Chapter Seven

Orange Juice and Raisin Bread

TOWARD THE END of 1904—the year Albert Lasker bought his initial stake in Lord & Thomas and the gifted but erratic John E. Kennedy arrived on the scene—a delegation from the Southern California Fruit Exchange (SCFE) made its way to the Trude Building. They were there to hear Lord & Thomas’s proposal for a campaign to promote California citrus products.

By that time, Lasker was the leading rainmaker in the agency, so it is safe to assume that he helped shape the presentation that was made to the SCFE that day. Perhaps he also helped deliver it.¹ If so, it was one of his rare failures.

That day, Lord & Thomas proposed a test campaign aimed at promoting oranges in Iowa. The choice of target was not as arbitrary as it might sound. More than the residents of any other Snow Belt state, Iowans took winter vacations in California and were accustomed to eating the relatively exotic fruits that the SCFE hoped to promote. Perhaps Iowans would respond to an effort to build demand for oranges on their home turf.

The $30,000 price tag for the campaign struck the SCFE delegation as far too high. The Californians said no and went home, temporarily giving up on their dream of persuading Midwesterners to eat oranges.²

Oranges and lemons had come to California along with Spanish missionaries in the 1700s. During the Gold Rush of the 1840s and ’50s, interest in citrus fruits was spurred by the discovery that they could prevent scurvy, a vitamin-deficiency disease that in this case erupted when the incoming stampede of miners overwhelmed the local food supply. But the first real boom in orange production came with the introduction into California of the navel orange in the 1870s. Sweet, seedless, and visually striking, the navel quickly swept across Southern California. The summer-ripening Valencia orange came next, complementing the November-to-May harvest season of the navel.³

This move toward year-round production appealed not only to the growers, but also to the railroads. The 1885 arrival of the Southern Pacific and the Atchison, Topeka, and Santa Fe lines in Los Angeles linked that city by rail to Eastern markets for the first time. Technological advances—such as the ventilated freight car (1887) and the “ice-bunker” car (1889)—further promoted the shipment of citrus fruits and other perishables. Land-rich railroads like the Southern Pacific had another compelling reason for promoting Southern California: they wanted to sell some of their landholdings to easterners. The depiction of California as a veritable Garden of Eden could only help the cause.

But from the grower’s perspective, all was not well in paradise. During the last two decades of the nineteenth century, agents and shippers had transferred most of the risk inherent in the citrus trade to the growers. Prices were set at daily auctions in major cities in the Midwest and East, and—because demand was relatively flat—those prices were driven entirely by supply.

Beginning in the late 1880s, California’s orange growers began organizing into cooperatives to enhance their bargaining power, increase their financial returns, and—from their perspective—share risks more equitably. The economic recession of 1893 put enormous pressure on farmers across the nation, and in August of that year, the Southern California Fruit Exchange was born to advance the interests of California’s orange growers. Lemon growers joined in 1896, and in 1905, growers from the San Joaquin Valley north of Los Angeles joined the exchange. At this point, the cooperative changed its name to the California Fruit Growers Exchange (CFGE).

Several of the CFGE’s leaders were convinced that better marketing was critical to the Exchange’s long-term success. By 1907, something like thirty thousand boxcars of oranges (or about 10 million boxes) were being shipped out of California—five times the 1893 total—and in peak harvest seasons, oversupply was pushing prices so low that many growers were operating at a loss.⁴ And the future looked worse: past success had led to the planting of thousands of acres of new groves, and as these new trees began to bear fruit over the next several years, the orange supply might well double.⁵ Either supply would have to be reduced—a difficult task in a cooperative made up of some six thousand independent-minded farmers—or demand would have to be increased through advertising.

But what, exactly, was to be advertised? The “California Fruit Growers Exchange” would not be an easy sell. Of course, one could sing the praises of California oranges, but (as skeptical CFGE directors pointed out) this would also benefit the growers who were not CFGE members—and who would have a cost advantage because they weren’t advertising.

