Scott Luton (00:12):
Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family of programming. We take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab of global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.
Scott Luton (01:10):
Hello, and thanks for joining us. I’m your host Scott Luton, and welcome to this edition of this week in business history for May 5th. Thanks so much for listening to the show. Hey, did you catch Nick rumor’s episode last week? I really enjoyed his show and especially his passion. If you know anything about Nick, then you know that he’s especially passionate about taking action and driving real change from a sustainability and climate change perspective. One other leader that is passionate about driving change is Enrique Alvarez. With vector global logistics. We are proud to support a recent initiative that vectors leading to help our friends in India that are fighting against COVID-19. Please take a moment to check out the link in the show notes below for how you can join us in this critical initiative. Speaking of inspiring business leaders, Greg white, and I were fortunate to continue our supply chain leadership across Africa series this past week where we featured two very inspiring business leaders.
Scott Luton (02:14):
Jenny Froome was say pics based in South Africa and Zucca ego [inaudible] with Kimberly Clark based in Nigeria, who goes by, uh Zucca for short, fascinating and uplifting conversation. They both shared so much perspective Zuka as she was giving advice to other women in business and industry said, quote, bring value to the table and you will always be welcomed. So very true. You may want to hear the rest of a Zucca story. I’ll include the link in the show notes below and now onward and upward. Let’s get back to this week in business history this week, I’m going to dive deeper into a company that we all know the Clorox. In fact, we’ve been fortunate to interview some of their senior leaders in a few really neat discussions before and during the pandemic, which of course has had a major impact on the company’s business. Rick McDonald, the chief supply chain officer at Clorox has joined us for a couple of episodes, and it’s incredible to see his passion and love for the culture and the team at Clorox.
Scott Luton (03:24):
So let’s see where it all began with the Clorox company. So stay tuned and as always, thanks again for joining us here on this episode of this week in business history, powered by our team here at supply chain. Now on May 3rd, 1913, five entrepreneurs would meet and set out on a new, exciting venture Edward Hughes, who was in the timber and coal business. Charles’ husband, the bookkeeper, Rufus Myers, a lawyer, William Hussey, a miner, and Archibold Taft, a banker who interestingly enough was the only one of the five that really knew chemistry. All five were based in Oakland, California, which sits just across the San Francisco Bay from the city of San Francisco. These entrepreneurs were highly focused on using Brian from ocean water to produce sodium hypochlorite bleach. They wanted to take advantage of the saltwater deposits that naturally form in the brackish ponds around the Bay area, each contributed a hundred dollars and the electro alkaline company was born just a few months later in August, 1913, the group would acquire a manufacturing site to begin making its first product Clorox liquid bleach ever wonder where the name Clorox came from.
Scott Luton (04:49):
Well, it’s a combination of the words, chlorine and sodium hydroxide. The main two ingredients when production cranked up Clorox would initially be packaged in a five gallon reusable container deliveries were made with a horse-drawn wagon and the electro alkaline company would sell Clorox to area companies and sites to disinfect their facilities. In 1914, the company issued stock raising about $75,000 in startup capital, which is around $2 million today. And first full year sales were $7,996. The company would struggle in those early years, but one of its earliest investors would jump into the fray and essentially transform the company. William and Annie Marie were quite a dynamic husband wife team, and both would be instrumental in ensuring the company’s long-term success. As a company was floundering in 1916, the Murray’s would jump into action to protect their investment. William Murray would optimize and streamline company operations while reworking the financing of the organization.
Scott Luton (06:01):
Annie Marie, who was already running a successful grocery store in Oakland, came up with a transformational idea instead of only focusing on large industrial customers. What if the company made bleach that appealed to consumers, especially homemakers, the company would do just that and create a less concentrated liquid bleach safe for home use any Murray would create awareness of this new version of Clorox by giving away 15 ounce sample bottles at her grocery store. The Murray’s efforts were truly paramount to the young companies early success, but also helping the company was the public’s growing awareness of the need to disinfect viruses had been discovered and identified in the 1890s. And the idea that microbes spread viruses would continue to gain steam in the ensuing decades. So Americans were looking for ways to kill germs in the early 20th century, but back to the electro alkaline company, Annie Murray’s innovative product ideas and guerrilla marketing was driving demand by the early 1920s.
Scott Luton (07:11):
The company was shipping Clorox to the East coast via the Panama canal, which by the way, they were one of the first West coast companies to do so up until that time, Jay, as John Greathouse points out in an exceptional 2018 Forbes article, most of consumer goods would flow from the East coast to the West coast via rail. The company’s manufacturing plant was producing about 48,000 bottles of bleach per day, but the name of the electro alkaline company didn’t exactly roll off the tongue. So on May 28th, 1928, the company would go public and rename itself to the Clorox chemical company. William Murray would become president of the company in 1929, a role that he would hold until his sudden and untimely death in 1941, by the 1930s, Clorox had become the industry leader dominating liquid bleach sales across the United States. The company would continue to grow and prosper, even weathering the great depression without laying off a single employee.
