Thermos Company
Address:
1555 Route 75 East
Freeport, Illinois 61032
U.S.A.
Telephone: (815) 232-2111
Fax: (815) 233-6377
Statistics:
Wholly Owned Subsidiary of Nippon Sanso Corp.
Incorporated: 1907 as American Thermos Bottle Company
Employees: 1,400
Sales: $200 million (1995 est.)
SICs: 3631 Household Cooking Equipment; 3086 Plastics Foam Products
Company History:
Although Thermos Company may be best known for its line of vacuum-insulated bottles and lunch boxes, the Illinois-based manufacturer is also a leading maker of barbecue grills, coolers, carafes, and other household products based on its thermal technology. In fact, the largest portion of Thermos's estimated $200 million in annual sales is thought to come from its gas and electric barbecue units, which generally sell at the midrange and premium price categories. Thermos continues to dominate the U.S. lunch kit market, holding onto about 50 percent of the approximately $39 million spent on lunch kits each year. As part of the worldwide Thermos Group of Products under parent company Nippon Sanso Corp. of Japan, the company combines award-winning product designs, such as its electric barbecue grill introduced in 1993 and its thermal cooker introduced in 1994, with one of the United States' oldest brand names.
Early History
Vacuum insulation, a technology that allows hot things to stay hot and cold things to stay cold, was invented in 1892 by the English scientist James Dewar. Dewar was studying the properties of liquid gases, that is, gases held below the temperature at which they become liquid, and he needed a way to keep the gases cold enough to remain in their liquid form. Dewar discovered that sealing one glass bottle inside another and removing the air between the two bottles gave him the temperature retention he sought. He named this discovery vacuum insulation and his device the vacuum bottle. Dewar did not patent his device, however.
Commercial development of Dewar's invention came at the turn of the century. The German company, Burger and Aschenbrenner, became the first to adapt the vacuum bottle for commercial purposes, forming Thermos GmBH in 1904. The name Thermos came as a result of a contest; it was submitted by a resident of Munich, Germany who derived the term from the Greek word "therme," or heat. In 1905, a British company, A. E. Gutman, was given United Kingdom distribution rights; the following year, Gutman registered the Thermos name as a trademark in England and, by 1907, had registered the Thermos trademark throughout the United Kingdom and in other countries around the world. In that year, William Walker founded the American Thermos Bottle Company in Brooklyn, New York, acquiring the German company's patent and taking over its U.S. business. Sales in 1907 reached $115,000.
Becoming a Household Word:The Early 20th Century
American Thermos set out to popularize the Thermos name as a synonym for the vacuum bottle. By 1910, the company could claim in its catalog that Thermos had become a "household word," using the word Thermos not as an adjective for the company's vacuum bottles, but as a noun signifying the vacuum bottle itself. This marketing strategy would indeed create a household name for Thermos but would later come to haunt the company. Sales had tripled to $381,000, however, by 1910. In 1913, American Thermos moved its headquarters to Norwich, Connecticut.
The Thermos name continued to gain in popularity, and the company continued to encourage identification of the Thermos name with the product itself. By 1917, the company could assure its retailers that the public's use of the word Thermos when referring to vacuum bottles was worth three to four million dollars in free advertising. Thermos products were already becoming part of history, traveling with Robert Peary on his discovery of the North Pole, and forming part of the equipment of such aviation pioneers as the Wright Brothers and Count Zeppelin.
The terms "aspirin," "escalator," and "cellophane" also began as trademarks, but quickly passed into generic use. American Thermos soon faced a similar problem. As early as 1922, the company brought suit against W. T. Grant Co. for using the word Thermos to describe the latter company's own vacuum bottles. In that case, American Thermos won on a technicality: in its defense, it neglected to claim that Thermos had become a generic word. The decision rendered by the U.S. District Court in Massachusetts, however, stated that "there is no evidence that Thermos means to the public vacuum bottles produced by the plaintiff."
