When procter & gamble added teeth-whitening products under the crest brand, the firm was engaged in

William Procter, a candle maker, and James Gamble, a soap maker, formed the company known as Procter & Gamble in 1837. The two men, immigrants from England and Ireland respectively, had settled earlier in Cincinnati and had married sisters. The two men decided to pool their resources to form their own company, formalizing the relationship on October 31, 1837.

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What’s Happening Today?

The company prospered during the nineteenth century. In 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble. During the Civil War, the company won contracts to supply the Union army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gambles products. Once the war was over and the men returned home, they continued to purchase the companies products.

In the 1880s, Procter & Gamble began to market a new product, an inexpensive yet high quality soap. The company called the soap "Ivory." In the decades that followed, Procter & Gamble continued to grow and evolve. The company became known for its progressive work environment in the late nineteenth century. William Cooper Procter, William Procter's grandson, established a profit-sharing program for the companies workforce in 1887. He hoped that by giving the workers a stake in the company, they would be less inclined to go on strike.

Over time, the company began to focus most of its attention on soap, producing more than thirty different types by the 1890s. As electricity became more and more common, there was less need for the candles that Procter & Gamble had made since its inception. Eventually the company chose to stop manufacturing candles in 1920.

In the early twentieth century, Procter & Gamble continued to grow. The company began to build factories in other locations in the United States, because the demand for products had outgrown the capacity of the Cincinnati facilities. The companies leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Company leadership also pioneered in the area of market research, investigating consumer needs and product appeal. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap operas."

Throughout the twentieth century, Procter & Gamble continued to prosper. The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation. In addition, numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1950. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as "Crest". Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. Once again focusing on laundry, Procter & Gamble began making "Downy" fabric softener in 1960 and "Bounce" fabric softener sheets. One of the most revolutionary products to come out on the market was the companies "Pampers", first test-marketed in 1961. Prior to this point, there were no disposable diapers. Babies always wore cloth diapers, which were leaky and labor intensive to wash. Pampers simplified the diapering process.

Over the second half of the twentieth century, Procter & Gamble acquired a number of other companies that diversified its product line and increased profits significantly. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Shultons Old Spice, Max Factor, and the Iams Company, among others. In 1996, Procter & Gamble made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Olestra, also known by its brand name Olean, is a substitute for fat in cooking potato chips and other snacks. Procter & Gamble has expanded dramatically throughout its history, but its headquarters still remain in Cincinnati.

Timeline

According to Procter & Gamble’s website, the Cincinnati company was founded in 1837— a year of financial crisis in the country— by brothers-in-law William Procter and James Gamble. Procter was a candle maker, and Gamble was a soap maker. These products became the foundation of their business.

1850 - The company begins to add its Moon and Stars logo to goods. Despite rumors of impending civil war, they built a new plant to sustain their growing business.

1859 - Procter & Gamble now does $1 million in sales, having grown into a company with dozens of employees.

1862 - In a turn of fate, the Civil War gives P&G some good fortune as it attains deals to supply candles and soap to Northern armies.

1879 - By this time Gamble’s son, James, has used his chemistry knowledge to create a cheaper equivalent of more expensive soaps. This leads to the Ivory Soap brand, which William Proctor's son Harley named after reading a passage from the Bible—“out of ivory palaces.”

1882 - Son Harley Procter maneuvers to spend more on advertising, marketing the soap across the nation through newspapers.

1887 - P&G initiates one of the first profit-sharing deals. This gave employees a piece of the pie, and quelled frustration among workers.

1890 - The soap business grows into a diverse product lineup of more than 30 different soaps. The company incorporates as a means to increase cash for growth.

1915 - The company opens its first production outside of the U.S.; making Crisco and Ivory Soap in Canada.

1920s - Due to the steady decline of candle demand after the invention of the light bulb, the company phases out candle manufacturing. During this time frame, the company pushes into direct to retail sales in order to create a more consistent production schedule.

In the 1930s P&G buys overseas assets in the Philippine Manufacturing Company.

Through the next decades, P&G goes on to bring more products into its lineup. These include detergents, soap powder, shampoos, toilet goods and a long list of consumer staples.

What’s Happening Today?

It’s probably safe to say that Procter & Gamble has grown into something far beyond what its founders ever imagined. P&G did $67.68 billion in sales last year, with earnings of $3.89 billion, or $1.53 per diluted share. This was a weaker earnings performance than years past, but the company remains a strong contender in the home products industry, with a lineup including Crest toothpaste, Gillette razors, Tide laundry detergent, diapers, Dawn cleaning supplies, and, thanks to the coronavirus, the much sought-after Charmin toilet paper brand.

There are fair arguments about the slacking nature of the company’s growth story. Revenues were stagnant in 2016 and 2017, but have since regained momentum. Mounting competition within the razor industry has dampened the value of the $57 billion Gillette acquisition back in 2005. A move that should have helped P&G grow into a new market has instead been hit with resistant competition from cheap startup razor brands like Harry’s, and the irreverently advertised Dollar Shave Club, which was eventually bought out by Unilever (UL) - Get Unilever Plc Report. Shifting tastes to more relaxed styles have also led to consumers shaving less often.

Write-offs from Gillette have plagued the company’s earnings results, leading P&G to rely on adjusted earnings results to appease shareholders. It has worked so far, as the stock reached all-time highs prior to the recent market sell-off.

Even in slower times, the stock does carry a history of success. Since 1990, the stock has outpaced the S&P 500 by just under 600%; producing gains of 1,219% during that time frame. With $6.28 billion in cash, and a healthy balance sheet with tons of equity, the company is by no means in trouble. The next few years will be dependent on how P&G can use its scale and position within home products to find a path to gathering market share, or to streamline the business to the more profitable areas of its lineup.

The current rush for toilet paper and cleaning products probably won’t hurt either.