Church & Dwight Co., Inc. History

Company Perspectives:

The combination of a broad and well-balanced product portfolio, well-developed distribution capabilities in the U.S., and a growing international presence will all help the Company continue to meet its growth objectives over the next few years. With the excellent assets at the Company's disposal, our long-term objective is to expand all four of our major businesses--Household Products, Personal Care, Consumer International and Specialty Products, while delivering a return to investors in excess of the industry average.

Key Dates:

1846:

Dwight & Co. is formed.

1867:

Church & Co. is formed.

1896:

Church Dwight Co. is formed through the merger of John Dwight & Co. and Church & Co.

1925:

The company is incorporated as Church & Dwight Co.

1968:

The modern development of the company begins as it starts to develop a more specialized product line.

1980:

The company begins a decade of diversification and growth.

1986:

The company diversifies into over-the-counter pharmaceuticals through the acquisition of DeWitt International Corp.

2001:

Carter-Wallace Inc. and USA Detergents, Inc. are acquired, adding new brands to the company's consumer products business.

2003:

Church & Dwight acquires Unilever's oral care brands.

2004:

Church & Dwight acquires Del Laboratories.

Company History:

Church & Dwight Co., Inc., is a leading consumer products company that markets numerous brands of deodorizing and household cleaning products, laundry products, and personal care products. Church & Dwight's consumer products, which account for more than 80 percent of annual sales, are sold under the brand names Arm & Hammer, Arrid, Brillo, Mentadent, Pepsodent, Close-Up, Trojan, and Nair. The company is also the world's leading producer of sodium bicarbonate, more commonly known as baking soda. This segment of the company's activities constitutes its specialty products business, which also includes the production of sodium sesquicarbonate, ammonium bicarbonate, rumen bypass fat products, and rumen efficiency enhancers. These products are used in a variety of industrial, institutional, animal nutrition, medical, and food applications. Church & Dwight generates more than 90 percent of its revenue in the United States.

19th-Century Beginnings

The company was founded in New York City in 1846 as John Dwight & Co. by Dr. Austin Church and his brother-in-law John E. Dwight, who had begun processing and packaging baking soda in powdered form in Dwight's kitchen. It was marketed for use in home baking. In 1867, two sons of Church formed Church & Co. to compete with John Dwight & Co. The Arm & Hammer Trademark derives from that year, in which Church & Co. acquired a spice and mustard business named Vulcan Spice Mills that used an arm and hammer--presumably about to descend on an anvil--as its trademark because Vulcan, the Roman god of fire, was associated with the forging of metals.

In 1888, Church & Co. began issuing trading cards bearing the arm-and-hammer trademark to publicize its baking soda and saleratus (potassium bicarbonate) products. In 1896, it merged with John Dwight & Co., which also was issuing trading cards for its "Cow" brand of baking soda, to form Church Dwight Co. The merged firm continued to market baking soda under both the Arm & Hammer and Cow trademarks for some time. Arm & Hammer Super Washing Soda was introduced in the 19th century as a heavy-duty laundry and household cleaning product. Around 1915, Church Dwight began suggesting that baking soda could serve as medicine, offering a booklet titled Home Remedies for Simple Ailments. Soon it was also advertising baking soda as a tooth cleaner and a cleaner and freshener for laundry and for kitchen surfaces. The firm was incorporated as Church & Dwight Co. in 1925.

Church & Dwight was run by family members in highly conservative fashion for the next four decades--so much so that the company earned more in some years from its investment portfolio than from its operations. the company's methods of producing baking soda eventually became obsolete, and it turned to outside suppliers for the product. When the output of these suppliers proved insufficient, Church & Dwight began to build what soon became the world's largest facility for the production of sodium bicarbonate. The facility was located in Green River, Wyoming, and was completed in 1968.

In that year, Church & Dwight was producing nearly half of the sodium bicarbonate and borax in the United States in collaboration with Allied Chemical Co., a major producer of the sodium carbonate (soda ash) used--along with carbon dioxide--as the raw material for baking soda. Church & Dwight's production plants, in Syracuse, New York (for consumer products) and Green River (for industrial products), were receiving soda ash from Allied's own adjacent plants and turning out about 100,000 tons of sodium bicarbonate a year. Nearly half was going to bulk industrial users, such as baking, pharmaceutical, and fire extinguisher companies. The rest was processed into granules, placed in yellow boxes bearing the Arm & Hammer trademark, and sold to the public. Church & Dwight accounted for least 90 percent of U.S. consumer sales of baking soda. Washing soda (also manufactured by the company) and borax (purchased from suppliers) accounted for about 40 percent of the company's total sales volume.

