Knighthood in Flour; 200 YEARS LATER, KING ARTHUR STILL CLINGS TO CULINARY CAMELOT

In this era of merger mania, with big companies swallowing up little ones and even giants digesting each other, King Arthur Flour - the brand with the knight on a prancing black horse on the bag - is galloping off in the opposite direction.

Sands, Taylor & Wood, the oldest flour company in America, has been through the mill.

For nearly 200 years it has been selling an unbleached, high-protein product that it staunchly contends - and thousands of floury-fingered, applauding home bakers agree - is the unchallenged monarch of bread-baking flours.

As a family business, the company started out small in 1790. In the last two decades it bought up bakery-goods companies right and left, expanding like its own yeast dough. Sales growth was phenomenal - from a paltry $1 million in 1963 to $40 million last year.

Then board chairman Frank Edgar Sands II, a Harvard Business School graduate who masterminded the explosion, discovered to his surprise that ''it wasn't enjoyable.'' Bigger, to him, was not better after all. Small was indeed beautiful.

Now King Arthur is back to Square 1. Sands has divested his firm of all acquisitions except one frozen-dough company. In the process, he lopped his staff from 180 to 6 employees and moved his family from Lexington, Mass., to a slower-paced life in Vermont.

Does this mean curtains for the King? Quite the contrary. From Norwich, Vt., and an office in Boston Mr. Sands, with help from his wife, Brinna, is running this family business once again, as in its earliest days, as a purveyor of flour only.

And far from letting King Arthur abdicate, Sands is positioning his famous product for a new era of prosperity. He has hired a vigorous ad agency to give the King an even more dashing brand image. To the popular golden-white flour he is adding a line of stone-ground whole wheat flour. And he plans such other new King Arthur varieties as rye, pumpernickel, and cracked-wheat flours.

''The bigger you get,'' he says, ''the more compromises you are tempted to make, and the more problems you have that you can't attend to because of size. You begin to take arbitrary positions and you can't give all your energy and strength to one type of thing. You get tremendous economies with size, but you lose the exact thing we want to keep in King Arthur - the purity of the quality.''

Mr. Sands says he has often seen a high quality retail baker get bigger and then begin to take shortcuts. A salesman will come in and say: I'll save you $2 a pail on your doughnut jelly and your customers will never know the difference. ''And that's exactly the way they sell it,'' he explains. ''All of a sudden this baker looks at two bucks and figures: 'OK, I use 10 pails a week. I can save myself $1,000 a year and nobody will know the difference.' But in 10 years that baker is out of business.

''That's one of the reasons I made up my mind I wanted to spend the rest of my business life in something that I feel very strong and good about.''

How many people, he asks, spend their business hours at something that gives them an income but doesn't make them happy?

''We know we're providing a wonderful product for the people. That's a good feeling. I wouldn't want to be in it if I didn't feel that way,'' he says.

Frank Sands is the fifth generation of his family in the business. ''Every member of our family who has ever been in it, as far as I know, has had this very strong feeling for the product and the brand. We haven't looked at it as a business where profit is the important thing. There's been a bonding between our family and the product. We really feel that King Arthur is part of our family. Therefore, the reputation of the product relates to the reputation of our family. We're proud of both.''

The firm known today as Sands, Taylor & Wood was founded as Henry Wood & Son the year George Washington was inaugurated. There's been a Sands in the company since 1800.

Down on Boston's Long Wharf the firm began by selling imported English flour in barrels. Later it marketed flour from local mills. In 1890, with 100 years of experience under its belt, the company decided to branch out with a flour of its own. A problem: What to name it?

George E. Wood, one of the principals and an advertising genius of his day, attended a musical production of ''The Knights of the Round Table'' at Boston's old Mechanics Hall. He came away thinking that the sterling qualities of purity , honesty, strength, and fidelity to high ideals that made Camelot were the very qualities that fit the kind of flour his company wanted to market - the best quality, highest in protein, finest milled in the country, and offered, as Frank Sands expresses it, ''by people who are dead honest.''

So King Arthur Flour was born. And not only King Arthur: soon Queen Guinevere Cake Flour took a bow, followed on stage by Merlin Magic Doughnut Mix, Round Table Pastry Flour, and three bread flours - Sir Lancelot, Squire, and Excalibur. The whole legendary cast of Camelot had found new roles as appetite teasers.

