Colgate Palmolive 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.

Bibliography:

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

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