Jel Sert Company

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Jel Sert Company

Route 59 and Conde Street
West Chicago, Illinois 60185
U.S.A.
Telephone: (630) 231-7590
Toll Free: (800) 323-2592
Fax: (630) 231-3993
Web site: http://www.jelsert.com

Private Company
Incorporated: 1926
Employees: 600 (2005)
Sales: $187 million (2005 est.)
NAIC: 311412 Frozen Specialty Food Manufacturing; 311930 Flavoring Syrup and Concentrate Manufacturing; 311942 Spice and Extract Manufacturing; 311999 All Other Miscellaneous Food Manufacturing; 312111 Soft Drink Manufacturing

The Jel Sert Company is a leading manufacturer of freezer pops, drink mixes, pudding mixes, fruit drinks, and other food products. The company is based in West Chicago, Illinois, where it produces the vast majority of its products. The company's manufacturing facility adheres to the same sanitary standards used by the pharmaceutical industry, and is inspected regularly by the American Institute of Baking. During the early twenty-first century, Jel Sert remained in the ownership of the family that started the company in 1926.

EARLY YEARS: 1926–49

Jel Sert's roots stretch back to the early 1920s, when Charles T. Wegner, Jr., an employee with Cracker Jack, began learning about the properties of gelatin, which the company used to make marshmallows. Wegner married Lillian "Wick" Hanke, a native of Chicago's west side, in 1922. By 1926 the couple had moved from their first home in Austin, Illinois, to a location in Oak Park, Illinois, and Wegner had decided to go into business for himself with Lillian's help, and initial funding provided by their parents.

The new enterprise was given the name Jel Sert, drawn from the words jelly and dessert. Operations began in a small Chicago facility on Lake Street. According to an article by Philip Hampson in the June 16, 1956, Chicago Tribune, "Mr. and Mrs. Wegner for some time had a combined weekly salary of $75. There were only five others on the payroll, including one salesman, in the early days. In that period Mrs. Wegner herself was a part of the 'sales force.' One of her duties was to demonstrate the company's desserts to hotels and institutions." While Lillian Wegner did her part, Charles concentrated on quality control and standardization in Jel Sert's laboratory, and also oversaw the company's manufacturing operations.

The stock market crash on October 29, 1929, ushered in the Great Depression, wreaking havoc on new and established businesses alike. However, Jel Sert was able to prosper during this difficult period in U.S. history because its products, which cost between 5 and 10 cents each, were within reach of virtually everyone. It was in 1929 that the company rolled out its Flavor Aid line of powdered soft drink mixes, capitalizing on the popularity of this type of product that had emerged earlier in the decade.

Jel Sert experienced growth during the 1930s and soon relocated its operations to a larger plant on 1020 South Central Park Avenue. The company's success was due in part to the Wegners' fiscal responsibility, as the bulk of profits were invested back into the business. This enabled Jel Sert to fund its expansion efforts independently.

During this time, new offerings were introduced, including a syrup mix and prepared cornstarch pudding. By 1941 growth prompted Jel Sert to relocate again, to a larger, 27,000-square-foot facility on 6601 South Sayre Avenue in Chicago's Clearing Industrial District. Completed in the fall of that year, the new facility served the company well during World War II, when production included a variety of dessert mixes for the armed forces.

Upon the death of Charles Wegner, Jr., on November 6, 1949, Lillian Wegner became the company's chief executive. While it was somewhat unusual for a woman to lead a company at this time in history, her knowledge of the enterprise and tireless dedication allowed her to excel in the role. According to the June 16, 1956, Chicago Tribune article, when asked about her company's good fortune, Lillian Wegner simply said: "To make a success of a business one must not be afraid of work."

INITIAL GROWTH: 1950–79

Indeed, under Lillian Wegner's watchful eye the business continued to grow. By the mid-1950s Jel Sert had become the third largest company in its field, with a base of approximately 75 workers, some of whom had been with the business for a quarter century. One of its employees was Lillian Wegner's son, Charles T. Wegner III, who was learning company operations in the position of vice president. Growth included new products, such as lemon- and orange-flavored drink mixes that were introduced around 1958.

