CORPORATIONS: Almost Like Wine

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In 1945 Kaplan bought control of Welch's. But to expand the industry he first had to expand grape acreage. Throughout the Depression Concord grape growers (average holding: ten acres) had been ripping out their slow-growing vines to make room for more profitable crops. To ensure them a stable, long-term market for grapes, Kaplan entered into a partnership agreement unparalleled in U.S. agriculture. In addition to a minimum guaranteed advance price for their grapes, he promised to return to growers, on a per-ton basis, all Welch's profits after Kaplan's slice (10% of net sales) had been deducted by the company. Since 1952 Kaplan has even turned over his own profits to the growers' fund, thus enabling the growers to raise their $15 million down payment for the company at no cost to themselves. With a stable market for their crops and a stake in the ultimate profits, the farmers have reversed the 15-year decline in grape acreage, pushed production per acre from one to 3.3 tons, and swelled membership in the cooperative fivefold in ten years. Under Kaplan's canny management, Welch's has branched into frozen grape juice, expanded sales of jellies, tomato juice and other side lines, boosted sales nearly 300%. Last week as Kaplan, now 62, planned to step aside, the lips that touch Welch's promised to drain a record $40 million worth of the company's products in 1956. One reason for the increase: after fourscore unfermented years, Welch's is now also making wine.

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