With sales nearing $1.5 million by 1923, American Thermos set out to protect its trademark, including registering its logo, adding the words "vacuum bottles" or "vacuum jugs" to its advertising, and raising the prominence of the trademark symbol beside its name. During the 1920s, the company also acquired two of its competitors, the Icy Hot Bottle Company in 1925 and the Keapsit Company in 1929. The company also acquired the majority interest in the Thermos company established by Gutman in the United Kingdom.
American Thermos succeeded in gaining recognition for its trademark in the industry, and it actively protected the trademark against commercial infringement. From 1935, the company employed a clipping service to seek out unauthorized references to the Thermos name in the trade and in advertising. Yet the word Thermos continued to be used as a generic word by the general public; it even began to appear in some dictionaries. Thermos protested these uses when it discovered them, but many hundreds of instances escaped the company's attention. At the same time, the company's protests were largely ignored by the nontrade users of the thermos term, and the company generally made no further attempts to enforce compliance.
Sales in 1936 topped $2.5 million and would double again by 1945. But the company continued to be aware of the threat to its trademark. In a 1940 memorandum, company officials raised concerns about the addition of the word "thermos" to many dictionaries, arguing that "this undoubtedly would be cited against us in a lawsuit to defend the trademark. The best we can do is to try to 'purify' the definition of the word." Yet the company let enforcement of the trademark slip during World War II, fearing negative publicity. After the war, American Thermos attempted to reinforce its trademark among the trade and advertisers. By 1952, however, the company feared that pressing a trademark infringement suit would result in losing Thermos's trademark status. Meanwhile, the company enjoyed the benefits of the strength of its name. As the market for vacuum products grew in the years following the war, Thermos's sales grew as well, from $5.3 million in 1945 to more than $13 million by the end of the 1950s.
A boost to company sales came with the introduction of its first licensed lunch kits. Prior to 1953, Thermos had been selling comparatively drab, green-painted tin lunch boxes. But, in that year, the company produced a lunch kit featuring popular performers Roy Rogers and Dale Evans painted on the box and bottle. More than 2.5 million of the Rogers-Evans kits were sold, and an American school tradition began. During the 1950s, as well, the company attempted to separate the Thermos name from the vacuum bottle itself by broadening its production to include tents, bottle openers, firelighters, lanterns, camping stoves, and other products, each bearing the Thermos name. In 1954, the company's name was changed to American Thermos Products Company to reinforce Thermos as a brand name, not a specific product.
Losing the Trademark in the 1950s
American Thermos stepped up its efforts to protect the Thermos name in the late 1950s. The company's protests rose from less than 200 in 1957 to nearly 1,200 in 1961. But these efforts were too little, too late. Inevitably, another company would attempt to market its own vacuum bottles as thermos bottles.
That company was Aladdin Industries, which introduced its own vacuum bottles in 1945, with sales growing from $560,000 in that year to nearly $7 million by 1960. In 1958, Aladdin announced its intention to market a line of vacuum bottles as "thermos bottles." American Thermos sued Aladdin for trademark infringement in that year.
In 1962, Judge Robert Anderson rendered his decision: "thermos" was indeed a generic word. According to Anderson's decision, American Thermos, which by then had been acquired, along with its Canadian and British subsidiaries, by King-Seeley and renamed King-Seeley Thermos Company, had itself contributed to the popularization of the word thermos as a synonym for vacuum bottles, while failing in its diligence to enforce its trademark rights. Aladdin was granted the right to add the word "thermos," in lowercase only, to its thermos bottles. Thermos retained its "Thermos" brand name.
Expanding the Company
Despite this setback, Thermos remained one of the most popular brand names in the United States and continued to hold the lead in thermos sales. In 1965, King-Seeley Thermos acquired Structo Manufacturing Company, which had been founded in 1907 as Thompson Manufacturing Company in Freeport, Illinois. Structo, which manufactured children's toys for most of its history, added production of barbecue grills in 1960. Three years after the Structo purchase, King-Seeley Thermos was itself acquired by Household International as a subsidiary.
In 1969, King-Seeley Thermos acquired the Halsey Taylor Company, a maker of drinking fountains and water coolers. Six years later, Structo dropped its other products to focus on making barbecue grills exclusively, becoming a leader in that market. The following year, Structo was consolidated into King-Seeley Thermos, which took over production of barbecues under the Structo name.
