White Castle Systems holds a prominent place in fast-food history and pop culture. Its ubiquitous Sliders turn 90 this year.
It is, even its most ardent fans would likely attest, an acquired taste. A small, thin, square burger redolent of onions and sitting on a soft white bun with little adornment beyond the rehydrated onions upon which it was steamed, a pair of pickles and a dollop of mustard.
A White Castle burger "is a distinctive product, and usually you find that people either love them or they hate them, and there's no ambivalence," says company President and CEO E.W. "Bill" Ingram. Those who love White Castle really love it. Last year, Cravers--as the company dubbed its devotees--scarfed down more than half a billion Original Sliders from restaurants, grocery stores, movie theaters and vending machines.
Founded in 1921 in Wichita, Kan., and relocated to Columbus in 1934, White Castle was the first hamburger restaurant chain in the United States, the first to sell 1 million hamburgers, the first to sell 1 billion hamburgers and the first to sell frozen fast food. It has since been eclipsed in size by other chains, but White Castle remains a cult favorite. McDonald's is considerably larger--more than 33,000 restaurants worldwide, compared to White Castle's 400-plus--but White Castle holds its own, with per-store sales trailing only those Golden Arches.
In an industry in which tenure is typically measured by the month, White Castle employees often spend years on the job, their loyalty rivaled only by that of customers, who vie for entry into the Cravers Hall of Fame or to submit their Slider-employing recipes to an annual cook-off. (The prize? A free 30-burger "Crave Case" every week for a year.)
As it has been from the start, the business is owned by the Ingram family; White Castle Systems remains privately held and debt-free. This year, White Castle celebrates its 90th birthday. Family members say it's well-positioned to continue another 90 years, evolving to meet the demands of its customers while remaining true to its founder's vision.
The Birth of an Industry
Ninety years ago, hamburgers were thought of in much the same manner fair food is today: delicious, relatively inexpensive, but not something to feed your family on a regular basis. Company founder E.W. "Billy" Ingram set out to change that. In 1921, Ingram entered the burger biz in partnership with restaurateur J. Walter Anderson, who conceived of the flattened meatball that would become White Castle's signature Slider.
Ingram shaped everything from the name (with "White" connoting purity and "Castle" evoking strength and stability) to the restaurant layout: White Castle employees ground their own meat from high-grade cuts of beef in public view. "He was the one who took it from being a disreputable, fun, working-class food to being kind of a mainstream American food, and he did it very consciously," says Heidelberg University history professor David Gerard Hogan, who in 1997 wrote Selling 'Em by the Sack, a history of the chain and its role in America's fast-food industry.
In 1930, White Castle partnered with the University of Minnesota to prove that a person could live on nothing more than hamburgers and water. According to a 2008 story in the university's medical bulletin, for 13 weeks medical student Bernard Flesche maintained good health while eating as many as 24 Sliders a day. The study was a significant part of White Castle's early advertising. (Less oft-noted in White Castle lore: after the study, Flesche "never willingly ate hamburgers again," his daughter said in the story.)
To convince Americans to purchase the burgers and expand its carryout business, White Castle pioneered the use of the newspaper coupon, running an advertisement in St. Louis in June 1932 that was good for a carryout order of five hamburgers for 10 cents (the burgers cost 5 cents in stores). According to Ohio Historical Society records, "The offer was an overwhelming success and helped the company introduce its hamburger to a wide audience." White Castle also reached out with employee Julia Joyce, who traveled to restaurants, giving tours to local housewives, samples to women's clubs and menus suggesting foods to accompany the burgers.
Billy Ingram, who bought out Anderson in 1933, introduced White Castle's signature five-holed burgers, which allow the frozen patties to cook evenly on a bed of onions without being flipped. He also developed the stainless steel spatula and pushed for uniform production of food from restaurant to restaurant. Unhappy with the cost of laundering employees' linen hats, Ingram also came up with disposable hats, founding subsidiary Paperlynen Company.
Paperlynen's machine could make 1,000 caps an hour, producing a year's supply for every U.S. White Castle in only 10 days. Salesmen sold the remaining supply to butchers, bakers, ice-cream vendors and, in 1956, the "I Like Ike" campaign. That year, Paperlynen was set to sell 50 million caps, Time magazine reported. Another White Castle Systems subsidiary, the Porcelain Steel Building Company, manufactured porcelain enamel and stainless steel products, including the restaurant buildings themselves, and later, products for other businesses.
While Paperlynen is no more, White Castle continues to utilize vertical integration. Its manufacturing subsidiary, now known as PSB, no longer makes buildings, but produces fixtures and parts for White Castle restaurants and other customers. White Castle Systems has its own frozen food division, WCD Food Products, as well as its own bakeries and meat plants. In 2010, White Castle Systems' consolidated net sales from restaurants, PSB and frozen food division topped more than $614 million, with restaurants bringing in more than $520 million, the company reported.
