Melitta Unternehmensgruppe Bentz Kg Business Information, Profile, and History

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History of Melitta Unternehmensgruppe Bentz Kg

Melitta Unternehmensgruppe Bentz KG is the holding company of the Germany-based Melitta group of companies, a leading European manufacturer of roasted coffee, coffee filters, and coffee makers marketed under the "Melitta" brand. Melitta's SystemService division sells professional coffee makers and related equipment to the catering and hospitality industries. Besides its coffee-related products and services, Melitta makes food wrapping products under the "Toppits," "Albal," "Glad," and "Handy Bag" labels and household cleaning products under the "Swirl" and "gameo" brands. Melitta also produces tea-related products and specialty papers and owns a 25 percent share in German beverage manufacturer Eckes-Granini GmbH & Co. KG. Three-fifths of the company's revenues come from Germany, another quarter from Europe, and about 15 percent stem from sales in North and South America. Melitta's network of about 50 production plants and sales offices spans the globe, including Russia and China. Three grandsons of the company founder own and manage the family business.

A New Kind of Coffee Filter in 1908

Not very often does a housewife lay the groundwork for a commercial empire, but that was exactly what happened in the case of Melitta. Melitta was the name of company founder Amalie Auguste Melitta Bentz, the daughter of a bookstore owner in Dresden, Germany, who had married Johannes Emil Hugo Bentz, the son of a school director. Melitta raised their two boys--Willy and Horst--as a homemaker, while Hugo Bentz provided for the family, working as a manager at a Dresden department store. Melitta Benz enjoyed drinking a cup of coffee once in a while, but was unsatisfied with the bitter coffee ground found in the beverage, which the brewing methods of the time were not able to filter out. The metal or porcelain sieves used to do the job either let too much coffee ground into the cup, or they were so narrow that the coffee was cold by the time all the water had passed through. One day, Melitta Benz had an idea: She took an old brass pot, cut a few holes into the bottom with a nail and a hammer, took a sheet of blotting paper out of her eldest son's writing book and put it into the pot. The first Melitta coffee filter was born. To make sure that nobody could steal her idea, Melitta Benz took her invention to the Royal Patent office in Berlin. On June 20, 1908, the authority granted her legal protection for the "coffee filter with filtration paper" as a registered utility good. Six months later, Melitta and Hugo Bentz registered a home-based business with a capital of less than DM1. They transformed a small room in their four-bedroom apartment in Dresden into a "coffee filter workshop" and got to work.

To get the endeavor off the ground, the Bentz family had to be energetic and creative. Hugo Bentz gave up his position at the department store, and he and Melitta worked full time at their small family business operation, joined by their two sons after school. They bought the metal filters and filter paper from local suppliers, assembled the coffee filters and packaged them for sale. Their sons delivered cartons with coffee filter paper using a small trailer. Hugo Bentz demonstrated the use of the new coffee filters in shopping windows, a task that was later delegated to sales-savvy women hired for the job. Melitta Bentz invited a group of female friends to have coffee in her home, where she demonstrated her new invention. In 1911, the Melitta coffee filter received gold and silver medals at the renowned international Dresden Hygiene Exhibition. In the same year, Melitta Bentz gave birth to their daughter Hertha. Soon the business operation had to be moved to a bigger room in the Bentz family's residence and, not long after, even that room became too small.

Moving to New Headquarters in 1929

Just when business started taking off in earnest, it came to a sudden halt. In 1914, World War I broke out. The German government rationed paper and stopped coffee imports. Hugo Bentz was drafted into the German army. In that situation, continuing the coffee filter production had become impossible. Melitta Bentz kept the business running by selling cartons. In 1915, the business was moved into an old locksmith workshop in Dresden's Wildermannstrasse. After the war had ended in 1919, the coffee filter business took off again. In 1922, the Bentz family began exporting their coffee filters to Czechoslovakia and Switzerland. One year later, they officially registered their company under "Bentz & Sohn." By 1925, a number of competitors had emerged that imitated "Melitta" coffee filters. To make the original distinguishable from the "fakes," Melitta launched a distinct package design characterized by bright red and green colors. This design principle prevailed into the next century. In 1926, the company started a new promotional campaign, sending "coffee filter demonstrators" on a national tour of major household appliance stores.

By the end of the 1920s, Melitta's business had once more outgrown its location. However, a bigger one could not be found in Dresden at that time. In a stroke of luck, while traveling in Westphalia, Melitta and Hugo Bentz spotted an old chocolate factory in the small town of Minden. They bought the factory and moved their business with 55 employees to Minden in spring 1929, registering their firm at that time as Melitta Bentz. Later the name was changed again to Bentz & Sohn. The city of Minden gave the business a head-start by waiving taxes on profits for the first five years. That came just at the right time, since Germany had entered a severe economic downturn. In February 1932, Melitta and Hugo Bentz retired from active participation in the family business and transferred the company to their two sons. The company was transformed into Melitta-Werke AG and a new logo launched for the "Melitta" brand.