Progress continued during the 1960s. In 1962, Factory Magazine recognized Jel Sert with an award for a new plant in Bellwood, Illinois, which was designed by Edward D. Dart. Building on the positive reception to the company's Flavor Aid brand, in 1963 Jel Sert acquired the Pop-Ice Co., a small manufacturer of then-novel freeze-at-home flavored pops. Following the deal, which enabled Jel Sert to enter a new market, the company expanded its offerings in this area later in the decade. After unveiling its Fla-Vor-Ice line in 1969, the brand soon became the nation's number one freezer pop.

In 1970 Lillian Wegner retired as Jel Sert's chairman and president. Sadly, she passed away in April of the following year. It also was in 1970 that the company relocated to West Chicago, where a former pickle plant was revamped to serve as its headquarters and primary production facility. It also was during the early 1970s that Jel Sert secured the services of advertising agency Trnka Group in Aurora, Illinois, after severing ties with its former agency, M.M. Fisher Associates.

NEW MARKETS AND CAPABILITIES

During the 1980s, progress continued at a steady pace. By the early part of the following decade, the company was positioned for further growth. Indeed, during the 1990s Jel Sert's product lineup grew at a heady pace. Developments during the first half of the decade included the introduction of a juice-box drink called MONDO Fruit Squeezers in 1991. Bolstered by heavy promotion, the new brand quickly gained nationwide consumer recognition. The well-known Wyler's trademark was acquired from Lipton three years later, adding established national brands to Jel Sert's portfolio. In 1996 the company acquired Otter Pops, an established brand on the West Coast.

During the mid-1990s, Jel Sert formed a consumer healthcare division. The development was part of a strategy to apply the company's knowledge of formulating and packaging beverages, frozen liquids, and drink mixes to new markets. In tandem with this strategy, Jel Sert upgraded its manufacturing operations, which already met very high standards, to meet those of the pharmaceutical industry. After registering with the U.S. Food and Drug Administration as a drug maker, Jel Sert formed an alliance with a major pharmaceutical company, which soon led to other such partnerships.

COMPANY PERSPECTIVES

For over eighty years, generations of families have enjoyed Jel Sert products. Quality, flavor, fun and value have always been and will always be the guiding principles at the Jel Sert Company.

In time the company would go on to make pharmaceutical-grade products like Pedia Care Pops for Pfizer, as well as Pedialyte for Abbott Labs. In the January–February 2005 issue of Food and Drink, Jel Sert Vice President of Consumer Healthcare Matt Ingemi discussed the capabilities the company came to develop in the decade after its new division was established, explaining: "Jel Sert has the ability to take a medicine or nutritional/functional ingredient and create a great-tasting finished product. Jel Sert can then take that product and put it into fun, unique formats—formats that can ease the administration of any functional product to otherwise hesitant recipients. From gels to freezer pops to beverages—in tubes, bottles or pouches—Jel Sert'sR&D staff provides any item with great taste and texture to help make a traditionally difficult experience into one that is enjoyable."

By the 1990s Jel Sert's operations had increased in complexity compared to only a few decades before. Like other manufacturing organizations of similar size, the company relied on computer software to manage certain business processes. In 1997 the company began searching for a new, Y2K-ready enterprise and manufacturing resource planning software system that could handle functions such as production scheduling, demand forecasting, and inventory control.

By July of the following year the company had signed a deal with software developer QAD for its MFG/PRO system. The software, along with modules for supply chain management, financials, manufacturing, and distribution, was slated for implementation in January 1999.

In an August 31, 1998, Business Wire release, Jel Sert Vice President of Finance Mike Alger said: "QAD's MFG/PRO gives us a fully integrated system allowing forecasting and sales to drive purchasing and production. The system integrates MRP, sales forecasting, scheduling and purchasing functions with financials so that we can achieve more efficient, cost-effective use of our resources."

Jel Sert's sales totaled about $140 million at the dawn of the new millennium. The new century was quickly marked with notable developments. In December 2000, the company acquired Nabisco Holdings Corp.'s $40 million baking powder, dry-mix pudding, no-bake dessert, and dry gelatin assets, which included Davis baking powder and Fleischmann's baking powder, as well as My-T-Fine pudding and Royal brand gelatin. The sale was made in connection with Philip Morris Co.'s acquisition of Nabisco, per antitrust requirements that had to be met in order for the federal government to approve the deal.

