How Margaret Rudkin Used A Loaf of Bread To Turn Pepperidge Farm Into An Industry Dynamo (2022)

Pepperidge Farm founder Margaret Rudkin literally came up with a recipe for success.Driven by a goal to find a healthy diet for her ailing son, Rudkin experimented with bread recipes that would not trigger his allergies. Rudkin's journey from doting mother to entrepreneur is one of tireless determination to tread on unknown territory.

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Rudkin (1897-1967) started what became Pepperidge Farm in her home in 1937. She built it into a giant in the baking andfood industry.Focused on healthier bread using all-natural ingredients, Rudkin was among the pioneers of the natural food industry.

But the road to success was fraught with challenges. After all, these were the 1930s. Rudkin was a society woman and housewife. She had no baking or business experience. Soshe started from zero. She learned to bake. And she honed her business acumen as she went along.

"Although Margaret didn't know anything about manufacturing, marketing, pricing or making bread in quantities, she was a very savvy business woman learning on the fly," a Pepperidge Farm spokesperson told IBD in an email interview. "Committed to quality ingredients and products, Margaret knew that there was a market for premium homemade bread on a large scale."

She was right. Pepperidge Farm, which today is a subsidiary of Campbell Soup Co. (CPB), isa leading provider of premium quality fresh bakery products, cookies, crackers and frozen foods.

Learned While Doing

"The key to Margaret's success as a business leader was breaking the rules and carving out her own path," said the company representative."While she didn't have more than ahigh school education and bookkeeping training from a firm, Margaret forged her own path, learning quickly how to compete in the grocery business, even with a premium loaf of bread, convincing reluctant grocers by slicing up her savory bread to sample."

The Pepperidge Farm saga began during the Great Depression in Fairfield, Conn. Rudkin and her husband Henry, a stock broker, faced financial challenges. Meanwhile, their son struggled with allergy-related asthma. His condition made him unable to eat most commercially processed foods. On the advice of a specialist, Rudkin put him on a diet of fruits, vegetables and minimally processed foods.

But a conventional diet wasn't good enough for Rudkin. Her entrepreneurial instincts kicked in.She tinkeredwith bread-baking around 1936. She bakedall-natural, stone-ground whole wheat bread with vitamins and nutrients intact. That may sound common today. But not back then. Many skeptics, including her son's doctor, didn't think it was possible to bake nutritious bread that was also "delicious."

Persistence Paid Off

Rudkin proved the naysayers wrong.Herbreadgot rave reviews. And it relieved her son's asthma. Even the doubting doctor became a convert. In fact, he "prescribed" her bread to many of his patients, according to the Pepperidge Farm website.

It took Rudkin many tries to come up with a winning bread recipe. "My first loaf of bread should have been sent to the Smithsonian Institution as a sample of Stone Age bread, for it was hard as a rock and about 1-inch high," Rudkin once said. "So I started over again, and after a few more efforts by trial and error, we achieved what seemed like good bread."

Encouraged by the final results,Rudkin decidedto sell her bread to grocers. Toconvince a reluctant local grocer to buy her bread, she gave him a taste of the bread. That sealed the deal.Rudkin insisted her bread be sold for 25 cents a loaf to cover her costs. That was a steep price. The going price for bread was 10 cents a loaf.The grocer liked the product so much, he took all the loaves. By the time she arrived back home, he had left a phone message asking for more.

Through word of mouth, requests came pouring in. As a result, Rudkin set up a small mail order business from her home. As the business grew, she sought help. She found a miller to stone-grind the whole wheat. Soon her business outgrew her kitchen and moved to her garage.In 1940 she opened her first real factory.

Innovated

Rudkin became one of the "originators" of the heath food trend, saysElizabethRose, library director at theFairfield Museum & History Center.

"(Rudkin) had a very good sense of how to approach the market," Rose said. "She understood the value in the product being natural, old fashioned and healthy, and that people would pay a little more for this higher-end product. She could see the potential for that kind of market at a time when bread sold commercially was highly processed and less expensive."

Rudkin continued to take calculated risks to expand her offerings. By 1960, Pepperidge Farm had more than 50 products. The products were sold through 500 distributors and some 50,000 stores across the U.S. For the fiscal year ending in April 1960 profits totaled about $1.3 million on revenue of $32 million, according to Pepperidge Farm.

Broke Barriers

Campbell bought Pepperidge Farm for about $28.2 million worth of Campbell stock in a deal that closed in January 1961. Rudkin continued to runPepperidge Farm asa wholly owned subsidiary of Campbell. She also gained a seat on the Campbell's board — the first woman to do so. And whenHenry Rudkin retired in 1961, Margaret took over as chair.

"She really navigated the gender expectation of her day skillfully in order to be successful as a professional and in order to create and maintain a compelling brand that attracted customers," said Edie Sparks, vice provost for undergraduate education and professor of history at the University of the Pacific.

Hands-On Leadership

Rudkin, who was president of Pepperidge Farm,oversaw everything from technological innovation to marketing strategies.

"Rudkin also presented herself as a skilled manufacturer — independent and capable, the chief architect of her successful business," wrote Sparks in her 2017 book "Boss Lady: How Three Women Entrepreneurs Built Successful Big Businesses in the Mid-Twentieth Century."

For example, when the company's new plant in Norwalk, Conn. was being built, Rudkin personally designed the manufacturing setup and "knew exactly how the bakery equipment would be situated to support the most efficient and effective manufacturing process," Sparks wrote.

Adapted To Trends

Over time, expansion, modernization, diversification and acquisitions helped fuel growth.Rudkin introduced new products, such as all-natural white bread made only with unbleached flour.

More products and market growth came in the 1950s when Pepperidge Farm acquired a frozen pastry company, and secured production and distribution rights for Milano, Brussels and Bordeaux cookies. Soon other new products followed including Goldfish crackers in the 1960s.

Natural Brand Builder

Rudkin leveraged her gender to build her brand and fuel growth.

"She could capitalize on the fact that it was a woman-owned business and a woman created the brand," Sparks said.

She hired one of the top ad companies in the world to do the advertising — the David Ogilvy agency that later became Ogilvy & Mather.

"They used her to help with the way the brand was positioned by turning her into the friendly grandmother," Sparks said.

Trailblazer

Rudkin possessed qualities and values that made her a rare woman in business. Not only did she create and deliver quality products, she also paved the way for other women to join the workforce.

"I believe the women who entered the corporate world in the '40s, '50s and '60s had the tenacity and strength of character to make them be successful in that climate and that helped them," said Ilene Frank, chief curator of the Connecticut Historical Society.

Rudkin combined her favorite recipes and memoirs in "The Margaret Rudkin Pepperidge Farm Cookbook" published in 1963. It was the first cookbook ever to make"The New York Times"best-seller list.

Rudkin's Keys

Started Pepperidge Farm with a loaf of bread and no business experience.

Overcame: Financial and personal challenges of the Great Depression.

Lesson: "There isn't a worthwhile thing in the world that can't be accomplished with good hard work."

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