Exploiting the Arm & Hammer Name through the 1980s

After decades of success, company management ultimately came to realize that housewives who, traditionally, had used Arm & Hammer baking soda as an all-purpose product--to bake bread, clean stains, eliminate odors, relieve indigestion, and alleviate the pain of minor burns and abrasions--had turned to an array of specialized products for all of these uses. Accordingly, under Dwight C. Minton, a fifth-generation descendant of Austin Church who succeeded his father as Church & Dwight's president in 1969, and Robert A. Davies III, vice-president of Arm & Hammer marketing, the company itself began to specialize.

Church & Dwight exploited the venerable Arm & Hammer name to market baking soda tablets for indigestion and mint-flavored ones as a mouth freshener. It also began marketing a phosphate-free laundry detergent based on soda ash and introduced an underarm deodorant (which failed) and oven cleaner, all under the Arm & Hammer name. Net sales rose from $22.4 million in 1969 to $77 million in 1975, and net income increased more than fourfold to $3.8 million during that time period.

In addition, a brilliantly successful advertising campaign begun in 1972 persuaded housewives to open the basic yellow box and place it in the refrigerator for use as a deodorant/freshener. Sales of the product rose 72 percent within three years. To stimulate sales even more, a follow-up campaign advised consumers to remove the box of baking after a while and pour its contents down the kitchen drain to deodorize it, too. Yet another ad campaign encouraged consumers to store Arm & Hammer baking soda in the freezer for the same purpose. "There are at least 10 guys running around New York claiming some credit for the refrigerator campaign idea," adman Gerald Schoenfeld told Jack J. Honomichl of Advertising Age in 1982. The company also added a bigger box of Arm & Hammer baking soda for heavy-duty applications, such as use in swimming pools and septic tanks, and created new packaging for the product's use as cat litter deodorizer.

Davies became president of Church & Dwight in 1981, while Minton remained chief executive officer. That year, the basic yellow box of baking soda accounted for about one-third of the company's sales volume of $127.1 million. Its main end use now was to deodorize refrigerator air. (In 1970 the main use had been the cleaning of refrigerator surfaces.) The second most important use was general household cleaning. The product's use in home baking now appeared to be negligible. Arm & Hammer had unaided recognition among 97 percent of U.S. female heads of households. Almost all grocery stores stocked the yellow box, and surveys found that, at any point in time, about 95 percent of all U.S. households had one or more packages in use in the home.

Church & Dwight opened another manufacturing plant in Old Fort, Ohio, in 1980. Four years later it purchased the Syracuse plant of Allied Corp. (formerly Allied Chemical Co.) for $14 million. The company's Canadian subsidiary also owned a plant in Ontario. Church & Dwight moved its headquarters from New York City to Piscataway, New Jersey, in the late 1970s, and to Princeton, New Jersey, in 1985.

Church & Dwight reformulated and reintroduced its dry laundry detergent at a lower price in 1981 and introduced a carpet and room deodorizer in the same year. An oven cleaner containing no sodium was marketed in 1982. Liquid detergent was tested in the metropolitan New York City area in 1984. In that year, the company also began testing its own toothpaste and tooth powder, both made with baking soda. In addition, Church & Dwight started marketing a deodorizing spray and a carpet freshener containing baking soda and a bleach and a fabric softener for sheets without baking soda. All of its consumer products, including washing soda, continued to bear the Arm & Hammer name. Although shares of company stock were being traded over the counter, most were held by descendants of the founders or employees.

Church & Dwight's Chemicals Division was producing two-thirds of all sodium bicarbonate sold to U.S. industrial customers in 1986. The division had found a recent customer in the animal feed industry, which applied it as an antacid supplement for dairy cattle. Church & Dwight purchased a 40 percent share of a British firm, Brotherton Chemicals, in 1985, for the industrial sector of its business and increased its stake to 80 percent in 1987. Of the firm's $231.4 million in sales that year, nevertheless, 78 percent came from consumer products marketed by the Arm & Hammer Division.