Cost remained an issue, as well. The CFGE was a tightfisted, low-overhead operation. With this constraint in mind, the CGFE’s president approached his counterpart at the Southern Pacific Railway in the early months of 1907. The Southern Pacific was not a natural ally, given its history of price-gouging on freight rates. Nevertheless, the two presidents struck a deal: for every dollar the CFGE spent on advertising to promote citrus products, the Southern Pacific would throw in a dollar to support the campaign. With this incentive in hand, the CFGE board authorized an expenditure of $10,000 to test the effectiveness of advertising. This meant that up to $20,000 would be available to run a bold experiment: the first large-scale advertising of a perishable commodity.

Lasker’s agency was a natural choice to run the experiment, since Chicago was a major terminus for railroads running to and from the west coast, and it was there that the CFGE maintained its General Eastern office, responsible for its marketing efforts. In the spring of 1907, Lord & Thomas and the CFGE struck a deal for an exploratory campaign. It was a relatively small effort, but it got Lasker’s attention:

I remember vividly my first contact with the California Fruit Growers Exchange, over thirty years ago. The vice president in charge of traffic of the great Southern Pacific Railroad came into our office and said that the railroad was interested in seeing the demand for oranges and lemons increased, so that they could get the added tonnage . . . This railroad official introduced us to the head of the newly formed Citrus Cooperative . . . An initial venture of $3,000 in Iowa—a test campaign—marked the entrance of Sunkist oranges into advertising.⁶

Lasker’s account compresses several stages in the new account’s evolution. In July 1907, for example, copywriter R. C. Brandon proposed using the name “Sunkissed” to bring the many CFGE brands under one marketable umbrella.⁷ A month later, the agency had a revised recommendation: Sunkist, a made-up word that would be easier to defend as a trademark. The CFGE’s growers were intrigued, but couldn’t bring themselves to embrace a single trademark that would subsume all of their individual orchards’ trademarks.

Once again, the campaign was aimed at California-friendly Iowa, and was scheduled to roll out in early March 1908, coinciding with the peak of the navel crop. Still lacking a compelling brand to market, Lord & Thomas fell back on pushing the generic concepts of “California” and “oranges.” For its opening salvo, the agency prepared a full-page ad for the Des Moines Register that declared the first week in March to be “Orange Week in Iowa,” supposedly coinciding with a week of parallel festivities in California. (The truth, of course, was that most orange growers were far too busy that week, as their valuable crop came in, to stop and celebrate anything.) “Now,” the ad proclaimed, “Iowa will celebrate ‘Orange Week’ . . . by receiving direct from the beautiful groves of California hundreds of carloads of the choicest oranges grown in the world.”⁸

In a departure from most of Lord & Thomas’s work, the centerpiece of the ad was a cartoon by the then-popular J. N. (“Ding”) Darling. (Lasker—who disdained illustrations of all sorts—lost this argument.) The cartoon depicted a little girl in a bonnet and summery dress (labeled “Miss California” on the hem) feeding a half-peeled orange to a second little girl wearing a winter hat, leggings, gloves, and a heavy coat labeled “Iowa.”⁹ Also surprising was the fact that the ad was published in three colors—orange, green, and black—an almost unheard-of luxury, for newspaper advertisements of the day.

The ad appeared on Monday, March 2, 1908, as part of a larger campaign of advertising and public relations. Reflecting its two sponsors, the campaign had two distinct but complementary themes. As the Sunkist corporate history puts it: “Fruit was shipped to Iowa in special bannered trains, and prizes were offered for articles that could be used in advertising California oranges and lemons. Southern Pacific posted billboards throughout Iowa to display such slogans as, ‘Oranges for health—California for wealth.’ A prominent lecturer was employed to tour Iowa’s larger cities to elaborate on California’s many advantages, especially its orange industry.”¹⁰

Estimates of the cost of this initial campaign vary, ranging from Lasker’s $3,000 to a $15,000 estimate made by a former CFGE manager. But there was no confusion about the success of the campaign. While the Exchange’s business increased by an average of 17.7 percent elsewhere in the country during 1908, it shot up by 50 percent in Iowa.¹¹

Could perishables be advertised on a large scale? The answer was a resounding yes.