Willy and Horst Bentz expanded the business during the 1930s. Besides selling coffee filters and filter paper to consumers, they also ventured into the hospitality industry. At the same time, the company's product range broadened, including aluminum and ceramic filters besides the original brass version. In addition, the shape of the filters and filter papers was constantly improved. The year 1932 saw the introduction of so-called "fast-drip-filters," square filter paper that was pushed into the filter with the help of plungers. Five years later the company introduced a coffee filter with a conical shape and inner-wall grooves with matching filter bags, for which the company received a patent in 1937. In the same year, the company included waxed paper for wrapping sandwiches into its range of products. In 1938, the first Melitta commercial for a new fast-drip filter was shown at German movie theaters.

Expansion Follows World War II

The onset of World War II, in September 1939, once again interrupted Melitta's development. The company had just acquired a paper factory in Kreuznau near Düren to meet the rising demand for coffee filter paper. However, the production of civil goods was restricted by the German government, and the company had to produce war goods such as ammunition belts and cookware for the army. The company's production plants and office buildings were left untouched by the war, but immediately after it ended they were confiscated and occupied by the Allied Forces. For the twelve years that this situation lasted, the company used temporary sites to keep their operation up and running, sometimes using the back-rooms of restaurants. Hugo Bentz died in January 1946, only a few months after the war had ended. Melitta Bentz witnessed the postwar reconstruction and the beginning of a dynamic upswing for the business operation she had started. In 1950, the year of her death, her company was grossing DM4.7 million.

The economic boom that followed World War II lasted for more than two decades. During these times of dynamic growth, Melitta tried hard to keep up with demand in a seller's market where orders had to be restricted to serve as many customers as possible. The constant cash flowing from sales that grew at two-digit rates enabled the company to make major investments in its production infrastructure, to expand its product range and to conquer new markets abroad. In the late 1950s, Melitta built a brand-new paper factory for its filter papers. In the early 1960s, the company began manufacturing food wrapping paper, lunch bags, plastic and aluminum wrapping foil, and cleaning cloths. A decade later, Melitta added vacuum cleaner bags to its range of products. However, the imagination of CEO Horst Bentz did not stop there. He envisioned a company that could supply anything that goes on a set table, including porcelain dishes, juices, candy, and cigars. According to this vision, Melitta acquired a number of smaller companies and shareholdings.

While extending its product range, the company also extended its reach, at first into Western Europe. In 1960, Melitta established its first subsidiary overseas in Canada. During the 1960s and 1970s, paper factories and coffee roasting facilities were set up in the United States and Brazil. While expanding its business, the company kept refining its coffee filters and the ways to market them. In the 1950s, Melitta changed the filter design which--according to the latest trends--were made of stoneware with a pastel finish. German customers were encouraged to try out the new fast-drip filters at home for four weeks before they had to pay for them. During the 1960s, Melitta demonstrated its filters at trade shows attended by the general public, serving over two million cups of coffee. In 1962, the company launched ground coffee in a vacuum pack for the first time. Later in the decade, new filters in different sizes were introduced that made it possible to brew a certain number of cups when filling the filter up to the rim. After heat-resistant plastics had been invented, Melitta filters made from that new material were introduced. In 1965, Melitta launched its first coffee maker, the machines that began replacing the hand filter. The company also began manufacturing coffee makers for professional caterers, including a new pyramid-shaped filter. By the end of the 1970s the Melitta group of companies employed 10,000 people. Annual sales had grown to DM 1.6 billion--three hundred and fifty times as much as in 1950.

Consolidating in the 1980s-90s

The expansion of the 1950s, 1960s, and 1970s came with a price tag. While sales had exploded, cost followed suit. By the late 1980s, the company was in the red. In 1988, Melitta redefined its strategic positioning in five core markets, and each of them got its own brand. "Melitta" remained the main brand for coffee and coffee related products; "Toppits" was the brand for wrapping products to keep food fresh and tasty; "Swirl" was the label for cleaning-related products such as vacuum cleaner bags; "Cilia" was the brand name for tea and related products; and "Aclimat" the label for products in the area of home furnishings.

On the other hand, the company disengaged from many other activities that did not fit into one of these core areas, including porcelain, candy, fruit juices, and cigars. In 1990, a management holding was established, and the operative business split into legally independent firms. One area that was strengthened was paper production. In 1992, Melitta acquired German specialty paper manufacturer Neu Kaliss Spezialpapierwerke. To cut cost, the company's coffee maker production was moved to Portugal. In 1996, the food wrapping products division was brought into a joint venture with Dow Brands Europe, a subsidiary of Dow Chemical, and renamed Cofresco Frischhalteprodukte GmbH & Co. KG, with Melitta owning a 65-percent share. German electric appliances manufacturer Miele & Cie. acquired half of Melitta's coffee maker production subsidiary in China to include vacuum cleaners in its product range, while the North American coffeemaker production was sold off to small appliances maker Regal Ware. Melitta's French subsidiary acquired the Codiac group, a supplier of parts for electric household appliances, to break into the French market for vacuum cleaner bags. Another new venture, the production of biodegradable foil, was abandoned and sold.