Billy Ingram died in 1966; his grandson, Bill, now leads the company with future generations of Ingrams waiting in the wings.
White Castle laid the path for today's fast-food landscape, but Billy Ingram's decision not to franchise or take on debt kept the chain relatively small. Hogan says opting out of franchising may have kept the family from becoming billionaires, but likely helped its longevity, too: "I guess it's just like the stock market. If you stay with safe stocks, you're always going to thrive."
White Castle's growth has been slow but steady, with a handful of restaurants added each year. Management team members "don't go for immediate results. They look at the long-term, they look at stability over time," says Nick Zuk, senior vice president and general counsel.
"I think our emphasis from the get-go has been, ‘We don't need to be the biggest, but we want to be the best,' " says Jamie Richardson, vice president of government, shareholder and community relations, who married into the business (wife Kate is a fourth-generation family member).
The exception to White Castle's growth pattern came in the late 1980s and early '90s, when the company made a short-lived foray into international licensing in countries such as Korea, Hong Kong and Mexico. Explains Richardson, "Ultimately, the uncertainty of the international arena made global expansion less appealing than continuing to increase presence in the United States." Almost simultaneously, the creation of the frozen food division proved very successful. Richardson says the 25-year-old division has provided much of the company's recent growth and allows White Castle to serve customers in places where it doesn't have restaurants.
Burgers remain the core of White Castle's business: In 2010, 551,188,255 of them were sold through restaurant and frozen-food sales. There are 420 White Castle restaurants in 12 states (the company recently re-entered Pennsylvania); frozen Sliders are sold in all 50 states.
White Castle employs 11 family members and nearly 10,000 people, including 300 at its headquarters on Goodale Avenue, near Grandview Heights. In addition to the corporate offices, there's a manufacturing facility headed up by David Rife, Billy Ingram's great-grandson and assistant vice president of manufacturing and general manager of PSB, which manufactures parts for household appliance and lawn-care clients such as Whirlpool, The Scotts Company and Bosch. PSB also has plants in Dayton and in Rome, Ga. About 50 people work at the Columbus location; Dayton and Rome collectively employ about 100 more.
Rife, who worked at White Castle in high school and college before working in banking and construction, returned to the family business 16 years ago as an assistant shift manager. "I'm very proud that the family members and everybody really get that immersion behind the counter, and so we have a good understanding of what's going on," he says.
Rife's cousin Lisa Ingram, chief operating officer and great-granddaughter of Billy Ingram, is responsible for the restaurant division, site development and acquisition, and marketing. She worked for White Castle as a high school student and for a brief time after graduating from Southern Methodist University. After several years at a variety of Texas companies, she has spent the last 11 years at White Castle.
John Kelley, chief people officer and a fourth-generation family member, started at White Castle 19 years ago. He says family members know there are "people out here that have your back, are going to support you in the things you're trying to undertake." White Castle hosts an annual meeting among Ingram descendents. "We have family members who have chosen not to work at the company ... so we want to make sure they're well-informed as stakeholders," he says.
Even non-Ingrams say working at White Castle is like working among family. "There isn't one family member that doesn't treat you well. ... They're just good people, and when you're working with and for good people--well, I really feel blessed," says Zuk, a 27-year employee.
Rob Camp, vice president and general manager of White Castle's frozen food division, is a 26-year employee and the only non-family division head. Camp says the Ingrams respect execs' ideas and opinions. Bill Ingram "is willing to try things and let people bring ideas to him, and if you have all of your facts and a logical progression, he'll say, ‘OK, let's go forward with this.' Bill has been a very good boss in letting you run the company as you see fit,' " Camp says.
"Culture here is very much about family, and not just the family that owns it. We have team members whose parents have worked for us, whose siblings have worked for us, whose children have worked for us, and so there are hundreds of families that work for White Castle and that's something that's important to us, something that we see as a benefit," says Lisa Ingram.
In September, White Castle inducted 89 workers into its 25-year club. The annual tradition began in 1946, when Billy Ingram celebrated his 25th year at the helm. Since then, nearly 1,600 White Castle team members have earned the recognition; 746 still work at the company.
Although White Castle has a significant role in U.S. culinary history (chicken rings, anyone?), "White Castle gets little respect, even by fast-food standards. Its little square burgers and turreted restaurants have become something of a pop-culture punch line, stuck somewhere between white-trash chic and ironic kitsch," the New York Times wrote in 2004.