Thereafter, the CFGE began taking Lord & Thomas’s advice more seriously. In April 1908, it formally adopted the Sunkist brand to identify the best fruits produced by its member growers.¹² The growers still weren’t ready to give up on their colorful and distinctive packing labels, which had evolved into a high form of commercial art. But they were ready to compromise. According to the cooperative’s official history, some 6 million “Sunkist orange” stickers (and 1 million “Sunkist lemon” stickers) were ordered in the fall of 1908, to be pasted on top of the growers’ own labels.

Everyone agreed that the advertising had succeeded beyond all expectations, and—in anticipation of the 1909 growing season—the CFGE’s board increased its advertising budget to $25,000, and instructed Lord & Thomas to begin blanketing the northern half of the country with ads for citrus products.¹³

Now Lord & Thomas had a brand—Sunkist—that it could work with. At this point, though, a strange wrinkle arose: there was no easy way to attach the product’s name to the product. The CFGE’s growers wanted to make sure that their advertising dollars generated returns for them, rather than for rival growers in California or much-despised Florida. But once the grocer took the oranges out of their separate boxes, who was to know which fruit was the Sunkist? What was to prevent a grocer from selling a cheaper Florida orange as a Sunkist, and pocketing the difference?

Lord & Thomas argued for a paper wrapper, stamped with the Sunkist logo, that would accompany each piece of CFGE-packed fruit from the packing house to the merchants’ counters, and the growers agreed to this solution. During the 1909 season, however, it became clear that unscrupulous merchants were throwing away the wrappers and calling all of their oranges “Sunkist,” in an effort to unload inferior products (as well as Sunkist oranges) at premium prices.

A Lord & Thomas publication recounts the solution that the firm hit upon:

To force the retailer to retain the wrappers on the fruit, we suggested to the Exchange that they advertise that they would give a Sunkist Orange Spoon to any one who would send them twelve Sunkist wrappers and 12 cents to partly pay the cost. In this way, the consumer would ask for the wrappers from the retailer and force him, whether he wished to or not, to keep the wrappers on the fruit. The trade was also circularized on this fact, impressing on him the value of keeping the wrappers on for the benefit of his trade, and also that fruit kept in wrappers was more salable and held its appearance much longer than if left unwrapped.¹⁴

The spoon gimmick proved an immediate and astounding success. No matter that the flatware (“in the exclusive new ‘California Blossom’ pattern,” according to one ad¹⁵) was not particularly distinguished. In the first year of the promotion alone, consumers snapped up a million spoons, with orders coming in at the rate of five thousand a day. At Lord & Thomas’s urging, Sunkist expanded the flatware line to fourteen pieces, comprising everything from gravy ladles to iced-tea spoons. “The entire planning of this premium feature,” Lord & Thomas recorded a few years later, “the designing of the individual pattern and all negotiations were made by us.”¹⁶ By 1910, more than 2 million pieces in the California Blossom line had been distributed, making the CFGE the largest single purchaser of flatware in the world.¹⁷

Even Lasker’s self-confident firm had failed to anticipate this volume. Lord & Thomas had guessed that the twelve-cent cash payment would offset some of the costs of the premium. But when volumes soared, and the CFGE began buying silverware by the carload, the flatware trade began making money for the CFGE—something like a $40,000 profit, in the first year—presenting a welcome sort of problem for the Exchange, which by the terms of its charter was supposed to be a nonprofit.¹⁸

Meanwhile, the real business at hand—selling oranges at a profit—continued. Lord & Thomas developed a second brand, Red Ball, for lesser-quality fruit produced by CFGE growers; Red Ball produce was marketed in sections of the country that proved unwilling to pay a premium for the highest-quality produce. In 1910, Lord & Thomas noted, there was “not a single shipment of Sunkist or Red Ball oranges on which the grower has not made a profit”—a dramatic turnaround for an industry that often failed to find a way to make money.¹⁹ The firm also developed plans for particularly tough or competitive markets, and these, too, met with success. “We have devised plans and carried same out which has produced results in such territory,” a Lord & Thomas publication proclaimed in 1911, “and out of 400 towns in which their advertising appears, but four of them do not show a handsome profit.”²⁰

