How did an English soapmaker and his family create one of the largest oral care brands in the world?
Here’s the story behind Colgate - a brand that generated $7.26B in worldwide sales for Colgate-Palmolive in 2020.
Let’s set the stage...
At the beginning of the 19th century, people started congregating more in cities.
This increase in population density led to new ways of living.
Personal hygiene and prevention of disease became much more important in society.
Not only was it beneficial to one’s health, personal cleanliness became a show of status…
“Look how clean I am” was a way of signaling one’s moral and social values.
It was in this environment that a son of an English farmer arrived in Baltimore, Maryland in 1798 at the age of 15.
After two years of study, William Colgate left his meager home conditions and made his way to New York City in pursuit of making a name for himself and a fortune.
With no money, credit, friends, or reputation, Colgate set out to learn how a business operates from the inside out.
This led the young Colgate to search out a job in the accounting department at John Slidel & Co., one of the city’s largest candlemakers, in 1804.
However, Mr. Slidel didn’t have any positions available.
Inspired by something in Colgate’s appearance and desire, Mr. Slidel offered Colgate an assistant clerk position.
Respectfully declining, the 21-year old Colgate responded, “I desire, sir, to learn the business. I wish to work to earn a living for myself. Anyone can assist a clerk, but I wish to know how to work.”
With that statement, Mr. Slidel instantly saw potential in Colgate and called out to his foreman, “Give this young man work; show him everything about the business. He will be of great service to you.”
For two years, Colgate learned everything possible about the candle-making business, from manufacturing, to sales, and management - it was like getting a master’s degree in business while getting paid.
He absorbed it all.
At the age of 23, Colgate left Slidel & Co. and launched his own candle-making business on Dutch St. in New York City, with the help of a partner.
Recognizing the need to control the entire process of production, Colgate decided to purify the fat for his soap and candles in-house, rather than buying the commodity on the market.
On his first day of business, a customer wandered in off the street, picked up his soap and looked it over, ordering a two-pound bar on-the-spot.
When asked where the man would like his bar of soap delivered, the man said he lived quite a distance out of town and that it would be an inconvenience to make the delivery.
Undeterred by distance and energized by his first sale, Colgate insisted on getting the delivery address and making the delivery, at whatever cost. The customer relented and provided the details.
At that time, Colgate was a one-man shop… so he closed his shop an hour early and made the delivery that afternoon.
Even though this extra-care “may have cost me double my profit on that first sale… I won a good customer, and I have kept him ever since.”
It was with this mentality that William Colgate was quite successful in his early years of business, amassing a personal fortune of $5,000 by the age of 28, or about $111k in today’s money.
Over the following years, Colgate saw his personal wealth grow significantly during the War of 1812-15. During that time, Colgate bought out his original partner, Frances Smith.
It was shortly after the war that Colgate’s brother-in-law, John Gilbert, built one of the largest starch factories in the country, located across the Hudson in Jersey City.
As the business grew, they eventually opened up other starch factories closer to the vast cornfields of the midwest.
The soap and candle business was humming along, when in 1833, Colgate suffered a severe heart attack, causing him to take a step back from the day-to-day operations.
This event shook Colgate and was probably a key reason why he became a devout Baptist and philanthropist for the remainder of his life.
During the 1840s, the business started selling individual cakes of soap for washing clothes.
Colgate’s biggest competitor during this time was the recent upstart, Procter & Gamble (P & G), who was founded in 1837.
The early years of the soap and candle industry saw a clear division between those who made laundry (wash) soap and those who made toilet (hand) soap.
This imaginary line disappeared as William Colgate passed away in 1857, opening up competition for both types of companies to compete for the growing soap market.
Although at first hesitant, Samuel Colgate, one of three sons, took the reins of his father’s budding soap empire and decided to carry on the family legacy.
Samuel was already 35 by this time, four years younger than his brother James, who would go on to create his own legacy outside the family business as a founder of the New York Gold Exchange.
It was during these years of Samuel’s control that Colgate started investing heavily in advertising and product innovation.
In 1872, the company introduced Cashmere Bouquet, a perfumed soap.
In 1873, the company launched its first Colgate Toothpaste, an aromatic toothpaste sold in jars.
In 1896, the company started selling toothpaste in a collapsible tube, named Colgate Ribbon Dental Cream, which was an idea taken from a dentist and inventor, Washington Sheffield.
That same year, Colgate hired Martin Ittner and founded one of the first applied research labs for new product development.
When Samuel Colgate passed away in 1897, Colgate and Company was already wildly successful and growing quickly.
At this time, another soap company was just getting its start in Milwaukee, Wisconsin.
B.J. Johnson began making soap from palm and olive oils in 1898.
This product became so popular that the company name was changed from the B.J. Johnson Company to Palmolive.
Palmolive continued to grow during the first two decades of the 20th century, eventually merging with Peet Brothers, another soap manufacturer out of Kansas City, Kansas.
Further consolidation in the industry continued when the Palmolive-Peet Company acquired Colgate Company in 1928.
The subsequent years see Colgate-Palmolive grow into the Consumer Product Goods behemoth that it is today…
Introducing Fab laundry detergent and Ajax “foaming” cleanser in 1947…
And then Soupline fabric conditioner, Palmolive dishwashing liquid, and Cold Power laundry detergent in the 1960s.
Colgate briefly lost its #1 spot as America’s top toothpaste brand when P&G added fluoride to their formula and began taking away market share…
But then gained it back when Colgate reformulated their toothpaste with MFP fluoride in 1968. At this time, Ultrabright whitening toothpaste was also launched.
Innovation has been a constant cornerstone of success for Colgate-Palmolive…
And if the company can’t create innovation, they know they can buy it.
In 1972, the company bought Hoyt Laboratories, which would later become Colgate Oral Pharmaceuticals.
From 1972 until 2020, Colgate-Palmolive has went on to create or acquire the following products/brands:
- Irish Spring deodorant soap
- Colgate Plus manual toothbrush
- Protex bar soap
- Palmolive automatic dishwashing liquid
- Colgate oral rinse mouthwash
- Colgate Total toothpaste
- Colgate Actibrush battery powered toothbrush
- Colgate 360° manual toothbrush
- Colgate 360° Sonic Power battery toothbrush
- Colgate Sensitive Pro-Relief toothpaste
- Colgate Optic White Toothpaste
- Tom’s of Maine
- Hello Products
Colgate-Palmolive generated $16.5B in worldwide net sales for 2020.
44% of those net sales are from oral care, mainly attributed to the Colgate brand.
That’s to say Colgate generated approximately $7.26B in 2020.
Not too bad for a son of an English farmer who had a desire “to know how to work.”