According to the January 22, 2001, issue of Crain's Chicago Business, some industry observers were skeptical of Jel Sert's ability to compete with heavyweight Kraft in the pudding and gelatin market. However, Jel Sert CEO Gary Ricco was comfortable with the company's underdog position, pointing to its success at competing with Kraft in the powdered drink category, where Jel Sert's Flavor-Aid and Wyler's brands vied for market share with Kraft's Crystal Light and Kool-Aid brands. Following the acquisition, which helped to smooth out the seasonal nature of the company's manufacturing, Jel Sert planned to produce the newly acquired food products at its West Chicago facility.

In June 2001, ground was broken for an additional 208,000-square-foot warehouse complex at 444 Charles Court in West Chicago. The new facility included docks for 28 trucks to load the company's freezer pops and food products, as well as 5,000 square feet of office space.

In 2003 Jel Sert made plans to revitalize its brands. The strategy involved new packaging, reformulated products, and new product introductions. In addition, the company put more marketing muscle behind its Wyler's Light brand, joined forces with Kellogg's Keebler division to manufacture a new line of fudge pops, and forged a licensing deal with Universal Studios to offer on-pack promotions related to the movies Spiderman and The Hulk.

KEY DATES

1926:: Charles T. and Lillian Wegner establish Jel Sert in a small facility on Chicago's Lake Street.
1949:: Upon the death of Charles Wegner, Lillian Wegner becomes the company's chief executive.
1963:: The Pop-Ice Company is acquired, enabling Jel Sert to enter a new market that it eventually dominates.
1970:: Jel Sert relocates its headquarters and manufacturing operations to West Chicago.
1995:: A consumer healthcare division is formed, allowing the company to serve the pharmaceutical industry.
2000:: Nabisco's $40 million baking powder, drymix pudding, no-bake dessert, and dry gelatin assets are acquired.

By mid-2003, Chairman Charles Wegner IV, grandson of founder Charles T. Wegner, Jr., was at the helm of Jel Sert. The company employed some 700 workers at its facilities, which spanned 650,000 square feet. Machines at Jel Sert's plant were able to produce about 1 million freezer pops per hour to satisfy consumer demand. While the company had evolved considerably since its early days, some things had not changed. In the July 23, 2003, Chicago Daily Herald, Wegner reminisced about taste-testing the company's products as a child, and said: "Our kids are working in the lab concocting new things now."

The following year, Jel Sert entered the candy manufacturing arena when it began producing the Sweet Cred candy brand for the U.S. market. Already popular in Europe, the line included Skateboarders (wind-up action figures affixed to candy-filled tubes), as well as Cuties (porcelain dolls with rainbow lollipops), and Wrist Lickers (hard candy on a wrist-mounted strap).

Growth continued into the middle of the decade, as Jel Sert's workforce grew to 800 employees. Based on data from Information Resources, Inc., reported in the August 2005 issue of Dairy Field, the company was the nation's leading manufacturer of ice pop novelties for the year ended July 10, 2005, with a commanding market share of 49.9 percent. The next largest players were private labels (13.3%), followed by Latin Specialties Inc. (9.6%), and Kraft Foods Inc. (4.9%).

By late 2006, Jel Sert had forged its first exclusive licensing agreement with another manufacturer. The deal with Unistraw International Pty. involved the production of a unique line of straws that added flavor to milk during the drinking process. Called Sipahh, the straw devices also could be used to add pharmaceuticals, nutrition, vitamins, and more to beverages.

Heading into the end of the decade, Jel Sert continued to improve the sophistication of its operations. This was evident in the implementation of specialized software to manage the company's transportation and logistics functions. In 2007 Jel Sert continued to produce its own brands, making and selling more freezer pops than any other company in the world, and to focus on expanding production of privatelabel goods for other companies.

Paul R. Greenland

PRINCIPAL COMPETITORS

American Dairy Queen; Carousel Foods of America, Inc.; CoolBrands International, Inc.;J&JSnack Foods Corp.; Kraft North America Commercial; Lulu's Dessert Corp; Nestlé S.A.; Premier Foods plc; Rich Products Corp.; Unilever N.V.; Wells' Dairy Inc.