Company’s Secret Ingredient Is Diversification : Longevity: Bakery supply house George Ruhl & Son has been in business for 205 years. It has expanded its product line dramatically in the past two decades.

There’s no big secret to keeping a family business going for 205 years.

“It either evolves or dies, one of those two,” said George R. Ruhl III, owner of the nation’s oldest bakery supply house.

Started in 1789 by Conrad Ruhl as a flour and feed mill, the company is now known as George Ruhl & Son, and is the ninth-oldest company in the country, according to a survey by Forbes magazine.

When Ruhl took over the business from his father in 1972, flour and sugar were the only things the company sold, mostly to mom-and-pop bakeries in Baltimore.

Since then, the younger Ruhl has ensured that the company evolved. He expanded its territory into four states and its product line from 30 items to more than 2,000. Annual sales have grown from $250,000 in 1974 to the company’s current $25 million.

Ruhl’s customers include universities, military bases and supermarkets as well as bakeries. The company now supplies them with everything from ingredients--including more than two dozen types of flour, six kinds of butter, cake mixes, sprinkles and spices--to finished products like frozen bagels and cookies. It also sells baking equipment.

The company is unusual because it managed to avoid being consolidated into a larger firm and has continued to be run by family members, said Louis Galambos, a Johns Hopkins University professor who specializes in business history.

“Especially after 1900, very few families produced those kind of managerial resources consistently,” he said.

Not many family-owned businesses survived the turn of the century without being taken over by a larger company, Galambos said.

“Before 1890, giant corporations were the exception, and after 1904 they were the rule. There was a great wave of consolidation, a period of great prosperity and expansion of the stock market meant you could sell securities and bring about consolidations.

“And of course there was bitter competition and that led many people to give in to consolidation.”

Ruhl, who is 49, said it took years for him to discover how unusual the company is.

“I didn’t realize not many businesses survive past the first or second generation,” he said. “A large percentage of my friends came from families that had a business. It didn’t seem unusual to me.”

The company has had to weather a few crises and undergo some changes to make it through the years and still be in business today.

It survived Baltimore’s Great Fire in 1904, abandoned the feed business in 1915 as cars replaced horses and began adding sugar and other baking supplies in the 1950s.

“The health department would kill me now for doing this, but during the Great Fire our warehouse was on the waterfront in downtown Baltimore. As the fire approached, they threw all the flour, which came in barrels in those days, into the harbor,” Ruhl said.

“The flour on the outside swelled and sealed the barrels. The next day they went out in a rowboat and scooped up the barrels,” he said. “They scooped the flour out from the middle of the barrels where it wasn’t wet, repackaged it, bought secondhand furniture and reopened.”

In addition to the flour, the only thing that survived was a large safe, although the papers and coins inside burned or melted, Ruhl said.

The company remained on the waterfront in Baltimore until the 1970s, receiving flour on trains. Now it is run from a large warehouse just off Interstate 95 outside the city.

With his recently awakened sense of history, Ruhl regrets throwing away some items over the years, including a ledger his grandfather used in the early 1900s, and a stand-up accounting desk.

“We’ve moved five times since I’ve been here and you look back 30 years later and say, ‘Why did I throw that away? It was 60 years old when I threw it out,’ ” he said.

“I think every generation has treated it as its own business. The only thing that has remained the same is trying to treat the customer as friends and provide a good product at fair price,” Ruhl said.

Yet Ruhl said he doesn’t feel the weight of tradition on his shoulders and won’t put pressure the next generation to keep the family business going.

“I didn’t feel any pressure. My father didn’t want me to go into it because he thought it was a dying business,” Ruhl said. “I worked a year for Eastern Stainless Steel and he told me to stay there.

“But I saw more of a future running my own business. The reason my father didn’t think there was any future back then was because the only thing sold was flour and sugar to bakeries in the city,” he said.

One of his three children wants to study business when he goes to college next year, and a daughter already works for the company, but whether they continue the business is up to them.

“I’m like my father,” Ruhl said. “One way or the other, it has to be their choice or they won’t be happy with it.”