And that, as Industry magazine once quipped, is ''why knighthood is in flour.''

For King Arthur's debut at the Boston Food Fair of 1896, Mr. Wood's yeasty imagination went wild. While his booth turned into a fairy castle, a rider - dressed like the King himself astride a black steed and carrying aloft a streaming white banner with a red cross - clattered through the streets of Boston to alert the populace to this noble new brand. Despite its slightly steeper price, King Arthur was an overnight hit.

Down through the years the ''King'' of flours, a regional product on sale only in New England, has held its own in a highly competitive market dominated by its chief jousting partners, Pillsbury, Gold Medal, and Robin Hood - all popular national brands. Only recently has King Arthur spilled - and successfully - over the border into the Albany and Syracuse markets of neighboring New York State.

It is common knowledge among bakers that what sets King Arthur apart and makes it such a favorite among home and commercial bread bakers is that it has more gluten in it than any other flour on the market. Gluten is that sticky vegetable protein found in all wheat flours that gives bread dough its cohesiveness and elasticity. The better the wheat, the more gluten. And the more gluten, the better the flour for making bread.

It was around 1900 that a revolution occurred in milling. New ''roller'' mills were introduced which could separate the endosperm (the part of the wheat berry that produces white flour) from the bran (the shell) and the wheat germ (the small kernel of the wheat which reproduces itself). The French buhrstones, then in use, could only grind up the entire wheat into a course whole-wheat meal.

Even so, a trifle of white flour would sift to the side of the revolving stones. White flour thus became a status symbol. With the advent of roller mills, the common man could eat like a king. So white flour rapidly supplanted whole wheat.

Flour must be aged for a minimum of 30 days for best baking results. But the industry soon discovered that bleaching the new flour to a stark white would age it instantly and thus save storage costs. In response to demand from commercial bakers, Sands, Taylor & Wood bleached some of its commercial varieties, but never its King Arthur family flour for home baking.

At the turn of the century when people did more physical labor than many do today, they were really packing in the bread, consuming about 250 pounds of flour per capita a year. But by the 1960s, family flour was a dying business, and per-capita consumption had plummeted to 107 pounds.

Even as early as the 1930s, long before women's lib was dreamed of, the woman in the kitchen was beginning to feel her oats. Bakery trucks were stopping all along residential streets early in the morning peddling ''store bought'' bread, cakes, and other goodies, and housewives were snapping them up.

This trend accelerated at the end of World War II when people had less rationing and more disposable income. The family flour business began a steady downward slide of about 5 percent a year.

The whole industry saw the writing on the wall. It accurately foresaw that women who had commenced their emancipation with war work in the factories would stay in the job market.

Home bread baking, the big companies allowed, was on its way out - a lost art. Therefore there was no need of a high-protein flour any longer since pies, cakes, and cookies don't need as much gluten as yeast bread. Tailoring their gluten to their perceived market, the big companies decreased the protein strength of their flour.

The Sands family took a different tack. Following the idealistic example of King Arthur himself, they stuck to their principles: an unbleached, high-protein , high-quality flour excellent for bread baking. It was a decision that would pay off later.

However, on Frank's initiative, ST&W began to diversify in order to hang on to what was then still a small share of the New England flour market.

In 1968 when Walter Sands retired, handing the business over to Frank, acquisitions began in earnest. First Frank bought a small bakers supply company and became a distributor of every kind of goody that commercial bakeries use: jellies, icings, glazes, fruits, nuts, shortening. ''We had several thousand items,'' Frank says.

Next he bought out two leading, competing manufacturers of bakery fillings. It made a lot of sense, he thought, to manufacture the items they were distributing.

The crowning acquisition was the Dunkin' Donut distribution business in New England, which added a warehousing and trucking activity to ST&W's other enterprises.

''It all fit together. It was beautiful,'' Frank says. ''But it was too unwieldy.'' In 1978 came his decision to move to Vermont. Since then the divesting has taken place.

While all this was happening, unforeseen trends were developing that would favorably affect the family flour business.

Rachael Carson's ''Silent Spring'' in 1962, which did so much to launch the environmental movement, alerted people to additives in their food. Consumers started reading content labels to find out what was going into their stomachs. They gained a new appreciation of pure food. Natural food became popular.