Scott Luton (08:18):
In 1938, the Clorox chemical company would establish its first East coast plant in Jersey city. New Jersey in 1940 Clorox was no longer produced with a rubber cork top and shifted to a plastic screw cap. During world war II, chlorine was being rationed due to its critical use for disinfecting wounds and many other things, but rather than dilute the product due to limited raw materials, the Clorox chemical company would elect to protect the quality brand that it had built and sell less product during the war in 1957, Procter and gamble would acquire the Clorox chemical company and rename it a Clorox company, but the move was challenged by others in industry, out of monopoly concerns and the federal trade commission would fight P and G in court for 10 years, 10 years imagine legal bills in 1967. The us Supreme court ruled that P and G must divest itself of the Clorox company thus on January 2nd, 1969, the Clorox company was independent once again, PG and the Clorox company would go on to compete with each other extensively, sometimes cutthroat in the ensuing decades.
Scott Luton (09:39):
Also in 1969 for the first time in 56 years, the Clorox company would release and begin selling an original internally developed product Clorox two color safe bleach. This would begin a strong growth oriented phase in the company’s history, especially B acquisition in 1969. Liquid plumber is acquired in 1970 formula four Oh nine is acquired in 1972, hidden Valley ranch salad dressing mixes are acquired, which is really a story in and of itself. Steve Henson had invented hidden Valley ranch dressing while trying to feed his crew, working in Alaska for all companies. It was a tough audience. They didn’t just eat anything. And Henson had to find a way to get them to eat what he had cooked, especially vegetables. So the scrambling part-time cook came up with a dressing based on what he had an old hand, buttermilk mayonnaise and a few spices and herbs.
Scott Luton (10:42):
And with that, the legendary American salad dressing loved the world over was born hidden Valley ranch. And yes, there was an actual hidden Valley ranch, which came into the picture after Steve Henson and his wife moved to California in his post Alaska days. But we’ll save that for another time. And those are just a few of the many moves that the Clorox company leadership team would make throughout the sixties, seventies and eighties, some successful, many unsuccessful forays into the detergent, wood staining and paper goods. And many other market niches were attempted. Some would say the company was struggling to find a successful diversification strategy. In 1988, the Clorox company would establish its global headquarters in downtown Oakland, California, while continuing to build out its enterprise across the world. In 1992, a new CEO entered the picture. Craig Sullivan, a 21 year Clorox veteran would become president and CEO shortly thereafter Sullivan would order a complete assessment company, finances strategy and overall product portfolio.
Scott Luton (11:58):
In particular, three components of the overall enterprise were identified as highly underperforming Prince castle, deer park, and the Mohr’s slash Domini lines. They accounted for 10% of company sales, 24% of the company workforce, but none of the profits, all three or soon sold off, that was just the beginning of what many of you as a company turnaround led by president and CEO, Craig Sullivan, one big thrust of Sullivan strategy proved to be monumental in early 1990s, only 4% of net sales or the Clorox company would originate outside of the United States. Sullivan would then build a team devoted to growing international sales to 20% by 2000. A big part of that international growth strategy would be fueled by acquisition. In fact, Clorox would spend $1 billion acquiring 26 companies between 1993 and 1997 of which 23 were companies not based in the U S in fact today, the Clorox company makes products in over a hundred countries.
Scott Luton (13:13):
In 2008, the company became one of the first major CPG manufacturers to develop and launch Alon of naturally derived cleaners. Its green works line in September, 2020 17 year company veteran Linda Rendell became CEO of the Clorox company. One of only 41 women that lead fortune 500 companies. We’ve got to do something about that. Rendell had been one of the key organizational leaders to launch the ignite strategy initiative, whose purpose is to ensure that environmental, social and governance priorities are at the top of the list. When it comes to factors that play a major role in corporate decision-making today, you might be surprised by the wide variety of brands that make up the Clark’s company’s portfolio, the Kingsford company well-known for its charcoal, glad trash bags, Brita, water filtration, equipment, Burt’s bees products, which is indeed named after Bert Quimbee, KC masterpiece, barbecue sauces and all that’s just a tip of the iceberg.
Scott Luton (14:21):
Of course, during the pandemic, Clorox saw a demand for some of its products at all time, historic levels, and the company had to scramble and get creative to find ways to ramp up production, but as always the Clorox company to pins on its single most important business advantage, at least in my opinion, it’s people in Atlanta based department, crew leader, Carlton Mitchell, who works at a Clorox factory that makes bleached other cleaners. He was interviewed by embassy news in May, 2020. He’s been with the company for over 20 years. Mitchell spoke of his team’s new noble efforts, same quote. When I came to work, it was a job I clocked out and I went home just entirely different. Now, now when I come in, it’s not just a normal nine to five job anymore. It’s a mission now in quote, it is a mission. Indeed love that and love what Carlton Mitchell in so many other manufacturing supply chain professionals have been doing to help us all for so long.
Scott Luton (15:26):
And especially during this pandemic, they are the salt of the earth and never get enough recognition. Many things have changed since 1916 at the Clorox company, but som thankfully have not innovation, quality purpose, still all in a day’s work. Well that just about wraps up this edition of this week in business history. Big thanks to you, our listener for tuning into the show each week. Most importantly, please check out the link in the show notes for more information on how to help healthcare efforts in India. Be sure to let us know how we’re doing. We’d love to earn your review on Apple podcast or any other podcast channels that only helps us get the word out much more effectively on behalf of the entire team here this week in business history and supply chain. Now this is Scott Luton wishing all of our listeners, nothing but the best. Hey, do good gift forward and be the change that’s needed. And on that note, we’ll see you next time here on this week in business history. Thanks for buddy.
