Town of Marion recognizes 'Home of Mountain Dew'
Ex-salesman was promoter of special drink
by Glenna Elledge, Wednesday 7/27/94 issue of Smyth County News. Reprinted without permission.
The incredible story of Bill Jones and how he developed Mountain Dew, a soft drink that has continued for 30 years to be among the top 10 best sellers on a world-wide market, has all the elements of an American success tale.
The Mountain Dew story begain in 1925 when William H. (Bill) Jones, who originally hailed from Mississippi, went to work for the National Fruit Flavor Co. of New Orleans as a salesman. He bagan calling on bottling companies to sell the flavors that were the base for the concentrate used in the production of soft drinks.
Jones had a pleasant air about him and he quickly established a reputation as a man's man; which in masculine lingo meant that he enjoyed fishing and hunting and that he was equally capable of closing a good business deal while playing 18 holes of golf. The fruit flavor salesman also had a way of spinning a good tale in a delightful manner that made him a happy hour favorite. He sold flavors for soft drinks, but he gave away laughter. Many of the bottlers that he called on as a flavor salesman became not only business associates but life-long friends.
In 1928, Jones left the employment of the National Fruit Flavor Co. to work for the Coca-Cola Bottling Co. of Oklahoma. A year later he rejoined the National Fruit Flavor Co. where he continued to work for the next 15 years. Among his regular customers who became good friends during this period were A.A. (Ollie) and Barney Harman of Knoxville, Wythe M. Hull Jr., with the Marion Bottling Co., Clay F. Church with the Dr. Pepper Bottling Co. of Marion, and Herman Minges of Lumberton, N.C. Herman, his father, Edwin, and his five brothers held Pepsi-Cola bottling franchises throughout North Carolina and much of the South.
On July 18, 1944, when Clay P. Church, then president of the Dr. Pepper Bottling Co. of Marion, established the Tip Corp. of America, Bill Jones became a stockholder in the new business and Church named him as Tip manager, a position that paid minimal wages along with regular award of Tip common stock. Stockholders and members of the Tip board of directors at the time the corporation was formed were: Clay F. Church, who owned 135 shares of Tip common stock, C.C. Lincoln, 135, J.D. Lincoln, 135, N.S. Forester, 135, and William H. Jones, 60 shares, for a total of 600 shares.
According to Wythe M. Hull Jr., Tip was organized for the purpose of marketing and selling a grape drink as a competitor to Grapette, a drink that was doing well on the soft drink market. Unfortunately, the United States and much of the world moved into a recession after the end of World War II, and problems were experienced from the beginning with marketing the product. There was another factor involved; Tip was a great little soft drink in a regional market. At the time, flavors could not be patented or otherwise legally protected. Soon after a small company placed a popular syrup on the market, it was being copied and sold by firms with a large market base.
According to Hugh Slagle, treasurer of Marion Bottling Co., flavoring is to the soft drink something along the line of what extract is to the cake; the difference is that a soft drink formula starts out with the flavoring, various ingredients are added and an extract is produced. Tip Corp. produced the extract and owned the trademark for its grape drink.
|Slagle also explained that a firm with a soft drink that had a trademark
for its extract could enter into franchise agreements with bottling companies
to bottle only their particular brand of a soft drink. These franchise
agreements often prohibited a bottling company from distributing other
products that used the same flavor base. For example, the major colas all
use a cola base; it is the ingredients used to produce the extract that
are different. The Tip Corp. had the facilities only for making the
extract which was then sold to bottling companies who added water and sugar
to produce a syrup. The syrup was then mixed with carbonated water,
bottled and the product sold on the market.
During his years as a salesman for National Fruit, when in Knoxville Jones always called on the Harman brothers, A.A. and Barney. According to his son, Tony, A.A. was known as Ally, Allie, or Ollie. A.A. and Barney owned and operated Hartman Beverages in Knoxville. Ollie and Barney operated the business as though everyone was a member of one, big happy family. The workday ended with a happy hour in the office. When the plant shut down, the employees headed for the bar and a friendly get-together with the Hartmans. Salesman associated with the bottling business made it a point to call at Hartman Beverages around quitting time.
Ollie Hartman bottled a special mixer for his bar, a lithiated lemon-lime drink that blended smoothly with Tennessee whiskey for a house special. At the time, R.C. Cola used a lithiated lemon concentrate to make Upper 10 and the base for the still popular 7-Up was also a lithiated lemon-lime concentrate.
Someone suggested to Ollie Hartman that he should market his mixer. "Something this good should be sold commercially," a salesman said. There was a general agreement and a lively conversation ensued. "Okay," Ollie said "say we go commercial, what shall we call it?"
These were the years when moonshine flowed from stills in Virginia and Tennessee. Jokes made the rounds about the illegal alcoholic beverage that was sometimes called "White Lightning," and at other times, because the illegal brew was as plentiful as early morning dew on the mountain, it was laughingly referred to as "Mountain Dew." In response to Ollie's question, someone quipped "Mountain Dew." Everyone laughed, but the name stuck.
