big Rival Plant Unit," Kansas City Star, September 8, 1963.
Hendricks, Mike, "KC Is Home to the Crock Pot King," Kansas City Star, September 24, 1991, p. E64.
"Highlight of Company History," The Rival Co., 1996.
Johnson, Roxane, "Rival Rides Herd on Crock Pot Craze," Kansas City Times, November 9, 1981, p. D1.
"Major Addition for Rival Mfg. Co.," Kansas City Star, January 29, 1967.
Reeves, Gregory S., "Henry J. Talge, 98, Philanthropist and Businessman, Dies," Kansas City Star, August 21, 1990, p. A1.
"Rival Manufacturing Co.," Kansas City Star, December 23, 1945.
"Rival Manufacturing Co.," Kansas City Times, September 3, 1948.
"Rival Manufacturing Iron Unit," Kansas City Star, January 30, 1949.
Rosenberg, Martin, "Shrewd Acquisitions Help Make Crock Pot Company Hot," Kansas City Star, September 27, 1994, p. E13.

Source: International Directory of Company Histories, Vol. 19. St. James Press, 1998.




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