In 1986 Church & Dwight acquired and absorbed DeWitt International Corporation, a producer of over-the-counter pharmaceuticals and health and beauty aids. Also during that year, the company began a relationship with Armand Hammer, the flamboyant chairman of Occidental Petroleum Corporation. Tired of having to reply in the negative when asked if he was the "baking-soda king" because of the resemblance between his name and the Arm & Hammer trademark, Hammer purchased about 5 percent of Church & Dwight's shares for about $15 million and received a seat on the company board so he could reply in the affirmative. As part of the transaction, Occidental and Church & Dwight formed a joint venture to continue the manufacture and marketing of potassium carbonate products at an Occidental-acquired plant in Muscle Shoals, Alabama, whose customers included Church & Dwight. In 1991, after Hammer's death, his successor sold Occidental's stake in Church & Dwight for $19 million, but the joint venture remained in effect.

Church & Dwight in the 1990s

Church & Dwight's net sales of $428.5 million in 1990 was an increase of more than fourfold in a decade, and its net income of $22.5 million was about three times the 1980 figure. The company now had 12 facilities, including three in England and one each in Australia, Malaysia, and Singapore. Its laundry detergent now accounted for one-third of all revenues and ranked third in the United States after Tide and Surf. The company also held 60 percent of the world market for sodium bicarbonate. Arm & Hammer Dental Care toothpaste, introduced nationally in 1988, held 11 percent of the U.S. toothpaste market in 1993. Specialty products included ArmaKleen, a baking soda-based cleanser of computer circuit boards. In 1994, Church & Dwight established a division within its specialty products group to develop industrial cleaning solutions based on baking soda, and two years later it began selling cleaning products to the metal cleaning industry.

Also in 1994, Church & Dwight introduced a line of stick and roll-on deodorants in major U.S. markets under the name Arm & Hammer Deodorant Anti-Perspirant with Baking Soda. It also purchased the remaining share of Brotherton Chemicals. However, sales dipped by $17 million that year, and the company's profits fell 77 percent. Minton attributed the poor results to introducing too many new products. One of these was a liquid detergent more concentrated than other leading brands that fared poorly in the marketplace and had to be reformulated because consumers thought they were being offered less for their money. Another was Peroxicare, a toothpaste with peroxide as well as baking soda that may have been competing, to the detriment of both, with Arm & Hammer Dental Care in the fiercely competitive dentifrice market.

Church & Dwight was still struggling to regain its momentum when Davies, who had left the company in 1984, was renamed president in 1995. He was named chief executive officer, succeeding Minton, in November of that year. Although sales dropped again in 1995, the company took in record revenues of $527.8 million the next year and more than doubled its net income. That year, the company introduced variants of its toothpaste--including sensitive-formula, extra-whitening, and smooth spearmint versions--and its stick deodorant products. Results were even better in 1997, when Church & Dwight acquired a group of five household cleaning brands from The Dial Corporation. Among these was Brillo scouring pads. It also introduced nationally an aerosol deodorant antiperspirant.

In 1998, Church & Dwight acquired the Toss 'n Soft brand of fabric softener dryer sheets from Dial and combined it with Arm & Hammer Fabric Softener Sheets under the Arm & Hammer Fresh & Soft brand name. The company also was offering more differentiated baking soda products, such as Arm & Hammer Super Scoop, an anti-clumping cat litter introduced nationally in 1997, and Arm & Hammer Dental Care Gum, a baking soda-based oral care product introduced in 1998 in three flavors. Church & Dwight had record revenues of $684.4 million and record net income of $30.3 million in 1998.

In 1999, Church & Dwight launched a multimillion-dollar advertising campaign intended to "reeducate America on the benefits of deodorizing the fridge, and offer added convenience," according to a company executive quoted by Christine Bittar in Brandweek. Television ads aired in the spring and fall encouraged seasonal replacement of a new baking soda box dominated by the color blue rather than the familiar yellow package. The company also introduced an Arm & Hammer Advance White line of dentifrices in early 1999. Also in that year, Church & Dwight formed a joint venture with Safety-Kleen Corporation called ArmaKleen Company to distribute Church & Dwight's proprietary line of aqueous cleaners.

