d me the actual founding was sometime in the spring," Thomas S. Haggai, chairman and chief executive officer of IGA, told SN.
This year, IGA marks its 70th year of existence. It now licenses 3,600 stores worldwide, including nearly 500 outside the United States in 23 countries, and is targeting expansion in South Africa, Thailand and Eastern Europe in the next few years -- a long way from Poughkeepsie, N.Y., where it was born in 1926.
IGA was founded in 1926 under the guidance of J. Frank Grimes, a Chicago-based accountant who specialized in auditing the books of wholesale grocers. Haggai, who knew Grimes personally, said he was "one of the people I have met in my lifetime who would have been totally contemporary in each of the decades that IGA has been in existence. "[Grimes] was a man of significant religious convictions; the practice of his faith did not allow for negative thinking. He did not accept bad news as final, and he used good news as adrenaline," Haggai explained. "Thus he would not and could not address the question, 'Will the independent survive?' Such an implied weakness was foreign to him."
The impetus for founding IGA was Grimes' concern about the way chains were dominating the grocery business in the early 1920s, tripling from 7,500 stores in 1920 to more than 21,000 in 1925. His solution was the Independent Grocers Alliance, an organization enabling independents to unite via a nationwide network of wholesalers and buy goods in larger volumes at a lower cost -- giving them chainlike purchasing power.
Grimes worked out some of the details of the IGA concept on a train trip from Chicago to Poughkeepsie, accompanied by H.V. Swenson, a merchandising specialist, and Gene Flack, a public relations executive. Their destination was the Poughkeepsie YMCA, where they proposed to organize IGA. A retailer present at that meeting recalled, "The Chief [as Grimes was known] spread it on thick what we were going to accomplish. Eventually we would have everything under our own label, which would compete with the chains."
After that meeting, 69 retailers signed up as IGA's first members, with wholesaler W.T. Reynolds Co. as their distributor. By the end of 1926, IGA had licensed 150 stores in 15 states. By 1929, IGA was producing a private-label line that included coffee, flour, macaroni and margarine, and in 1930 it began sponsoring a national radio show called, "The IGA Home Town Hour," which promoted IGA-brand products.
During the Depression, IGA survived in part by promoting its brand with pitches from celebrities, including baseball slugger Babe Ruth, actor Jackie Cooper, boxer Jack Dempsey and cartoon hero Popeye. Even Japan's Emperor Hirohito was quoted during a U.S. visit saying he had enjoyed a cup of IGA tea.
Another 1930s promotion was "One Girl in a Million," a radio soap opera that "put the powerful force of radio to work selling more groceries to more women by strumming on their heartstrings," according to a 1936 article in IGA's magazine, Grocergram. The program featured Sally May, who became known as the IGA girl. In one tie-in that offered listeners free photo enlargements in exchange for labels from IGA products, May modeled a dress made from the thousands of labels sent in to IGA's Chicago offices.
By 1941, IGA-brand merchandise totaled more than 1,300 products, and retailers at IGA's 15th annual membership conference that year were encouraged to promote the top 15 IGA items, with $7,500 worth of defense bonds awarded to retailers who met the promotion's sales goals. Also in 1941, IGA created a miniature state-of-the-art store at its Chicago office to encourage modernization. In 1945, after World War II ended, it introduced its larger and more complete supermarket under the name, "Foodliner." The Foodliner format was designed to handle more frozen foods, based on Grimes' belief that frozen foods, dairy products and other fresh products would represent as much as 80% of a store's volume in the near future. In 1946, IGA introduced the so-called "precision" store designed to optimize sales by channeling customers past all merchandise to reach the dairy and bread sections. After the postwar baby boom, IGA in the early 1950s encouraged retailers to install a one-stop section for all baby needs, and the Grocergram warned, "If. . . you determine that most of your shoppers have passed middle age, beware! Regardless of your present volume and profits, you are bound to suffer seriously in a few years as death thins them out."
Grimes gave up the day-to-day responsibilities of IGA president in 1951 and turned the title over to his son, Don Grimes, in 1952.
IGA had expanded its licensing arrangements to Canada in 1940, and by 1964, there were 760 IGA grocers there. However, it became clear that differing food regulations, competitive conditions and shopping habits were making it difficult to coordinate programs in the United States and Canada, so in 1964 Canada's IGA distributors traded in their shares to form an autonomous IGA Canada.
By the time Don Grimes retired as president in 1968, IGA had 4,000 stores in 46 states with sales of $3 billion, and 10 years later sales of IGA retailers reached $4.7 billion. Grimes was succeeded by Richard J. Jones, president of J.M. Jones Co., Urbana, Ill., one of IGA's wholesaler-owners, and in 1973 Jones was succeeded by William Olsen, originally hired as IGA's director of perishables.
In 1976, the post of chairman, which had rotated among various wholesalers, was assigned permanently to Haggai -- a lecturer, author and minister whose national radio show, "Values for Living," was sponsored by IGA. He was the first person from outside the food industry to hold an IGA board position. When Olsen retired in 1986, Haggai added the titles of president and chief executive officer.
IGA's retailers developed the "Hometown Proud" concept in 1987 as a way to leverage the goodwill they were generating through their community involvement. The slogan has since evolved into an operating philosophy that is reflected in IGA's growth overseas, where operators in each nation substitute the name of the country in the slogan -- for example "Singapore Proud" or "China Proud."
In 1988, representatives from Tokyo-based C. Itoh Food Systems Co. approached IGA about introducing its store concept in Japan, Davids of Australia requested the same later that year. Subsequent partnerships were signed with distributors and retail companies in Korea, Singapore, China, Malaysia, Indonesia, India and Brazil, where IGA will operate its first franchised (rather than licensed) stores because of the lack of a single dominant wholesale distributor.
Also, the Quincy, Fla., division of Minneapolis-based Supervalu, an IGA wholesaler, developed international customers in the Caribbean islands of Puerto Rico, Anguilla, Antigua, St. Kitts, Grenada, Turks & Caicos, Dominica, Trinidad and St. Vincent.
In 1992, IGA and Coca-Cola Co.'s international division launched a training project in the Pacific Rim called IGA University -- a retail training affiliate designed to share knowledge of food distribution with retailers and wholesalers, regardless of their affiliation with IGA. It also aimed to help develop human resource skills and to facilitate global business growth.
At IGAU, students receive instruction ranging from modern marketing and merchandising techniques to how to apply makeup for a professional appearance. IGAU has trained more than 25,000 people in Asia since 1992, including nearly 19,000 last year, Haggai said.
In conjunction with Coca-Cola and Louisiana Pacific Corp., IGA also kicked off its Hometown Trees program in 1992. The environmental project is designed to encourage local IGA retailers to work with community groups to plant seedlings in nearby parks and playgrounds. Since its inception, Hometown Trees has resulted in the planting of 4 million trees nationwide, including 1 million planted April 22, 1995, the 25th anniversary of Earth Day.
IGA launched its first national and international TV advertising campaign in 1993 on the Turner Broadcasting Networks, which include CNN, Headline News, TNT and TBS. More than 3,500 spots have aired since then, showing that J. Frank Grimes' train trip from Chicago to Poughkeepsie 70 years ago continues to wield global influence.