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A Brand Like a Friend

By Melissa Meisel, Associate Editor | June 10, 2013

A look back at 50 years of innovation at Henkel.

In 1876, a twenty-something merchant with an interest in science, Fritz Henkel, founded Henkel & Cie in Aachen, Germany and marketed his first product, a detergent based on silicate. Over the ensuing years and decades, Henkel’s descendants and thousands of their employees built the company into a global household and personal products industry powerhouse. 

Fast forward to 1965 (one year after the debut of Detergent Age, now known as Happi), when Henkel rolled out Persil 65. This innovation, containing temperature-dependent foam control, was suitable for drum-type washing machines, which were gaining a dominant market position. A year later, Henkel broadened its range of detergents with Dato, for modern white fabrics; Weisser Riese, a flanking brand of heavy-duty detergent with powerful whitening agents, and Rivonit for industrial dishwashers. In 1967, it launched the light-duty detergent, Fewamat, for automatic washing machines, and Henk-o-mat, a prewash detergent for washing machines.

Today, Henkel
 markets a wide range of well-known consumer and industrial brands in North America, including Dial soaps, Purex laundry detergents and softeners, Right Guard antiperspirants and got2b hair care. On a global scale Henkel operates worldwide with leading brands and technologies in three business areas: Laundry & Home Care, Cosmetics/Toiletries, and Adhesive Technologies. Henkel holds leading positions both in the consumer and industrial businesses with well-known brands such as Persil, Schwarzkopf and Loctite (its adhesive brand). Henkel employs almost 50,000 people worldwide and is headquartered in Düsseldorf, Germany.

Recent rollouts for the brand include Dial Coconut Water & Bamboo Leaf Extract soap and body wash, as well as Dial Skin Therapy with Himalayan Pink Salt and Dial 24-hour Odor Armor for Men. Right Guard also recently launched Right Guard Xtreme Fresh antiperspirant and deodorant. A lot has changed at the company during the past 50 years, especially when it comes to its stable of brands.

“As far as beauty and personal care is concerned, Henkel has been successful due to smart acquisitions of large, well-known brands such as Schwarzkopf hair care in 1985 and The Dial Corporation in 2004,” noted Tim Barrett, a US analyst with Euromonitor, Chicago. “In hair care specifically, Henkel has not only been on the forefront of trendsetting with hip and high-performance brands like göt2be, it has done so by targeting a wide range of consumers with affordably priced products.”
In the Groove

In 1974, Henkel acquired a share in The Clorox Company, USA, to facilitate the production and sale of certain products developed by Henkel for household and bulk consumers.

In 1980, Henkel acquired Amchem Products Inc and Parker Chemicals (1987), two producers of adhesives and specialty products for the surface treatment of metals with chemicals, thus gaining an entry into the automotive industry.
Also that year, Dr. Konrad Henkel took over as chairman of the supervisory board and the shareholders' committee. He was the last member of the Henkel family to be president and CEO of the company, succeeded by Dr. Helmut Sihler. Henkel also strengthened its position in the cosmetics retail trade with the acquisition of the Aok facial care range from von Heyden GmbH in 1983. Two years later, the company went public.

In 1986, Persil phosphate-free was launched in Germany, the Netherlands and Switzerland. In the US, The Henkel Research Corporation was established in Santa Rosa, CA.

News of the ‘90s

In 1995, Henkel acquired the cosmetics company, Hans Schwarzkopf GmbH. After the integration, in 1997 the business sectors brand-name products were assigned to Schwarzkopf & Henkel Cosmetics GmbH, Düsseldorf, and hair salon products to Hans Schwarzkopf GmbH & Co KG (Schwarzkopf Professional), Hamburg, respectively.

Henkel was one of the first soapers to recognize the potential of unit dosage when Persil Tabs were introduced in 1998 and later rolled out to other Henkel detergents. Also in 1998, Henkel acquired Dep Corporation in Los Angeles, and entered the US hair care market. Further upstream, a joint venture with BioHenk AS in Tromsø, Norway, processed shrimp shells to obtain a new raw material for the cosmetics industry (Chitosan brand).