White Castle's leadership was once shy about its position in pop culture-it refused to allow its name to be used in the 1990 Susan Sarandon/James Spader film "White Palace"--but has recently embraced its unique image. (That film is now among the entries on a "Pop Culture" tab on the company website, www.whitecastle.com, which brags "we're famous.") White Castle established its Cravers Hall of Fame in celebration of its 80th anniversary; inductees from all over the country have shared their Slider love. The Hall of Fame's 80 members include the stars of "Harold & Kumar Go to White Castle," a movie that followed a pair of twenty-something men who get stoned, get the munchies and, after seeing a TV commercial for White Castle, go on a quest for its burgers.
"We like to think that we get a chance to provide memorable moments and fun times for people, so if along the way we're not afraid of being made fun of a little bit for that, we're OK with it," Richardson says.
Among the memorable moments that Castle fans crave: A reservations-required, candlelit Valentine's Day dinner with waiters, introduced in 1991.
Last year, White Castle began selling $13 Original Slider-scented candles, packaged in a ceramic holder mimicking the burger's signature cardboard sleeve. The initial run of 10,000 candles sold out in less than 48 hours. "It actually started out as a joke," says Bill Ingram, with friends Harry and Laura Slatkin. Laura Slatkin owns NEST Fragrances, which created the candles.
Also in 2010, the company took the plunge into reality television on the CBS show "Undercover Boss." Viewers watched as Rife--the oldest fourth-generation family member--worked the assembly line at a White Castle bakery (destroying 4,800 buns in the process), manned the cash register during a busy late-night rush and prepared cheeseburgers for the frozen food division.
Rife was tapped for the show because the company feared Ingram would be recognized. The experience was "one of the scariest things I've ever done; it was also one of the most rewarding," Rife says. Team members felt secure speaking their minds, "and when they speak their minds, we get great ideas that help us progress and make ourselves a little better every day."
As a result of the episode, White Castle now covers co-pays for preventative health care and is exploring a pilot health fair program. One team member, José Gonzales, received a $20,000 culinary school scholarship from White Castle (augmented with an additional $10,000 from the National Restaurant Association); his salsa verde recipe is being tested as a potential burger topping. Another, Joe Brown, helped shape a company training program, was promoted to crew manager and received $5,000 to help his visually-impaired son.
White Castle managers sit on 22 local nonprofit boards, and both the company and the Ingram-White Castle Foundation give to a variety of causes. The primary corporate charitable interest is autism research and education. "We're really doing all we can to help raise awareness and funds so there can be a greater understanding of how this impacts individuals and families," says Richardson.
Fourteen years ago, Chris Ingram, the now-18-year-old son of Bill and Marci Ingram, was diagnosed with autism. In January, the Ingrams pledged $10 million to the Ohio State University Medical Center and Nationwide Children's Hospital, creating the Marci and Bill Ingram Research Fund for Autism Spectrum Disorders.
Kim Niederst, area director of Walk Now for Autism Speaks, says Marci Ingram and the White Castle family "were an integral part" of bringing the walk to Columbus four years ago.
Additionally, net proceeds from Slider candle sales benefit Autism Speaks. As of late August, the candles--along with a campaign in White Castle restaurants--had raised more than $1 million. "They get involved with us in every which way they can, and the support has been nothing short of phenomenal," says Scott Leibowitz, national director of corporate relations for Autism Speaks.
White Castle continues to innovate. Last summer, it began experimenting with "Brand in Brand," three new concepts within individual White Castle restaurants: sandwich shop Deckers, "modern barbeque" Blaze and Mediterranean/Asian-based Laughing Noodle. "The customer responses have been very positive on the food, on the new décor, the service, everything," says Lisa Ingram.
Does White Castle have aspirations to conquer all 50 states? Not so much. "That's something we wrestle with," she says. Part of White Castle's appeal is that it's hard to get. "Right now, I think our strategy is we want to remain a regional restaurant company."
No matter what the future holds, the Ingram family will be there. In Bill Ingram's office is a small black-and-white photograph of his grandfather, sitting behind the same desk, in front of the same window where Bill now works. Ingram, 61, will retire at 65 per company policy; nine members of the fourth generation work for the business, but a successor has not yet been chosen. In the meantime, a fifth generation is well on its way--Rife's eldest son just completed a summer internship at White Castle. "Hopefully, we'll see him back in a few years, once he graduates," Rife says.
"I think if you look at the management team in place at White Castle Systems, I think everybody really understands that as managers, we are helping develop our potential replacements," Rife says. "And if we can make them better than we are, then we've really done a great job, because that means our company will be better, long-term, and it really helps ensure the longevity and the growth."
In the meantime, a little training on boxing up buns at the bakery might not hurt.
Jennifer Wray is a staff writer for Columbus C.E.O.
Reprinted from the November 2011 issue of Columbus C.E.O. Copyright © Columbus C.E.O.