A Short History of Pure Foods

Few food brands in the Philippines have achieved widespread recognition and support quite as much as Purefoods. Many of us were weaned on the brand’s classic Tender Juicy hotdogs as kids and eventually stocked our freezers with the distinctly red frankfurter, as well as our kitchen shelves with other canned and processed Purefoods food products, as adults.

But have you ever stopped to wonder about the history of Purefoods? The food manufacturing company has had a long and fascinating story as a distinctly Filipino food brand, changing ownership hands over the years, but always involved in providing quality food products to generations of consumers.

Today, Purefoods is a brand under the listed company San Miguel Food and Beverage Inc., offering products that are market leaders in segments like hotdogs, other processed meat, and canned and fresh products.

Here’s a short history of Purefoods.

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History of Purefoods

Purefoods traces its beginnings in October 31, 1956, when the company known as Pure Foods Corporation, which sold processed meats, was incorporated in Mandaluyong City. The company’s founders included Manuel Fong, Ismael Mathay Jr., Lee Ngan, Pablo Cutaoco, Gregorio Tung and Miguel Ortigas but was led by a man named Joseph Henry Ng, a locally born Chinese and supermarket executive.

From the beginning, Pure Foods’ main business was the manufacture of hot dogs and other meat products. By 1961, Ng had turned over the company to other businessmen, until, in 1965, the Ayala Group became Pure Foods’ biggest stockholder.

In 1972, with a 13 percent capital subscription from the Ayala Group, the Pure Foods diversified further into pork processing and even ventured into the production of canned tuna for export to the United States. The company also benefited from technical assistance, as well as an undisclosed financial interest, from GA Hormel, an American food manufacturing company.

Pure Foods formally became a subsidiary of the Ayala Group in 1981, after the latter bought up shares in the former from other domestic investors. According to a research paper by Japanese economist Kenji Koike published in the early 1990s, the Ayala Group "vigorously pursued" a diversification strategy for Pure Foods that helped turned it into the third-largest general foods company behind only giants San Miguel Corp and RFM Corp.

That diversification strategy included entering the chicken broiler business in 1984, shrimp farming and processing for export to the Japanese market in 1986; and then wheat flour-milling business by the end of the decade. In fact, by February 1991, Pure Foods opened a new mill with an annual production capacity of 137,500 tons.

Smokey’s, Coney Island, and Burger King

Meanwhile, in 1982, Pure Foods had also expanded into the fast-food restaurant industry by opening the Smokey’s food stall chain, which mainly sold arguably the company’s bestseller: its hotdogs. According to Koike, from 10 outlets in 1985, Smokey’s had a chain of 152 outlets in 1990 and bringing in sales of P100 million.

Pure Foods continued its expansion strategy in 1991 when it acquired the Coney Island chain of ice cream shops from Seamark Enterprise Corp., which is also the company responsible for other well-known food products in the Philippines over the years, like Whammos and Go Nuts Donuts.

By 1991, according to Koike’s research, Pure Foods was processing 53 million birds annually for its broiler business, which was impressive at the time considering that it had only entered the business in 1984. At that point, it was enough to put it in contention with Vitarich for third place in terms of market share, behind industry leaders San Miguel and RFM. Meanwhile, in its meat processing business, in the year 1990, the company had captured 50.2 percent market share for hot dogs (versus 26 percent for RFM), 44.6 percent for ham (RFM 18.7 percent), 53.7 percent for bacon (RFM 18.7 percent) and 45 percent for sausages (Philips Corp. 30.6 percent).

In the late 1980s and throughout the 1990s, Pure Foods, under the Ayala Group, continued its market dominance in the country through a mix of product innovations and innovative marketing efforts. The company entered the Philippine Basketball Association as a franchise team in 1988, taking the spot vacated by Tanduay. In 1997, the Ayala Group, through Pure Foods, also acquired the local franchise of quick service restaurant chain Burger King. It operated the chain up until 2006, when it sold the franchise to a group of businessmen led by Manny Pangilinan. (Today the local Burger King franchise is owned by Jollibee Foods Corp).

In December 1998, Pure Foods strengthened its partnership with Hormel by spinning off its processed foods division into a joint venture to produce and market a variety of canned foods and refrigerated meats. The joint venture, which was called The Purefoods-Hormel Company, was 60 percent owned by Pure Foods, with the remaining 40 percent owned by Hormel, which is perhaps best-known as the maker of the Spam brand of canned goods. It was Hormel’s largest joint venture outside of the United States.

The joint venture produced good results for both companies; by the next year, the company’s share in the competitive hotdog market rose from 44.6 percent to 49.5 percent, while refrigerated meats also increased 52 percent in volume tonnage.

Acquisition by San Miguel

However, in 2001, fierce competitor San Miguel confirmed talks of acquiring Pure Foods-Hormel from the Ayalas. News reports at the time said San Miguel was looking to fortify its leadership in the country’s food and beverage market, while the Ayala Group sought to streamline its interests and unload its food business to focus on its key strengths of real estate, banking and finance, and its burgeoning telecoms business. By May of that year, the deal had been consummated, with reports saying San Miguel paid P7 billion for the deal, which was lower than the reported P15 billion that the Ayalas had been seeking.

San Miguel Corp’s acquisition of Pure Foods made San Miguel the country’s undisputed leader in F&B manufacturing. The conglomerate consolidated its food business around the new acquisition and renamed the new unit San Miguel Pure Foods Company Inc. By that time, the unit included operations in breeding, contract growing, processing, and marketing of chicken, pork and beef, as well as the manufacture of refrigerated, canned and ready-to-cook meat products, ice cream, butter, cheese, margarine, oils and fats, as well as animal and aquatic feeds.

In 2017, in an effort to further streamline and consolidate its F&B business, San Miguel reorganized its food and beverage business through a share swap deal involving San Miguel Brewery, which manufactures beer and non-alcoholic beverages (such as San Miguel Pale Pilsen, Red Horse, San Mig Light and Gold Eagle), and Ginebra San Miguel Inc., which produces spirits such as gin, Chinese wine, brandy, vodka, rum and others. By June 2018, San Miguel Pure Foods Company Inc. had been renamed San Miguel Food and Beverage Inc. (SMFB) to reflect its expansion into the beer and non-alcoholic beverage business.

Today, SMFB’s three main business units include beer and non-alcoholic beverages, spirits, and food. While the Company operates its beverage business through SMB and its subsidiaries and GSMI and its subsidiaries, its food segment is further divided into several other subsidiaries, including San Miguel Foods, Inc., Magnolia Inc., and The Purefoods-Hormel Company, Inc. The group’s lineup of well-known brands included Magnolia for chicken, ice cream and dairy products, Monterey for fresh and marinated meats, Star and Dari Crème for margarine, San Mig Coffee for coffee and B-Meg for animal feeds, and Purefoods for refrigerated processed meats and canned meats.

Although Pure Foods is now a unit of a unit of a much larger conglomerate, the brand lives on in its range of products—such as Tender Juicy hotdogs and canned Corned Beef—that consumers have been enjoying and will likely continue to enjoy for generations to come.