The growers rewarded Lord & Thomas by increasing their advertising budget dramatically: from $40,000 in 1909 to $100,000 in the following year. Because of the ever-increasing volume, the per-box cost of advertising remained relatively low—something like one of the seven cents per box that the Exchange charged its members. “During the last three years,” the CFGE’s general manager told his directors and members in August 1912, “your advertising campaign has added about one cent to your expenses which, in my opinion, is the best investment you have ever made.”²¹

The evidence for this assertion was compelling. By 1914, Americans were consuming forty oranges apiece per year: up almost 80 percent from the comparable 1885 figure.²² In 1915, the Exchange increased its advertising budget to $250,000.²³

It would be a mistake to conclude that Lord & Thomas had all the answers and that the CFGE simply blessed and paid for the Chicago firm’s insights and innovations. In fact, the Exchange had an extensive and sophisticated distribution network, which included a number of talented marketers.

One of these was a young man from Lansing, Michigan, named Don Francisco. Francisco was later described by Lasker’s biographer as “bland, cheerful, outgoing, and a good executive”—in other words, “altogether different” from Albert Lasker.²⁴ A graduate of the Michigan Agricultural College, Francisco signed on after college as a Chicago-based fruit inspector for the CFGE. In that role, he checked shipments of fruit arriving in Chicago, protecting the growers from unfair claims of spoilage during shipping. In the summer of 1914, Francisco took a new job with the Exchange, circulating among the grocers and other retailers who sold Sunkist products:

I started calling on retailers as a matter of curiosity, to see what kind of oranges people asked for, and how many they bought at a time, and how they selected them, and so on . . . I tabulated these findings that I made, and gave them to the [CGFE’s] advertising manager, and he was very much interested, and asked me to do this in other cities, on a larger scale . . .

I picked up a lot of ideas on how the smart dealers increased their sales of oranges and lemons. And, as I would go about this work, I would pass on these ideas to other dealers . . . to tell the retailers how they could increase their sales.²⁵

One of the things that Francisco learned in his travels was that soda-fountain attendants hated to make fresh-squeezed orange juice or lemonade. Extracting the juice from the fruit made too big a mess and took too much time. As a result, many retailers simply priced these drinks out of reach or served a substitute beverage.

To Francisco, this hinted at a far bigger problem. Wouldn’t people in their houses encounter exactly the same problems and look for something else to drink? Or, phrased more positively: wouldn’t it be good for orange sales if, instead of encouraging people to eat half an orange with a spoon, you could persuade people to consume the juice of a whole orange—or even two or three whole oranges?

Working with manufacturers in 1915, Francisco first developed a heavy-duty electric juice extractor for use in soda fountains—“to make it simple for the clerk to prepare it,” Francisco later explained, “and convince the consumer that it was made from the real thing.”²⁶

At the same time, the ad hoc team developed both a scaled-down electric extractor and a simple glass extractor for home use. A glass company agreed to produce a million of these glass extractors—with the “Sunkist” name prominently displayed in raised glass letters along its sides—to be sold by fruit retailers for a dime apiece.

Francisco, working closely with Lasker’s agency, had invented orange juice.

All of this, of course, was a preamble to an advertising campaign, and Lord & Thomas happily pounced upon Francisco’s innovative work. In 1916, the agency introduced the classic campaign that later became known as “Drink an Orange.”

