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Joan Kroc's bequest of $1.5 billion to the Salvation Army, one of the largest single philanthropic gifts ever made, hit the front page of every newspaper in the country in 2004. The huge endowment came from a fortune accumulated in the last half of the 20th century, a fortune that traces its origin to McDonald's Corp., the global icon of Americana, a company with worldwide sales approaching $57 billion generated by more than 32,000 restaurants with 1.6 million employees in 117 countries. Remarkably, it all started in 1954 with 15-cent hamburgers, 10-cent fries, 20-cent milkshakes, and a salesman extraordinaire, Ray Kroc.
Born in 1902 in Oak Park, on the outskirts of Chicago, Ray Albert Kroc dropped out of high school to serve as an ambulance driver for the Red Cross during the Great War. He subsequently became a salesman at the Lily Tulip Cup Co. sales organization, rising to become sales manager for the Midwest. While selling Lily cups he met Earl Prince, inventor of the five-spindle Multimixer, a speedy and efficient milk shake mixer. Intrigued by the product, and determined to strike out on his own, Kroc acquired exclusive marketing rights to the Multimixer. He plunged into his sales efforts with a vengeance; baseball was his only diversion.
In 1954 the 52-year-old Prince Castle Multimixer milkshake machine salesman from Illinois heard about Dick and Mac McDonald's Southern California restaurant. It had just ordered eight units of his five-spindle machine. That meant they were making as many as 40 shakes at a time, an impressive number for a small restaurant. Kroc decided to pay them a visit.
"I went to see the McDonald operation," Kroc recalled. "I can't pretend to know what it is--certainly, it's not some divine vision," he continued. "Perhaps it's a combination of your background and experience, your instincts, your dreams."
What he found and went for profoundly revolutionized the restaurant industry and changed our lives, from what we eat, to how and where we eat it. Families switched from home-cooked meals to dining out. And his company, McDonald's, became a symbol -- not always favorable -- of globalization, attracting the gamut from kids to anyone with a gripe against America.
The McDonalds, 1930 transplants from New Hampshire, started their restaurant in San Bernardino, CA in 1948 with a limited menu of burgers, fries, soft drinks and shakes at rock-bottom prices. Workers clad in white paper hats and white uniforms, worked methodically in an assembly-line-like process, delivering orders in a minute or less. As Forbes put it: "In short, the brothers brought efficiency to a slap-dash business." The McDonalds ran a tight ship, using paper dishes and cups and plastic utensils. It was not a drive-in; they wanted to reduce costs by eliminating car hops and seating.
"This had to be the most amazing merchandising operation I'd ever seen," Kroc wrote in his book, "Grinding It Out." "That night in my motel room I did a lot of heavy thinking about what I'd seen during the day. Visions of McDonald's restaurants dotting crossroads all over the country paraded through my brain."
But Kroc, like Henry Ford, took the product, tweaked it, refined the method of producing and marketing it -- and in the process created a new industry and a new culture. Ford did it with cars; Kroc did it with fast food. "When I saw it working that day in 1954, I felt like some latter-day Newton who'd just had an Idaho potato caromed off his skull," Kroc recalled. This was not a vision born of fantasy, but one culminating from 30 years of selling products to every conceivable restaurant operation in existence.