Mutual Growth: The Story of McDonalds and OSI Industries

This is a story about the rise of OSI Industries and McDonald’s. OSI and McDonalds have shared a mutual bond since inception; it all goes back to one handshake.

OSI Industries started as Otto & Sons, a small butcher shop in Western Chicago. Otto & Sons catered to restaurants and community members in a small community in Chicago. The butcher shop/wholesale business was the brainchild of Otto Kolschowsky (the Otto in Otto & Sons.) He started it fresh off the boat as a German immigrant that came over in the Great German Migration. In 1909, a mere two years after arrival, he started a butcher shop. Eventually, his sons became older and their names were added to Ottos.

The butcher shop stayed local for years and years. It operated with Chicago clientele in mind, and Otto had no plans of expansion beyond his local butcher shop. His sons, however, had bigger plans in mind. In 1955 Kroc was about to open his first McDonalds franchise. He met with young Harry and Arthur — the two Sons of Otto & Sons — and made a handshake deal. This deal was that Otto & Sons would become the exclusive beef provider for his franchise McDonald’s.

Two years later Kroc bought out the McDonalds brothers and expanded McDonald’s across the globe. Soon McDonald’s were popping up in communities reaching to California to New York and back. Keeping true to his word, Kroc only purchased his beef from Otto & Sons. To meet the demand that McDonald’s had, which was enormous, Otto & Sons had to expand. They started propping up factories across America in an effort to meet the growing demand for fast-food.

Once McDonald’s went global, Otto & Sons realized that they would have to do the same. The name was shed. A reminder of the past and the future, the butcher shop turned wholesaler dropped its family name and adopted the name OSI Industries to signify its rapid growth.

Today OSI Industries stands firm. The private company has $6.1 billion in sales and provides McDonald’s, Burger King, Subway, Papa Johns, Starbucks, and many other food service restaurants their food products. It all goes back to a handshake deal between Ray Kroc and the two sons. One German immigrant’s business exploded into a massive multi-national corporation with factories spanning the globe and an employee force to match. Two companies pushed each-other to the limits and both came out richer, bigger, and more powerful than ever.

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