Newspaper article The Florida Times Union

Dairy Success Helped Penney Survive

Newspaper article The Florida Times Union

Dairy Success Helped Penney Survive

Article excerpt

Byline: Mary Jo McTammany, Special to the Times-Union

Luckily for Clay County, J.C. Penney didn't turn tail and run when, in the late 1920s, his financial empire threatened to crumble and take his failing progressive farmers cooperative at Penny Farms with it.

It was Hoover Times, as locals called the Great Depression, and the stock market was collapsing. Lesser men jumped out of tall buildings or absconded with scavenged assets and left others to deal with the consequences.

Penney and business partner Ralph Gwinn focused on the dairy business, a relatively successful portion of the co-op farm project. In February 1929, Foremost Dairy Products was born. The dairy at Penney Farms was combined with 50 small dairies and ice cream plants scattered over four states, Florida, Georgia, Alabama and South Carolina, with headquarters in Jacksonville.

The plan was doomed from the start by geography and a weak organizational framework causing operating costs to soar. Bankers pushed for further expansion. Penney sought another solution.

Here is where luck comes into the story. By an almost uncanny convergence of events and circumstances, the right man to pull the fat out of the fire entered the picture -- Paul Reinhold.

In 1931, Reinhold was fresh from parlaying Liberty Dairy into a lucrative buyout by Beatrice Foods. Experienced in the dairy business and multiple-site management for other people, he was anxious to be part of the ownership. Here was a go-getter with a successful track record wanting a piece of a very questionable pie. The deal was done.

Reinhold had a golden touch, as well as commanding presence. Well over 6 feet tall with a deep, resonant voice, Reinhold both charmed and commanded respect. Dynamic and tireless, he set about the task of saving Foremost.

Gwinn had already reduced the appalling debt by returning a significant number of plants to their former owners. …

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