Some people decided they didn't want bleach in their flour. This gave the unbleached King Arthur an unexpected leg up. In the 1960s, it was about the only brand left on the market that wasn't bleached, because the public preference had been for very white flour. Now many people, including college students, young couples, and others, began baking their own bread. The trend back to home breadmaking had begun.

About this time, the yeast industry brought out what many home bakers consider the greatest thing since sliced bread: dry yeast. For generations bakers had endured the temperamental little square cakes of moist yeast that had a shelf life of only two weeks, had to be refrigerated, and were forever, it seemed, turning brown before one had a chance to use them.

Dry yeast revolutionized home breadmaking. It didn't need to be refrigerated, had a shelf life of a year, and eliminated the need for overnight rising. Bread baking suddenly telescoped from a 24-hour to a four-hour stint. Home bakers could bake bread in the morning and eat it for lunch.

One of Frank Sands's first smart moves was to discover on his father's staff a diamond in the rough named Bert Porter. Like Frank, Bert had had his hands in flour since childhood. Returning from war duty in Europe in 1946, he went with Sands, Taylor & Wood, riding the delivery trucks as a salesman. Part of his job was to make sure King Arthur Flour was sitting pretty on supermarket shelves.

Discerning his hidden talents, Frank promoted him at once to general manager to run the King Arthur family flour division. In two years he rose to vice-president. Then, he recalls, ''I realized that if I was going to make educated decisions, I had to learn how to bake.''

Bert's Swedish wife, Ruth, an excellent baker, became his teacher. They mixed and kneaded dough side by side in their own kitchen until Bert, too, became a good baker. He looked for and found shortcuts that speeded breadmaking.

Surveys during the '70s showed Bert that about 70 percent of women baked something from scratch once a month. But it was bread, he discovered, in which women took the greatest pride. So, he decided to cast his future with bread flour. He increased the amount of gluten in his flour and focused all his advertising on King Arthur as ''best for baking bread,'' though it bakes other goods equally well.

When Bert got his act together as a baker, just for fun and to get out of the office, he began doing one show a week. He appeared on talk shows on radio and television, gave demonstrations to church groups, made a movie on baking. He, in effect, became King Arthur, the knight on the horse, the man with the banner, the spokesman for his company. He personally answered an average of 70 letters a week, often addressed to ''Dear King Arthur'' from eager but baffled bakers needing help.

His folksy style, sunny disposition, and fondness for cracking jokes made him a natural. After one radio appearance, he was inundated by 6,000 requests for his recipes. His kitchen-tested ''Easy Home Baking,'' ''Baking for Fun,'' and ''Bread Baking Made Easy'' recipe books and tips on baking breads, rolls, cookies, and pastries have never stopped growing in popularity.

''I was crusading for flour,'' Bert says, in the true spirit of the Round Table. He figured if he could boost flour sales in general, King Arthur would get his fair share of the market. It worked. Since 1966, ST&W's family flour business has quadrupled in value.

Bert Porter's name has appeared on every bag of King Arthur Flour since the 1960s. But as of Jan. 1 it is coming off. He has been easing by stages into retirement. This fall he has done only 20 shows. What he looks forward to now, among other things, is possibly working with the disadvantaged in urban areas, showing them how to bake their own bread, eat a tastier loaf, and save about half the price of commercial bread.

''One of the great thrills in business,'' Frank Sands says, ''is to see somebody develop to their fullest potential the way Bert has. Those things don't happen that often, and when they do, it's really heartening.''

Even with Bert Porter dismounting, King Arthur is still on the move. His new advertising theme is: ''King Arthur bakes better'' - not just bread but cookies, cakes, pies, and the latest fads that home bakers are into: bagels and pasta. ''King Arthur makes incredible pasta,'' Frank says, ''because pasta requires very strong protein, and King Arthur is the strongest protein flour you can use and still mix with your hands.''

Brinna Sands, no slouch as a cook herself, will take over Bert's running Q-and-A correspondence with the baking public.

One favorite letter Bert is taking into retirement with him is from a wife who sent her husband to the store for a bag of Robin Hood Flour. He came back with King Arthur. That was the nearest thing to Robin Hood he could find, he told his wife. ''It's a stupid way to do things,'' she wrote, ''but it was the best thing he ever did for me.''