In 1998, Church & Dwight was still manufacturing sodium bicarbonate at Green River and Old Fort and still retained its partnership agreement with General Chemical Corporation (formerly Allied). The company's liquid laundry detergent, previously contract manufactured, had been moved to the Syracuse plant in 1995. The manufacture of powdered detergent, also being produced in Syracuse from light soda ash, was to move to Green River in 1999. Cat litter was being manufactured in both Green River and Syracuse. A Lakewood, New Jersey, plant acquired in 1998 was manufacturing the underarm deodorant line and was to begin producing dentifrice products in 1999. The Brillo product line and the dryer sheets were being produced at the London, Ohio, plant acquired from Dial Corporation. Other company products were being manufactured by contractors.

Church & Dwight, in early 1999, also owned, through subsidiaries, a distribution center in Ontario, Canada, and a manufacturing facility in Wakefield, England. The Canadian subsidiary was leasing offices in Toronto. A Venezuelan subsidiary was closed in 1998. Church & Dwight still had a half-interest in the Armand Products potassium carbonate manufacturing plant in Muscle Shoals. Its executive offices and research and development facilities, owned by the company, were in Princeton, and it was leasing space in two buildings adjacent to this facility.

Consumer products accounted for 82 percent of Church & Dwight's revenues in 1998. Among these were Arm & Hammer Dental Care toothpaste, tooth powder, gel, tartar-control formula and gel, Peroxicare, and tartar-control Peroxicare. Two underarm deodorants were available in scented and unscented stick, aerosol, and roll-on forms. Its line of specialty products consisted of sodium bicarbonate for commercial baked goods and as an antacid in pharmaceuticals, a carbon dioxide release agent in fire extinguishers, an alkaline agent in swimming pool chemicals, and an agent in kidney dialysis. Sodium sesquicarbonate and a special grade of sodium bicarbonate were being sold to the animal feed market as a food additive for use by dairymen as a buffer, or anti-acid, for dairy cattle.

Acquisitions Fuel Growth in the 21st Century

Church & Dwight recorded strong growth as it exited the 1990s and entered a new century. Nearly all of the company's growth was achieved in the consumer products segment of its business, with several acquisitions adding a handful of well-known brands to its stable of products. In June 2000, Church & Dwight and USA Detergents, Inc. formed a joint venture company, ARMUS LLC, to combine the laundry products businesses of both companies. USA Detergent's brands included Xtra and Nice N Fluffy. Under the terms of the partnership, Church & Dwight, which managed ARMUS, was given the option to buy USA Detergents, an opportunity the company took advantage of in May 2001. The acquisition of USA Detergents was followed by another acquisition in 2001, the purchase of the consumer products business of Carter-Wallace, Inc. The transaction gave Church & Dwight two new brands, the Arrid line of antiperspirants and the Lambert Kay pet care product line. Concurrent with these purchases, Church & Dwight's joint venture company, Armkel LLC, in which it shared a half-interest with a private equity company, Kelso & Co., acquired the rest of Carter-Wallace's consumer products business. The brands acquired by Armkel included Trojan condoms, Nair hair remover, and the First Response line of home pregnancy and ovulation test kits. In 2003, the brands acquired by both Church & Dwight and Armkel were consolidated under Church & Dwight's control.

Church & Dwight's moves on the acquisition front continued in 2002, a year that saw the company eclipse the $1 billion-in-sales mark for the first time in its history. In early 2002, the company turned its attention to its specialty products business and acquired Biovance Technologies Inc. Based in Omaha, Nebraska, Biovance produced Bio-Chlor and Fermenten, two products that bolstered Church & Dwight's animal nutrition product line. The addition of Biovance's products, according to a Church & Dwight executive in a January 14, 2002 interview published in Feedstuffs, "enables us to provide customers with a full lineup of products covering the cow's entire lactation curve as well as the buffer stage."

Dwight & Church's more significant moves occurred on the consumer products side during the early years of the decade, a business the company resumed expanding in 2003. In the fall of that year, Church & Dwight acquired the oral care brands owned by Unilever, paying $104 million for Pepsodent, Aim, and Mentadent toothpastes, as well as the exclusive licensing rights to Close-Up toothpaste. The acquisition substantially increased the company's existing business in oral care products. "This transaction," Davies announced in the September 26, 2003 issue of Cosmetics International, "strengthens our strategically important oral care business, tripling our unit sales and more than doubling sales in the U.S. oral care section."

