5 Companies That Have Stood the Test of Time and How They Did It
Against all odds, some companies know how to keep the dough rolling.
Only 57 --or 11%-- of the original Fortune 500 have remained on the magazine's historical list since its inception in 1955.
Cracking the list in general is no easy feat. Fortune ranks the corporations in terms of gross revenue during the fiscal year, and the list is generally regarded as the 500 most powerful companies engaging in American business.
However, 89% of the companies from 1955 have either gone bankrupt, merged, or have dropped off the top Fortune 500 companies. In fact, many of the companies on the inaugural list are not recognizable today, such as Cone Mills, a Greensboro, N.C. based textile company or Armstrong Rubber, a New Haven, Conn.-based automobile supplier.
Some companies that lead their respective sectors in 1955 do not even make an appearance on the 2016 list, including Pullman Co. (a rail road car manufacturer best known for its sleeping cars), apparel retailer Burlington (BURL) - Get Report and Briggs Engineering (BGC) . Today, those industry leaders have been replaced with Nike (NKE) - Get Report , package delivery company UPS (UPS) - Get Report and engineering company Fluor (FLR) - Get Report . Other industries have seen the same companies dominate for years. In aerospace and defense, seven of the 11 companies currently on the Fortune 500 have remained on the list since 1955.
In order to remain on the list, the companies must stand the test of time, surviving volatile markets and changing consumer needs. They must also compete with giants like Citigroup (C) - Get Report and Walmart (WMT) - Get Report , both founded prior to the list's inception but currently ranking No. 29 and No.1, respectively.
Today, a firm on the Fortune 500 can expect to spend 15 years or lest on the prestigious list. This short life cycle is not necessarily bad for American economy, according Mark Perry, a scholar at the American Enterprise Institute, a conservative think tank in Washington D.C., and a professor of economics and finance at the University of Michigan. He cites "creative disruption" in which innovative young companies would disrupt older established companies.
"What you would get is a constant cycle of companies being created and destroyed and through this churning there would end up a lower prices for consumers," Perry said.
The theory is that as the kings of the market economy grow and more companies saturate the market, prices are driven down for consumers, a concept that benefits companies like Proctor & Gamble (PG) - Get Report and Pzfier (PFE) - Get Report , two veterans on the list ranked No. 34 and No. 55, respectively.
"Over time the composition of their products is always going to change," he said. "But people will still buy dishwasher liquid and medicine."
Here's how these five companies have continued to drive revenue.
Hormel Foods
, which owns popular American brands such as Spam and Skippy, has grown immensely in the past ten years. The food Austin, Minn-based food company's revenue has increased from $5.4 billion to $9.3 billion and earnings have doubled. Though known for its production of canned meat, Hormel now has a new line of healthier and creative food products, including turkey sticks and peanut butter snacks.
Through some big acquisitions, the company has diversified its product line. It has recently purchased Wholly Guacamole, Muscle Milk, Skippy peanut butter and Applegate Farms -- for a grand total of over $2 billion. Most recently, it agreed to purchase the nut-butter company Justin's for $286 million.
As a food producer, the industry has had to battle the natural elements, including grain shortages and viruses such as the avian flu, which impacted its supply of turkeys one year.
"For a company to remain profitable it's important to have a balance that allows you to offset things that are challenging," said president and chief operating officer Jim Snee. His company has been around for 125 years and he has worked there for over 20. "You need balance...of management, of products."
Johnson & Johnson
, which has been on the list for all 62 years, has seen revenues grow from $1.8 billion in 1955 to $74.3 billion today. The company has survived by corporating more than 250 companies as subsidiaries in its "family of companies," including HealthMedia and Independence Technology. The conglomerate divides itself into three major divisions: Consumer Healthcare, Medical Devices and Pharmaceuticals popular brand-name consumer products such as Band-Aids, Tylenol, Neutrogena skin products, Clean & Clear facial wash and Cuvee contact lenses.
Ernie Knewitz, a vice president at the company, works to combat one of the company's current challenges -- an aging population relying more heavily on healthcare, which is constrained for resources. "Providing affordable access to quality healthcare is one of society's greatest challenges," Knewitz. Therefore, the company looks to utilize technology to supplement a "well-care" model of products, including new models of engagement with insurers, payers and providers that "can improve the stakeholder's experience and patient's outcomes."
Abbott Laboratories
may be known to many as the health care company that developed the first HIV screening test, or the maker of Ensure meal replacement shakes. The Lake Bluff, Ill.- based company has extended its arm internationally throughout much of the 20th century. It has over 1500 employees in Pakistan and has offices in Italy and France. Then in the 1960s, the company expanded into Japan in a joint venture with Dainippon Pharmaceutical to create radio pharmaceuticals. The company also has a longtime presence in India through subsidiary Abbott India Limited, where it is India's largest healthcare products company.
One of the company's latest international venture came in 2014 when it agreed to acquire Chilean generic pharmaceutical company CFR in a $2.9 billion deal -- more than doubling its branded generic drugs business in Latin America, according to the company.
A month later, the company agreed to take over Russian pharmaceutical manufacturer Veropharm (Voronezh) in a deal worth $631 million, expanding its preexisting 1,400 person workforce Russia and planning a manufacturing presence in the nation.
Raytheon
benefits from being a part of a well-funded sector and American GDP staple -- defense. The company has around 630,000 employees around the world and makes about $25 billion in revenue, in large part from military contracts. The company is the fourth largest defense contractor in the United States and the fifth-largest military contractor in the world.
In order to grow its robotics arm, Raytheon acquired Sarcos in 2007 for an undisclosed amount. Two years later it acquired BBN Technologies and Applied Signal Technology.
Its most recent success has been beating rivals Lockheed Martin
and Northrop Grumman
for a contract to construct a long-range radar system for the US Air Force, which it entered into in October 2014 in a deal estimated to be worth $1 billion.
If any company can keep customers committed to buying cereal, it's Kellogg
. The company popularized for its appearances on cereal boxes across the company is now the world's second-largest snack food company after its acquisition of Pringles potato chips from Procter & Gamble
in 2012.
After hitting market lows in the early 1980s, the company switched gears to emphasize cereal's nutritional value and convenience as a breakfast food, introducing new products including Crispix, Raisin Squares and Nutri-Grain Biscuits. It also expanded internationally with the cereal Just Right for Australians and Genmai Flakes for Japan.
Kellogg has made some notable acquisitions throughout the past 20 years, including the Keebler Company, Morningstar Farms and Kashi divisions or subsidiaries. It is the owner of name brands such Cheez-Its, Famous Amos and Gardenburger.