By the beginning of the 1980s, the Thermos division was producing the bulk of Household International's $125 million in consumer products sales. Sales of its glass-lined thermos products were under pressure, however, as the rise of coffee makers and other appliances began to replace the need for thermoses and as new, more durable stainless steel thermoses began to eat into the sales of glass-lined thermoses. The company introduced new products, including glass-lined carafes, to take up slumping thermos sales. In 1984, Thermos shut down its Norwich, Connecticut operations and moved the company's headquarters to Illinois. Two years later, Household International, by then renamed Household Manufacturing, finally merged Thermos and Structo, forming the Thermos Company. The combined companies would reach $188 million in sales by 1988.
By the end of the 1980s, however, Household moved to exit manufacturing, reforming as Household Finance. Thermos was sold to Nippon Sanso Corp. of Japan for $134 million in 1989. Sanso, a leading maker of industrial gases and other products, also manufactured its own premium-priced thermoses, which would later be sold under the Nissan Thermos brand name. In 1990, Monte Peterson, formerly with Coleman Co., was named president and CEO of the new subsidiary.
Restructured for the 1990s
Through the 1980s, Thermos's sales stagnated. Its share of the thermal-insulated market, worth about $150 million in 1989, had dropped to one-third. By then, however, the company's barbecue grills were driving the company's growth, representing more than 60 percent of annual sales. Under Peterson, Thermos set out to improve its position by coming up with new product designs. Peterson reformed the company from its former bureaucratic structure, in which the company was organized by function, into an interdisciplinary team structure. This allowed Thermos to create and begin to market its new Thermal Electric Grill in less than two years. The grill would go on to win several new product awards, and it produced strong immediate sales.
Thermos also worked to reinvent the lunch box. After a failed attempt at a reusable lunch bag (children complained because their food would get crushed), Thermos introduced several new designs, including a rock-shaped "Flintstones" lunch box, purse-style lunch kits, and futuristic lunch box styles that allowed it not only to maintain its popularity among younger children, but also to increase its share of the older children's market. The company also presented its SoftThermos, a collapsible cooler. Licensing arrangements for such characters as the Teenage Mutant Ninja Turtles, the perennial bestseller Barbie, Batman, and Pocahontas helped the company maintain its leadership in the lunch box market through the first half of the 1990s, a market estimated at around $40 million per year.
Peterson left the company in 1995 and was replaced by Douglas Blair. In 1995, Blair stated his intention to build up the company's marketing efforts and redirect sales efforts from its premium-priced line to the company's mid-priced products. Growth at Thermos, however, seemed to be slow over the past decade, with sales in 1995 estimated to have reached only around $200 million. With strong competition from Weber, Sunbeam, and others in the more than $1 billion barbecue market, further growth for Thermos appeared most likely in developing new products using its thermal insulation technology and ever-popular brand name.
Further Reading:
American Thermos Prod. Co. v. Aladdin Industries, Inc., 207 F.Supp. 9 (1962).
Buursma, Bruce, "Pursuing Air-Tight Strategies," Chicago Tribune, June 3, 1990, Bus. Sec., p. 3.
Diamond, Sidney A., "Thermos' Trademark Passes into the Language," Advertising Age, August 13, 1962, p. 56.
Dumane, Brian, "Payoff from the New Management," Fortune, December 13, 1993, p. 103.
Mandernach, Mark, "Thermos Box Packs a Punch with Lunch," Chicago Tribune, October 22, 1995, Tempo Sec., p. 1.
"Modern Problems Spur Changes at Thermos," New York Times, October 22, 1984, p. D1.
Murphy, H. Lee, "Hot Stuff: Thermos Deal Creates U.S.-Japan Giant," Crain's Chicago Business, July 17, 1989, p. 29.
Stankevich, Debby Garbato, "Making Thermos Hotter," HFN: The Weekly Newspaper for the Home Furnishing Network, May 29, 1995, p. 31.
Warner, Fara, "Message in a Bottle: Thermos Updates Its Image," Brandweek, January 31, 1994, p. 32.
Source: International Directory of Company Histories, Vol. 16. St. James Press, 1997.
