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Reckitt Benckiser Rolls On



This UK firm continues to expand its reach.



By Christine Esposito, Associate Editor



Published May 13, 2013
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Reckitt Benckiser Rolls On

Reckitt Benckiser knows a thing or two about antiseptics, disinfectants and air care thanks for leading brands like Dettol, Lysol and Air Wick— three of its most recognized product lines. Along with those “powerhouse” brands is a roster of other well-known lines that address various ailments and issues ranging from excess hair and acne to dirty dishes to headaches and chest congestion.

That diverse product mix, coupled with a widespread market reach—200-plus countries—helped this FTSE 100 firm tally net revenues of £9,567m in 2012.

Those numbers were surely unimaginable to Johann A. Benckiser and Isaac Reckitt, founders who created separate business in 1823 and 1840, respectively.

Over the course of the next century-plus, the firms headed by these two 19th Century entrepreneurs would expand via savvy busy moves, strategic alliances and key acquisitions, including:
 
1886:  Reckitt & Sons begins its expansion internationally, starting with Australia.
 
1888:  Reckitt & Sons is launched on the London Stock Exchange.
 
1913: In the UK, Reckitt & Sons join the Mason brothers in forming the Chiswick Polish Company.
 
1932: Reckitt buys Harpic Lavatory Cleaners and launches Dettol.
 
1935: Reckittt’s Sanpic disinfectant debuted.
 
1938: Reckitt & Sons merge with J&J Colman to become Reckitt & Colman Ltd.
 
1954: Chiswick Polish Company merges with Reckitt & Colman Ltd.
 
1956: Benckiser diversifies into consumer goods and industrial cleaning products. In the same year, Benckiser launches Calgon water softener.
 
1964: Benckiser develops and launches Calgonit Automatic Dishwashing Detergent.
 
1982: Benckiser continues its expansion into consumer goods via acquisitions and divestitures.
 
1985: Reckitt & Colman buys Airwick products.
 
1990 Reckitt & Colman acquires Boyle-Midway, the American household products group with brands Woolite, Easy-Off, Sani-Flush, Wizard and Old English. In addition, Benckiser acquires worldwide branded business of Beecham Household Products in US and Canada.
 
1991: Benckiser begins expansion into Eastern Europe.
 
1994: Reckitt & Colman acquires Lehn & Fink Products, including Lysol.
 
1995: Reckitt & Colman sells the Colman’s food business.
 
1996: Benckiser continues its expansion into the Baltic countries, Belorussia, China and Israel.
 
Before the turn of millennium, in 1999, Reckitt and Benckiser merge their operations. The united CPG firm would continue to pick up leading brands and businesses that would expand its reach globally and into new categories. Among those moves were the acquisitions of: Oxy, a leading household business in Korea in 2000; Boots Healthcare International in 2006, which allowed it entry into the over the counter (OTC) healthcare market; and Adams Respiratory in 2008, which enabled RB to enter the USA OTC market with Mucinex cough remedy.
 
Taking Their Vitamins
One of Reckitt Benckiser’s high-profile purchases of 2012 was that of Schiff Nutrition, a move that was in lockstep with the company’s plans to operate in key areas related to maintaining consumers’ health.

"We are laying the foundations for RB to succeed in a world where health and hygiene play an increasingly important role in terms of both economic and social development,” said CEO Rakesh Kapoor, upon release of his company’s 2012 performance.

Looking at 2012 figures, 44% of RB’s core net revenue came from its Hygiene operations and 23% from its Home business. Health accounted for 25%, according to RB.

Hygiene net revenues in 2012 increased to £3,682m with life for like growth of 6%, driven by strong growth in the Dettol/Lysol franchise. According to RB, new initiatives such as Dettol Daily Care and Re- energize in emerging markets and the recently launched Lysol No-Touch Kitchen System underpinned the strong performance.

During 2012, RB’s Finish continued to perform well in a number of markets globally, and particularly in the US where Quantum and All-In-1 tablets and gel packs have gained market share, according to the company. Depilatory brand Veet delivered good growth too behind initiatives such as the Veet Easy Wax Electrical Roll-On. RB’s Harpic line enjoyed very strong growth in Latin America and Asia Pacific (LAPAC) and Russia, the Middle East and Africa (RUMEA) by driving category penetration via consumer education and increased distribution.

Net revenues for its Home unit rose in 2012, like for like (LFL), by two percent to £1,966m. The firm attributed this growth to Vanish, where there has been “excellent growth in a number of emerging market countries,” combined with more stable market shares in ENA, a market where RB says its has “lapped competitive entries.”  Further, growth was also driven by Air Wick which produced a good performance behind Freshmatic, candles and Flip & Fresh.

For the fiscal first quarter of 2013, Hygiene sales continued to roll. Net revenue rose LFL 9% and total growth was 7% to £1,025 million, according to the company. Home care sales remained on the plus side too. Net revenue increased to £488m with LFL growth of +2% and total growth of +1%, according to RB.
 
A Busy Launch Pad
Following up its solid performance in the first quarter, RB’s NPD activity has been steady. Among the planned rollouts for the first half of 2013 are:
• Finish Quantum with Power Gel;
• Dettol Kitchen Gels in India and South Korea, which is said to kill 100 times more germs than an ordinary dish wash.
• Dettol Radiance Soap and Body Wash
• Veet Naturals Hair Removal Cream
• Vanish Gel Treat and Go
• Air Wick Filter & Fresh Car; and
• Air Wick EverFresh Gels, slow-release gels for bathrooms.
 
Also new in the US market are products from Lysol and Air Wick.

Lysol has four new SKUs under its new Lysol Power & Free line of hydrogen peroxide cleaners (Multi-Purpose Cleaner, Bathroom Cleaner, Toilet Bowl Cleaner, and Toilet and Bathroom Wipes) as well as Lysol Touch of Foam, a hand wash product.

While Touch of Foam boasts serious germ protection—it’s said to offer 10 times more protection against germs than the leading national competitor—RB has made it hip too via a partnership with designer Cynthia Rowley. Rowley invited consumers to take part in a design contest where they were able to create a personalized label for the product. Rowley will select her favorite design, and Lysol will award that grand prize winner an all-expenses-paid trip for two to New York City for September 2013 Fashion Week and a $5,000 shopping spree.

Air Wick, which has been refreshing scents in consumers’ homes since 1943, has added a half dozen new limited edition fragrances inspired by the US’s national parks. With proceeds supporting the National Park Foundation, Air Wick developed the scents inspired by the unique flora and fauna of popular parks such as the Grand Canyon, Denali and American Samoa. 
 
Looking to Latin America
Like its NPD activity, Reckitt’s appetite for international growth hasn’t slowed either. In February it announced a three-year alliance with Bristol-Myers Squibb that includes several OTC consumer health care brands in Brazil, Mexico and certain other parts of Latin America, including Dermodex, a leading diaper rash treatment.

Under the terms of the agreement, RB will initially pay $482 million to license the brands from BMS, which will continue to manufacture them for three years. The deal also includes personnel, supply contracts and an option to acquire legal title to the related IP at the end of the collaboration.

Kapoor said this latest “transaction creates a material consumer health care platform, infrastructure and distribution network for RB in both Brazil and Mexico. As such, it is an important step in building our consumer health care presence in Latin American emerging markets.”
 
You can read more about Reckitt Benckiser’s performance in 2012 in HAPPI’s annual “International Top 30 Report,” which is due out in August.
 
 


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