Emery Framback, a salesman for Owen Illinois Glass Works, volunteered that his firm would produce the bottles. A crown salesman said his firm would make the Mountain Dew cap. Ollie and Barney Hartman subsequently and sometime around 1950 granted the Mountain Dew bottling franchise for the Knoxville area to Jack and Charles Gordon of Tri-City Beverage in Johnson City. Tri-City's Mountain Dew franchise granted them the exclusive right to sell Mountain Dew in an area within 150 miles of Knoxville. The drink was a moderate success, but ran its course within a few years.
While the Hartmans' and Tri-City Beverage were attempting to create a market for Mountain Dew, Bill Jones became increasingly aware of the fact that the Tip Corp. was in financial trouble. The minutes of the company's board of directors meeting held on Jan. 6, 1948 indicate that the issue of 300 new shares was authorized.
Francis Alice Wilson, the youngest daughter of Bill Jones, explained during a recent interview that it was not long into the venture that her father realized he had bought into a bad situation.
"Tip was a small company with a limited number of stockholders. There were lots and lots of bills and very little income," she said.
Hull, in his story of the Marion Bottling Co., Inc., commented that Jones found the Tip Corp. to be heavily in dept and loaded down with promises and commitments that could not be kept. Unable to stem the decline in sale of the company's main product, Tip, he also found himself to be the manager of a major finanicial headache. After Church's personal and business affairs forced him to take bankruptcy, Hull wrote, Jones found himself encumbered with a corporation that could not meet its obligations.
It was during this period, Hull said, that word was passed around that two of the original stockholders in the Tip Corp. who had signed several thousand dollars worth of notes on behalf of the corporation, were unhappy. The two Tip stockholders were offering to give their stock in the company to anyone who would relieve them of the obligations incurred in their endorsement of the notes. This, Hull said, is when Jones undertook a major effort and actually secured refinancing for the Tip Corp.
John Gales Sauls, an FBI agent now assigned to the Virginia area, who became so intrigued by the unique Mountin Dew label that he followed the trail of clues to discover where the drink originated, worte that the trail led him to Herman Minges, owner and operator of the Pepsi-Cola Bottling Co. in Lumberton, N.C.
According to Herman Minges, Sauls wrote, by early 1958, Bill Jones was calling on a few friends, all Pepsi bottlers he had been associated with for years, and he was asking them to invest capital to save Tip. Herman Minges maintained that he chipped in out of friendship and stated that he never expected to see the money again. The Lumberton, N.C. bottler held the theory that it was also friendship that motivated the other contributors, Sauls noted in his story.
By today's standards, the amount of financial investment was small. Herman Minges, his brother Richard B. Minges of Fayetteville, N.C., Allie Hartman of Knoxville, Tenn., Wythe Hull of Marion, and Bill Jones each contributed $1,500. For $7,500 the Tip Corp of America was refinanced and reorganized on Aug. 28, 1957. Stockholders in the business venture were now W.M. Hull, Jr. with 140 shares, W.H. Jones 140, Hartman Beverage Co., 140, Richard B. Minges, 140, and Herman S. Minges, 140, for a total of 700 shares of common stock.
Hugh Slagle shared office space with Wythe Hull and was present during a meeting that occurred between Hull, Bill Jones and Herman and Richard Minges prior to the reorganization. Jones had already been to Knoxville to talk with Allie Hartman, Slagle said, and Hartman had told Jones that he would make an investment in the reorganization and that he would also throw in a dormant trademark by the name of Mountain Dew.
In his account, Hull stated that Jones accepted Hartman's offer and that the trademark was subsequently transferred.
Slagle also pointed out that Tri-City Beverage in Johnson CIty had been given the franchise by the Hartmans for bottling and marketing Mountain Dew in a 150-mile area of Knoxville. Both Hull and Slagle have gone on record maintaining that at the time of the trademark transfer that Allie Hartman asked Bill Jones to honor the franchise with Tri-City and that Jones agreed.
In his account of the events that transpired prior to the Tip reorganization, Herman MInges told Sauls that Allie Harman "threw in a dormant trademark and bottle design he'd used for a drink he'd sold in Knoxville in the late '40s, Mountain Dew."
In his account, Slagle said that the capital raised by the reorganization was to pay off loans held by Buddy Forrester and Charles C. Lincoln. In his book, Hull did not identify the individuals, but stated that two of the original (Tip) stockholders had signed notes on behalf of the corporation for several thousands and were now offering to give their stock to anyone who could relieve them of their obligations. "Jones set about to refinance the Tip Corp.," Hull said, adding that the "proceeds of the sale of stock in the corporation paid off the notes against the Tip Corp. and left a modest sum for operating expenses."
According to Slagle, "When Tip was reorganized, there was no big fangle-dangle excitement and thinking, 'boys we've got something here and we are really going to make it big.' The new stockholders had the money to put out there and see what it would do. They did not expect any return. Helping their good friend, Bill Jones, was the idea. It was a very calm, unexciting transaction," Slagle said.
Herman Minges told John Sauls he had commented to Jones following the reorganization meeting that what Tip really needed was to come up with a formula for a great new soft drink. This was when Bill Jones assured him that he was already hard at work on the idea, Minges said.
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