Besides coffee filters and coffee makers, selling roasted coffee became an ever growing part of Melitta's business. At first the raw coffee was roasted in Minden, until, in 1966, the company acquired Bremen-based coffee roaster Carl Ronning. While Germany was the company's major market for coffee, Melitta also started roasting and selling it in Brazil and the United States. Up until 1991, the company's Brazilian subsidiary produced losses. However, by 1995 the Melitta brand had a four percent market share--the second largest among the many competing coffee roasters. In 1995, the company even opened several dozen coffee shops on the East Coast of the United States and in Florida under the name "Coffee World." Rather than competing with the country's leading specialty coffee chains, Melitta was hoping that these stores would raise American consumers' awareness for the brand which would then--hopefully--translate into higher supermarket sales. Meanwhile the coffee market in Germany reached a saturation point with the beginning of the 1990s. Competition became fierce and prices declined, but Melitta was able to compete with the German market leader. In 1999, the company launched a new advertising campaign which had been developed for over a year behind closed doors. In 2002, Melitta was Germany's second largest vendor of roasted coffee to the country's grocery stores. Melitta also succeeded in marketing its vacuum cleaner bags to grocery store chains. In addition, the company made private-label coffee paper filters for retail chains to utilize its production capacity. By 2001, private-label production accounted for one quarter of Melitta's total paper filter production.

At the beginning of a new century, Melitta's position in its core markets was strong. However, the markets themselves were saturated. The company's search for new markets with high growth potential had largely failed. Horst Bentz' sons Jörg, Stephan, and Thomas owned and managed the company by taking turns in their respective areas of responsibility in order to foster among them a better understanding of the whole operation. Looking ahead, the three grandsons of company founder Melitta Bentz saw the business expand its core activities mainly into other European countries, especially France, the United Kingdom, Spain, Poland and Russia. Other impulses were expected to come from product innovations, such as non-stick-aluminum baking foil, new kinds of coffee filters and coffee makers, and new coffee specialties. Whether or not their children would carry on the family leadership for another generation had yet to be determined.

Principal Subsidiaries: Melitta Bentz KG; Melitta Haushaltsprodukte GmbH & Co. KG; Melitta Kaffee GmbH; Melitta Ges.mbH (Austria); Melitta GmbH (Switzerland); Melitta France S.A.S.; Melitta N.V. (Belgium); Melitta Nederland (Netherlands); Melitta Scandinavia A/S (Denmark); Melitta Scandinavia AB (Sweden); Delphy Industries S.A.S. (France); Codiac France S.A.S. (France, 49%); Vriesco Plastics B.V. (Netherlands); Primafilter B.V. (Netherlands); West-Clean AB (Sweden); Gameo AB (Sweden); Coffee Club Franchise B.V. (Netherlands, 75%); Melitta Emballages Ménagers Distribution S.A.S. (France); Melitta Russland AG (Russia); Melitta Chicago Review s.r.o. (Czech Republic); Melitta do Brasil Industria e Commercio Ltda. (Brazil); Melitta North America Inc. (United States); Melitta SystemService GmbH & Co. KG; Cofresco Frischhalteprodukte GmbH & Co. KG (65%); Melitta Beratungs- und Verwaltungs GmbH & Co. KG; Melitta Pacific Ltd. (China).

Principal Competitors: Tchibo Holding AG; Jacobs Kraft Foods International, Inc.; Alois Dallmayr KG; Nestlé Beverages; Starbucks Corporation; Luigi Lavazza S.p.A.; Sara Lee Beverage; Whitbread PLC; Miele & Cie. GmbH & Co. KG; WMF Württembergische Metallwarenfabrik AG; Moulinex S.A.

Chronology

• Key Dates:
• 1908: Melitta Bentz receives legal protection for the coffee filters she invented and starts her own business.
• 1923: The company Bentz & Sohn is officially registered.
• 1925: Melitta introduces the red-green packaging design.
• 1929: The business is moved from Dresden to Minden.
• 1937: The company receives a patent for its conical coffee filter and filter paper.
• 1960: Melitta's first subsidiary abroad is established in Canada.
• 1962: The company launches ground coffee in a vacuum pack.
• 1963: Melitta introduces its own line of food wrapping products.
• 1968: Melitta enters the Brazilian market.
• 1971: The company starts selling vacuum cleaner bags.
• 1990: The company reorganizes, and a management holding company is established.
• 1992: The company acquires specialty paper manufacturer Neu Kaliss Spezialpapierwerke.
• 1996: The food wrapping products division Cofresco Frischhalteprodukte GmbH & Co. KG is formed.
• 2001: IT-service firm is established as a joint venture with software firm Syskoplan AG.