On Aug. 1, 1999, Henkel's Chemical Products business sector was carved out and became a legally independent entity under the company name Cognis. Years later, in 2010, Goldman Sachs and Permira sold Cognis to BASF for nearly $4 billion.

Dr. Konrad Henkel, honorary chairman of Henkel, died on April 24 at the age of 83. More than 6,000 employees and retired employees memorialized him in Henkel's Düsseldorf headquarters.

‘Dial’ing It Up a Notch

The company celebrated its 125th anniversary in 2001 with the motto, "125 years.focus:future." Henkel realigned its global businesses along two lines: Brands and Technologies. This strategic redirection was the basis for a series of major decisions. Cognis, the former Chemical Products business sector, was sold to a consortium of private equity firms. The European joint venture Henkel-Ecolab was dissolved; the strategic equity ownership in Ecolab Inc was maintained. The redirection was also expressed in a new motto, “A Brand like a Friend.”     

Three years later, Henkel made a new friend when it acquired The Dial Corporation, Scottsdale, AZ—which remains the biggest acquisition in the company’s history. This purchase gave Henkel a strong foothold in the North American market.
“One of the greatest innovations in soap during the past 50 years was the launch of Dial, the first antibacterial soap, in 1948,” noted Carrie Mellage director, consumer products, Kline & Company, Inc., Parsippany, NJ.

More Millennial Moves

Persil celebrated its centennial anniversary in 2007. Later that year, new US headquarters opened in Scottsdale, AZ. The site includes 21,000 square meters of office space and 12,000 square meters for laboratories and technical facilities.
In 2008, Henkel sold its stake in Ecolab Inc. and expanded its household cleaner offerings with the debut of Terra Activ. All five product formulas are based on renewable raw materials.

In 2009, Henkel rolled out innovative ideas such as Persil ActicPower, a detergent that works well in water temperatures of 15°C and Syoss, which is billed as professional hair care at an affordable price. The Syoss launch was Europe’s most successful hair care introduction that year.

In January 2011, Henkel established the Fritz Henkel Foundation, which serves as the umbrella for the company’s “social engagement” and underscores Henkel’s long-term commitment for societal concerns that extend beyond its direct business interests.

In March 2012, Henkel presented its new Sustainability Strategy 2030. At the core of this is the goal of achieving more with less and tripling its efficiency. The new sustainability strategy applies to all business sectors and the entire value chain. 

Henkel closed 2012 with a bang as sales rose 5.8% to a record 16.5 billion euros. All three business sectors contributed to organic sales growth and further expanded market shares in their relevant markets. Laundry & Home Care posted an increase in organic sales of 4.7% and the beauty care business sector posted growth of 3.1%.

“2012 was the most successful year for Henkel so far: we achieved excellent results in a highly volatile and competitive market environment and met or exceeded all financial targets,” said Henkel CEO Kasper Rorsted. “All three Henkel business sectors showed profitable growth with expansion of market shares in their relevant markets. We also delivered on the ambitious financial targets we set in 2008 for the period up to 2012. We have substantially strengthened Henkel’s competitiveness, establishing a strong foundation for our future growth.”
The gains continued in 2013 as first quarter sales inched up .6% to just over 4 billion euros.
 “We increased both sales and earnings in the first quarter of 2013 despite a challenging market environment with declining markets in Western Europe and weak global industrial demand,” said Rorsted. “Both Laundry & Home Care and Beauty Care outperformed their relevant markets while our Adhesives business was affected by weaker than expected demand from industrial customers. Nevertheless, we were able to substantially improve the profitability of all our business sectors.”
Although he expects the global economic environment to remain difficult, Rorsted expects demand to improve in the second half and is confident that Henkel will attain its goal of 3-5% organic sales growth in 2013.
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