Colgate Essay, Research Paper

Colgate Palmolive

With a continuous expansion in it’s product line, Colgate-Palmolive is

taking on the look of one of the most stable stocks on the exchange. Colgate

has a wide variety of products sold around the globe including, Colgate

Toothpastes, Speed Stick Deodorants, Ajax Surface Cleaner, and Hill’s Science

Diet foods for house pets.

Colgate was founded in 1806 in New York City on Dutch Street by

William Colgate as a starch, soap and candle business. Colgate produced

soaps and perfumes or the next 67 years and then in 1873, they introduced

their first toothpastes, which were aromatic toothpastes. Then 13 years later,

they introduced the first dental creme packaged in collapsible tubes similar to

those used today. After 104 years of being in business on Dutch Street, the

largest tenancy on record in New York City the entire Colgate organization

moved to Jersey City. In 1928 Colgate made its greatest merger of all time

with the Palmolive-Peet Company and in 1953 took on its present name of

Colgate-Palmolive. By 1967 Colgate-Palmolive was on a roll with sales passing

the 1 billion dollar mark. In the years after, Colgate began acquiring major

companies and expanding its product line with the purchases of Hill’s Pet

Products in 1976, the Mennen Company in 1992 and in 1993 acquired the

liquid soap brands of S.C. Johnson.

Before the purchase of Mennen Co. in 1992, Colgate Palmolive had no

major presence in the deodorant industry. With the purchase of Mennen Co.

they held 16% of the deodorant market but had to compete with Proctor and

Gamble, who held 26% of the market with products such as Sure, Secret and

Old Spice.

After the purchase of Mennen Co., which was easily purchased without

resist for $670 million in cash, Colgate-Palmolive held 16% of the deodorant

market with their Speed Stick and Lady Speed Stick deodorants, which are

now the leading in world wide sales of deodorants. They also now own

products under the Baby Magic name such Skin Bracer and Baby Magic Foot.

Powder.

In 1976 , Colgate-Palmolive acquired Hills Pet Products Inc. Since the

foundation of this company in 1948, they have committed themselves to the

health and welfare of dogs and cats. Today, Hill’s Pet Nutrition Inc. is one of

the leading pet food manufactures and is revolutionizing the pet food industry

with its Prescription Diet products used by veterinarians to manage such

conditions as obesity, heart disease, kidney disease and many others. Hill’s Pet

Products also manufacture Hill’s Science Diet food.

Hill’s Pet Products has not always been a success. When it was founded

in 1948 by Mark Morris it grew very slowly in it’s specialty foods and

attempted to enter into other areas of pet care such as flea baths and aquarium

supplies. It was taken over a number of times but it seemed to be more of a

loss rather than gain. In 1976 Colgate-Palmolive acquired it, attracted by it’s

Science Diet brand. Colgate revolutionized Hills Pet Nutrition by marketing

not through supermarkets but through veterinarians and through pet food

stores as the Prescription Diet product line. Since Hills Pet Nutrition was

acquired they have had an increase in annual sales from $40 million to $832

million and now make up 11% of Colgate sales.

After the takeover of Mennen Co. the price of Colgate-Palmolive Co.

rose from 49.13, the 1991 high, to 60.63, the 1992 high. Their sales also

increased by 947 million from 6060 million in 1991 to 7007 million in 1992.

The net income also increased drastically from $125 million to $477 million.

And lastly, the takeover increased the number employed by Colgate-Palmolive

from 24,900 to 28,800.

Through mergers and divestitures Colgate-Palmolive has grown from a

small shop on dutch street to a major stock on the NYSE. Mergers and

divestitures are economically wise because they allow for the larger more

dependable companies to take another company’s products and turn them on

the right path, such as Hills Pet Products Inc. The government should not be

allowed to regulate them because mergers allow for a more dependable

product. Mergers and divestitures help competition between major companies

and also bring more money in for the investor through dividends. Although

this may cause unemployment, it does help the economy.

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Financial World-June 20,1995 p 58 “Top Dog-How Hills Pet Nutrition became one

of the all-time stars in the Colgate stable”

Colgate-Palmolive via Internet

Money Online via Internet

Chicago Tribune-Feb. 14, 1992