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.The Eternal American Battle - Humans V Money

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Wednesday, October 14, 2009

NEW UNDER THE SUN


I celebrate the fourth of July, every year. But I also be celebrate the fifth of July, because on the fifth of July in 1883 the U.S. government granted patent #278967 for a formula of something that had never existed under the sun before. The patent was granted for an invention that every one reading this has probably used at least once in the past year, and if you haven’t used it in the past year, you really ought to. It was the brainchild of an energetic young marketing genius with some help from his brother, and the invention made them both rich – even though their original idea was pretty much a bust.

The story begins with a pharmacist in London named Gustave Mellin. Like many other pharmacists of his day, Gustave was looking for a magic elixir that would make him rich. In the second half of the nineteenth century, all over Europe and America, ambitious young men were throwing chemicals into pots and kettles and selling the resultant concoctions to unsuspecting guinea pigs (aka customers). Some of these latter day alchemists just made people ill. A few killed people. And few got very rich.

It was an Atlanta pharmacist, Dr. John Pemberton, who cooked up Coke-a-cola in his back yard in 1886. And Caleb Bradham of New Bern, North Carolina invented Pepsi Cola in his pharmacy during the summer of 1893. In Cincinnati in 1886 Robert Johnson, who had worked as a pharmacists’ apprentice, joined with his brothers James and Mead in forming Johnson & Johnson, to sell their inventions of band aids and first aid kits. But the guiding light for Gustave Mellin was Henri Nestle, a Swiss citizen who in 1867, made his reputation and his fortune by saving a premature infant with his own recipe of powdered milk and ground up wheat. His formula released the proteins trapped in wheat by grinding it into a powder, and thus making it easy to transport over vast distances and store for long periods.

Nestle’s sold his product by warning first time mothers that “impure milk is one of the chief causes of sickness among babies.” And in London another Swiss citizen, Gustav Mellin began selling his own version of Nestle's formula, which he inventively called “Mellin’s Food”.  Mellin’s marketed his product with free samples, and a pseudo-scientific booklet convincing new mothers his formula was better for their babies than breast milk. Within a few years Mellin became Nestle’s principle competitor. And the success of Mellin attracted the attention of a young, dashing, handsome, ambitious and driven Englishman from the tiny village of Ruardean, in Gloucestershire.

James Horlick began as an apprentice at the feet of the master, and what he learned from Mellin was that marketing was at least as important as the invention itself. But working for somebody else was no way to get rich, and in 1873 James quit his job and immigrated to America, to join his younger brother William in Chicago. And he took with him a little something he had been working on.

In 1860, for the last time in history, the value of American agricultural goods was greater than the products from her factories. And amazingly this shift happened at same time that American farms were becoming the breadbasket of the world. Chief among this new bounty which was flooding the world markets was American wheat and rye. And that is why James and William Horlick had emigrated to America. The money was still in England, but the source of that wealth was now in America. And within weeks after James arrived in Chicago the brothers set up J&W Horlicks to market their new baby wonder food, “Diastroid”.

What William and James needed was a community with cheap property values, a ready supply of clean water, an already industrialized work force, easy access to their raw materials (wheat and rye) and to shipping routes. They found just what they were looking 60 miles North of Chicago, where the Root River enters Lake Michigan, in Racine, Wisconsin.

The city had been incorporated in 1848 with a population of 3,000, and by 1870 was approaching 30,000, filling with English, Danes, Czechs, Swedes and Norwegians. The foundation of the economy was the town’s harbor and rail connections. Early on Fanning Mills built heavy farm equipment here, including machines to separate the wheat and barley from its chaff, the slurry of which is called a malt. That created a pool of trained factory workers which attracted Jerome Case who built his heavy equipment factory there, and S.C. Johnson who established his cleaning products factory in Racine.

So, in 1877 the Horlick brothers opened their single story factory in Racine, making "Horlick's Infant & Invalids Food" and got ready for success. Okay, it was a little slow in coming. Oh, the baby formula business was doing okay, but it was by now very competitive and not the rocket to success that James had dreamed about along the banks if the River Wye, back in England. Still, in 1883, James’ preeminence in the field of baby food had been confirmed with the new patent, thus effectively limiting their competition. In 1890 James returned to England to be closer to the money, and to handle the marketing of their infant cuisine empire. In 1908 Horlick’s opened a new, much larger plant in Racine. And they just kept plugging away, searching for the marketing angle that would make them rich beyond their wildest dreams.

 They thought they had hit the mark in 1909 when explorers Robert Peary, Amundsen and Scott all three pick Horlik’s product to supply protein for their assaults on the North and South Poles. Overnight Horlick's food was in the forefront of the "health food" craze. And it remains a popular health food item to this day. That same year, 1909, the brothers opened a new plant in New Zealand, to supply mothers and explorers down under with portable protein. But that was not the advancement that changed human life.

But it was in the early years of the 20th century that the great revolutionary event did occure. It’s unclear who did it first, but my bet is it was the new player on the stage. They were called "soda jerks" because in the early years they were required to jerk on the levers to dispense the carbonated water that was the main ingrediant of their trade. I doubt that it was an employee of Horlick who first made the discovery, else their name would have been enshrined in company legend. Besides, after all, it was a small step and may have been taken in several places at about about the same time.

Remember the Horlick formula was a concoction of ground wheat, dried just-sprouted barley malt and powdered milk, which was then mixed in water or milk at the point of sale. And then some unknown genius  added ice cream, and thus was born the malted milk shake.

I doubt that most people realize that everything “malted” can only be made under license from Horlick’s, including malted milk, malted milk balls, malted tablets or disks and malted “shakes”. Malted is a flavor that is owned. It was invented. It does not appear anywhere in nature. It started out as baby food, then became a health food before it became a treat of magical proportions. And it gave all those soda jerks something to serve with the ice cream Sundaes they had invented, because in the conservative core of middle America carbonated water was considered too racy a drink to be served on the Lord's day.

But surely, before the judgment of God, the invention of the cold, frothy and thick Malted Milk Shake will count on the plus side for humanity come the judgement day.

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