As Church & Dwight neared its 160th anniversary, the company continued to demonstrate a desire to expand its consumer products business. Annual sales in 2003 reached $1.05 billion, 82 percent of which was derived from its portfolio of consumer products brands. The company wanted to increase the size of this mainstay business segment, and in 2004 it appointed a new leader to spearhead such expansion. In June, Davies ended his nine-year tenure as president and chief executive officer, passing the titles to James R. Craigie. Davies, who had been appointed the company's chairman in 2001, continued to serve in this capacity. Craigie, who had spent 15 years at Kraft Foods, joined Church & Dwight after presiding as president and chief executive officer of Spaulding Sports Worldwide for six years. At Spaulding, Craigie was credited for leading the athletic equipment maker's turnaround.

Craigie's tenure began with an acquisition, suggesting Church & Dwight would continue to expand through acquisitions as it plotted its future. In July 2004, the company teamed up with Kelso & Co. again to acquire Del Laboratories in a transaction valued at $465 million. Church & Dwight and Kelso formed a new company, DLI Holding Corp., to serve at the parent company of Del Laboratories, a company whose brands included Sally Hansen Hard as Nails, Cornsilk face makeup, and Naturalistics cosmetics. The transaction was expected to be completed at the end of 2004.

Principal Subsidiaries: Church & Dwight Ltd./Ltee (Canada); C&D Chemical Products, Inc.; Brotherton Speciality Proudcts Ltd. (United Kingdom); Quimica Geral do Nordeste S.A. (Brazil); C&D Technologies, Inc.

Principal Competitors: The Procter & Gamble Company; Reckitt Benckiser plc; Kimberly-Clark Corporation.

Further Reading:

• "Arm & Hammer: Taking the Cure," Sales Management, February 15, 1970, pp. 59-60.
• Bittar, Christine, "C&D Polishing $18M Plan to Brighten Mentadent Sales," Brandweek, September 6, 2004, p. 5.
• ------, "In-the-Box Thinking," Brandweek, January 25, 1999, p. 3.
• "Craigie Named CEO at Church & Dwight," Feedstuffs, June 28, 2004, p. 6.
• Gordon, Mitchell, "Profitable Pairing," Barron's, September 6, 1982, pp. 37-8.
• Honomichl, Jack J., "The Ongoing Saga of "Mother Baking Soda,'" Advertising Age, September 20, 1982, pp. M2-3, M-22.
• Howie, Michael, "Church & Dwight Buys Biovance, Expands Lineup," Feedstuffs, January 14, 2002, p. 8.
• Jacobs, Sanford L., "And Now We Discover a Miracle Product That's Not So New," Wall Street Journal, March 21, 1973, p. 1.
• Marinelli, Tom, "A "Soda' Supplier for 140 Years Is Diversifying," Chemical Week, May 7, 1986, pp. 78-9.
• Montana, Constanza, "Armand Hammer and Arm & Hammer Finally Arm in Arm," Wall Street Journal, September 23, 1986, pp. 3, 18.
• "The New Face of Arm & Hammer," Business Week, April 12, 1976, p. 60.
• Nulty, Peter, "No Product Is Too Dull To Shine," Fortune, July 27, 1992, p. 96.
• Prior, Molly, "Unilever Sells Oral Care Unit to Church & Dwight," Drug Stores News, September 22, 2003, p. 4.
• ------, "Del Labs Acquired in $465 Million Deal," Drug Stores News, July 19, 2004, p. 4.
• "A Smell-Less Story," Forbes, August 15, 1974, p. 29.
• "Sodium Bicarb Expansions Put C&D on the Offensive," Chemical Market Reporter, July 22, 1996, pp. 3, 18.
• Somasundaram, Meera, "Missteps Mar Church & Dwight's Plans," Wall Street Journal, April 28, 1995.
• Treadwell, T.K., "The Legacy of ... Church & Dwight Trade Cards," Antiques & Collecting, January 1991, pp. 26-8.
• "Unilever Brands Under Hammer," Cosmetics International, September 26, 2003, p. 3.
• Weisz, Pam, "Church & Dwight in Need of Next Big Idea," Brandweek, November 13, 1995, p. 8.

Source: International Directory of Company Histories, Vol.68. St. James Press, 2005.

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