“Nature’s finest beverage,” read the headline of an early ad in this series, “pure orange juice.” The ad depicted a woman spoon-feeding orange juice to a jolly, pink-cheeked baby. Orange juice, claimed the ad, “is regularly prescribed for the diet of tiny babies because physicians know its purity and food value.” The fruit from which this healthful juice was derived was produced by eight thousand growers “whose sole purposes in organizing [were] to produce better fruit and distribute it so economically that every family may obtain it at a reasonable cost.” The ad instructed readers to look for glass Sunkist extractors at their favorite store or to send sixteen cents in stamps to receive one direct from Sunkist.²⁷

Again, the response was astounding. The campaign resulted in sales of something like 70,000 commercial juicers, 140,000 electric juicers for home use, and more than 3 million glass juicers. Independent glassware manufacturers jumped into the market with their own juicers, extending the impact of the Sunkist push. On the strength of this campaign alone, orange consumption per serving in the United States soared from a half an orange to between two and three.²⁸

In 1916, at the request of the CFGE, Lord & Thomas opened a branch office in Los Angeles to service the burgeoning Sunkist account. Robert P. Crane was named head of the new office, and Don Francisco—now the CFGE’s advertising manager—also relocated to Los Angeles, in part to keep working closely with Crane. Francisco produced the growers’ newsletter, the Sunkist Courier, and helped develop new campaigns in support of oranges. Crane and Francisco also ended the premium program and shifted to advertising that emphasized the fruit itself—most often, beautiful full-color portraits of oranges or lemons—and increasingly focused on the health benefits of consuming citrus fruits.²⁹

Crane, meanwhile, rode herd on an increasingly far-ranging office. Two years earlier, in 1914, the runaway success of the orange campaigns had convinced the California raisin industry to hire Lord & Thomas. Then, in 1915, the CFGE began aggressively advertising lemons. As part of this campaign, Lord & Thomas pushed lemon pie, lemon in tea, lemon garnishes, and lemon juice as a hair rinse. Of particular concern to the CFGE was competition from imported Italian lemons, which in that year commanded about half of the U.S. market; accordingly, Lord & Thomas stressed the advantages of California lemons. By 1924, California lemons—mainly Sunkist—had captured almost 90 percent of the domestic market.³⁰

In 1917, the California Walnut Growers association signed on, and between 1917 and 1923, consumption of California walnuts increased from just under 40 million pounds to almost 50 million pounds.³¹ Similar stories could be told of avocados, apples, butter, eggs, grapes, honey, lima beans, milk, olives, peaches, pineapples, plums, prunes, and nectarines—all of which Lord & Thomas promoted in the early decades of the twentieth century.

By and large, these promotions were not only successful, but were accomplished at a reasonable cost.³² In the case of oranges, for example, the incremental cost of advertising was about 4.5 cents per box of oranges and 7 cents per box of lemons (or between one-quarter and two-fifths of a cent per dozen). Advertising of oranges averaged about 1.07 percent of the freight-on-board (FOB) value of the Sunkist orange crop between 1908 and 1924.³³ Stated differently, the CFGE during these years spent less than one cent per year per customer, while the FOB returns increased from $11.8 million to $50.5 million.³⁴

Advertising of fruits also brought benefits to consumers, and not only in the realm of improved diets. As growers invested more and more dollars in their collective brand, they were more inclined to protect that brand from self-inflicted wounds. Traditionally, for example, orange growers whose orchards suffered a heavy freeze rushed to harvest and ship their crops immediately, before the frost damage became visible. The frustrated consumers who ate the damaged product—tasteless and dry—would conclude that all California oranges must be inedible. By the mid-’teens, Sunkist’s growers had learned that their long-term interests lay in disposing of damaged goods. “In the Sunkist trademark,” Don Francisco observed, “they had a definite asset to protect.”³⁵

Lord & Thomas’s relationship with the California citrus industry, and specifically its ties to the CFGE, was remarkable for its durability and relative tranquility. The agency’s relationship with California’s raisin growers presents a far different picture. This story includes financial shenanigans, mutual accusations of betrayal, threats and counter-threats, and firings and rehirings.

The saga begins in 1913, with the adoption by Congress of language (in the form of a rider on an appropriations bill) that prevented the Department of Justice from using antitrust laws to prosecute farmers who acted cooperatively to extract higher prices for their products. The Clayton Act, passed a year later, exempted certain kinds of agricultural cooperatives—for example, non-stock associations—from the antitrust restrictions of the Sherman Act of 1890, and the CFGE reorganized itself as a non-stock organization to bring itself into compliance with the provisions of the Clayton Act.

