|Gustavus Franklin Swift
was born on June 24, 1839, in West Sandwich (now Sagamore), Massachusetts. He began his career at the age of 14, when he went to work for an older brother who owned a butcher shop. At 16 he wanted to move to Boston, but his father convinced him to stay in Sagamore by offering him $20 to begin his own meat business. The younger Swift used $19 to purchase a heifer, which he then butchered and sold out of his father's wagon. He netted $10 out of the business, which he subsequently used to buy another heifer and repeat the process. A few months later he expanded his meat business by borrowing $400 from an uncle. By 1859 he had made enough money to open his own butcher shop in Eastham, Massachusetts. He subsequently hired another brother to run the Eastham shop while he used the profits from this market to open a second store in Barnstable. By working 16 hours a day and exhibiting great skill in judging the market value of the cattle he bought, Swift was able to make his business a huge success.
In 1869, Swift opened a meat market in Clinton, Massachusetts. Unlike most markets of the day, he displayed many different cuts of meat, and gave the most prominent spots to those cuts which customers were less likely to request. He also kept his store incredibly clean, something which was all but foreign to most other contemporary meat markets. The unusual marketing scheme worked, and before long the market was doing an annual volume of $35,000 to $40,000, a very impressive amount in those days.
Having already displayed great ability to make great beef cattle buying decisions, Swift formed partnerships with two men to buy cattle for them. Since cattle raising was not exactly a major operation in Massachusetts, however, Swift figured it would be much better to go where there were more cattle to choose from. He tried the cattle markets in Albany and Buffalo, New York, but subsequently determined that the largest, and therefore best, market lay in Chicago, and moved his family there in 1875.
Because it was rather expensive to ship live cattle, Swift next turned his attention to streamlining the shipping and handling part of his operation. He determined that the best way to do this was to slaughter the cattle in Chicago and ship only dressed beef, which would not only reduce freight costs but also eliminate the cost of feeding the live cattle during shipping. He tried his idea with one carload in the winter of 1877, and it was a success. But railroad car refrigeration technology was inadequate for the rest of the year, and even in the winter months often proved problematic -- a shipment might freeze in one city, then thaw out in another. One of Swift's cattle buying partners was wary of the idea and exited the partnership with a $30,000 buyout. Swift used some of that money to hire an engineer to perfect a refrigeration car that used circulating fresh air cooled by ice. He then found a company that agreed to build the cars he needed, and convinced it to let him pay 15 percent down and pay off the balance with his profits.
Before Swift could prove his concept, however, he had to overcome some rather formidable opposition. Consumers in Eastern cities first had to be convinced that meat slaughtered elsewhere was safe. Many markets in Swift's hometown region even boycotted his meat, warning of dire consequences to those daring to eat meat that wasn't slaughtered locally. Swift mounted large-scale advertising campaigns to win public confidence, while simultaneously making advantageous partnerships with local butchers, and managed to overcome this obstacle. The railroads were also opposed to Swift, since they could make far more money shipping live cattle than dressed beef. Forming a cartel against Swift, they began charging exorbitantly high prices for dressed meat. To counter this problem, Swift simply made a deal with the Grand Trunk Railway, whose line ran through Michigan and Canada and had never made much profit shipping cattle.
Swift and Company was officially incorporated in 1885, and almost immediately began growing at an impressive rate. Profits rose because of Swift's belief that cleanliness reduced spoilage and losses. He hired engineers and chemists to find uses for the by-products of cattle slaughter. And he was constantly working to make his plants more efficient. His was one of the first companies in modern business history to boast complete "vertical integration" -- it had departments for purchasing, production, shipping, sales, and marketing. After establishing plants in St. Louis, Kansas City, Omaha, Fort Worth, and other major cattle cities, Swift took his company international. He captured the British market, and exported beef via refigerated compartments on ships to distributing houses he established in Tokyo, Osaka, Shanghai, Hong Kong, Manila, Singapore, and Honolulu. Once he had revolutionized the packaged beef market, Swift expanded his operations to include pork and mutton products. By the beginning of the twentieth century Swift and Company was worth $25 million.
Gustavus Swift died in Chicago on March 29, 1903. Management of the company he founded remained in family hands into the 1980's, when it was bought by ConAgra.
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This page was last updated on 03/25/2013.