Gerber 's Production Of Baby Food

Better Essays

Gerber is an enormous American corporation that specialized in the production of baby food was founded in 1928, by Daniel Gerber Sr. The company started in the small town of Fremont, Michigan. This little town turned to be the corporate headquarters for Gerber, who made millions of dollars a year. The core of Gerber’s product line consisted of 165 varieties of jarred baby food that the company distributed worldwide. Since Gerber introduced processed baby food, the company dominated the U.S. market, with 72% market share in 1991. With the addition of having 72% market share, in 1991 of the 4% of U.S. houses that has babies, Gerber reached a full 92% of them. They also had 90% of their sales coming from within the United States in 1991(the …show more content…

These were great points for Gerber to buy this plant, and by October 1st Gerber officials had signed a Purchase and Sale agreement. But by October 27th politics intervened, and the future of this deal was in jeopardy. The Gerber officials knew that at a minimum, the new government was going to want to renegotiate the Purchase and Sale agreement and take a tougher stance on the issues of ownership and taxation. They also believed that the new government would also tinker with existing policies on profit repatriation, currency devaluation, privatization and worker compensation, all of which had a serious impact on Gerber’s bottom line. A couple key facts stood out to me in this negotiation about acquiring Alima S.A. While negotiating, Gerber got to inspect the plant. While inspecting they found some comforting reasons to acquire the plant but also some points of concern. The location of the plant was both good and bad. The plant was in Rzeszow which was very close to 1987 disaster at Chernobyl, so they had to make sure the ground was not contaminated. Luckily for them, there was no contamination. Rzeszow was an agricultural center, surrounded by thousands of farmers who have been selling their fruits and vegetables to Alima for decades. But the crops would not exactly fit for Gerber’s use because the apples were too tart, and the carrots were not right for the baby food. Physically the Alima plant bore the strong

Get Access