Not so wise were the California raisin growers, who incorporated themselves in 1912 as the California Associated Raisin Company (CARC). CARC’s founders put a cooperative “face” on their enterprise, in part to persuade skeptical growers to sign up. But it was in fact a traditional corporation, structured to provide ready infusions of capital because the company intended not only to gain control over the supply of raisins (i.e., horizontal control), but also over the processing and packing of raisins (vertical control). This vertical integration required a strong capital base, and CARC’s capital stock increased from $1 million in 1912 to $5 million in 1919.

From the start, therefore, CARC was very different from the CFGE. Heavily influenced by local banking interests, it first paid dividends to its shareholders and paid its growers afterward. Stock ownership was not restricted to growers, and by 1919, more than half of CARC’s stock was held by nongrowers.³⁶ As a result of these and other factors—especially its push toward vertical integration—CARC risked provoking the federal government into initiating antitrust action against it.³⁷

Meanwhile, CARC also faced many of the same issues confronted by CFGE, the most urgent being the need to stimulate demand. Shortly after its incorporation in 1912, CARC came up with the brand name “Sun-Made,” which played off the highly successful Sunkist brand; the company also invented the soon-to-be-familiar image of a pretty girl in a sunbonnet holding an overflowing basket of grapes. But these first steps failed to go far enough, largely because of continued overproduction by the growers. In 1913, the industry produced 132 million pounds of raisins but sold only 110 million pounds, creating a “carryover” of 22 million pounds that threatened to depress 1914 prices drastically. At this point, CARC took yet another cue from CFGE. Impressed by the orange growers’ successes, the California Associated Raisin Company hired Lord & Thomas to stimulate demand for its own commodity.

Wylie M. Giffen, president of CARC and a veteran of the raisin wars that had led up to its founding, sold the idea of advertising to his board and also persuaded the board to allocate $100,000 for advertising beginning in 1914. Lord & Thomas’s Robert Crane made an immediate and obvious suggestion: change the brand name from “Sun-Made” to “Sun-Maid,” thereby strengthening the trademark potential of the name and its inherent pun.

An orchestrated campaign to drive up raisin consumption opened on several fronts. CARC, which set up offices and hired sales forces across the country, began marketing a five-cent box of raisins through cigar stores and drug stores. The new package met with instant success: something like 16 million boxes were sold within three months of its introduction. “You’d see that five-cent package on every cigar counter and [in] every drugstore,” Don Francisco later recalled. “They were under foot all over town. You’d see the used cartons [where] hikers and fishermen went up to the mountains.”³⁸

Meanwhile, Lord & Thomas pushed what it referred to as “carrier foods,” including raisin bread, raisin pie, and raisin toast, among others. A typical ad (from the December 1915 Ladies’ Home Journal) depicted a young girl handing a grocer her shopping list: “Give me a loaf of California Raisin Bread. Also a package of Sun-Maid Raisins.” The accompanying text emphasized that raisin bread was “delicious, nutritious, digestible, and slightly laxative.” It suggested that housewives “serve it daily . . . at every meal,” so that their children could “satisfy, in the most healthful way, their natural desire for sweets.” In relatively small type at the bottom, the ad encouraged the reader to “send your grocer’s name and address” to receive a “beautiful book showing ways to use Sun-Maid Raisins—in cereals, sandwiches, salads, pies, puddings, cookies, cakes, sweetmeats, and frozen desserts.”³⁹

Through steady increases in advertising expenditures, CARC and Lord & Thomas pushed up per capita consumption of raisins. At least up until 1921, this joint effort eliminated the carryover of raisins from one year to the next, and thereby protected growers’ income. This was a remarkable achievement, in light of the fact that between 1914 and 1920, the statewide raisin crop nearly doubled, from 91,000 tons to 174,000 tons.⁴⁰

Then came 1922, when the raisin industry got into trouble again—and this time, took Lord & Thomas along for the ride—a story we’ll return to later.