Procter & Gamble History
Procter & Gamble was formed in 1837, when William Procter and James Gamble met by chance. Procter was a candle maker in Cincinnati, Ohio. Gamble was a soap maker. The two entrepreneurs married sisters Olivia and Elizabeth Norris. After they became brothers-in-law, their father-in-law convinced them to go into business together. This marked the beginning of Procter & Gamble.
By 1859, Procter & Gamble reached $1 million in sales. The company earned contracts allowing them to supply the Union Army with candles and soap during the American Civil War. In the 1880s, Procter & Gamble introduced Ivory soap, intended to be used for both body and laundry. In 1911, the company began diversifying its product portfolio by producing Crisco vegetable shortening. Procter & Gamble began sponsoring several radio programs as radio became more popular in the 1920s and 30s. These shows then coined the term “soap operas.”
Over the next decades, Procter & Gamble branched out through acquisitions and unique product developments to produce revolutionary products including Pampers disposable diapers which was first test marketed in 1961. The company acquired products form Folgers Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell (Noxzema), Old Spice, Iams, Pantene and Max Factor.
In January 2005, Procter & Gamble acquired Gillette with its Duracell, Braun and Oral-B brands. This created the largest manufacturer of consumer goods at P&G, placing Unilever in second place but the company was required to spin off overlapping brands. The company sold its SpinBrush products to Church & Dwight, Rembrandt toothpaste to Johnson & Johnson, Right Guard, Soft and Dri and Dry Idea deodorants to Dial, Liquid Paper and Paper mate to Rubbermaid and in August 2009, Warner Chilcott bought Procter & Gamble’s prescription drug business for $3.1 billion.
In August 2014, after a record revenue year of $87 billion, P&G announced they were streamlining, dropping 100 brands to concentrate on only 65 which produced over 95% of the company’s profits. P&G sold off 43 cosmetics brands to Coty, Duracell batteries to Berkshire Hathaway, and its VapoSteam products. They acquired Merck Group’s consumer health division, renaming it as Procter & Gamble Health Limited which sells products mainly in India.
Though P&G is the largest consumer products manufacturer in the U.S., Johnson & Johnson remains a larger company in the health and consumer goods space.
Procter & Gamble Products
Procter & Gamble (P&G) is one of the biggest manufacturing companies in the world. Operating in 80 countries, Procter & Gamble specializes in consumer goods like pet foods, personal care products such as toothpaste and shampoo, and cleaning agents. In 2019, Procter & Gamble recorded more than $67 billion in sales, second to manufacturing giant, Johnson & Johnson.
Procter & Gamble is famous for manufacturing popular household and personal care brands such as:
In recent years, Procter & Gamble has been the subject of controversy. Its osteoporosis and bone loss drug Actonel, which had been marketed with Sanofi-Aventis, caused adverse effects in a number of patients. Actonel patients have experienced debilitating complications such as bladder cancer, bone fractures, and osteonecrosis of the jaw. Procter & Gamble was also fined by the European Commission for participating in a price-fixing cartel.
Procter & Gamble’s Actonel
Actonel (risedronate) was a brand-name prescription drug used to treat and prevent bone loss caused by conditions such as osteoporosis and Paget’s disease of bone. Actonel was developed by Procter & Gamble and gained FDA approval in 1998. Actonel was co-marketed in the U.S. by French pharma company, Sanofi-Aventis.
In December 2005, Procter & Gamble’s pharmaceutical division was involved in a research dispute for Actonel. British medical doctor Richard Eastell of the University of Sheffield claimed ownership of Actonel research and trial data. The Times Higher Education published a public report disproving these allegations and confirming that Procter & Gamble carried out the trials.
In 2006, Procter & Gamble Pharmaceuticals and Sanofi-Aventis filed a lawsuit against Roche Pharmaceuticals and GlaxoSmithKline claiming that Roche and GSK had made false and misleading claims about their osteoporosis product, Boniva, which were intended to deprive P&G and Sanofi of Actonel profit.
P&G divested their prescription pharmaceutical division to Warner Chilcott which then manufactured and marketed Actonel until the brand-name product’s discontinuation. Though Actonel is no longer made by P&G, the company may still face some liability for injuries caused by the medications.
A number of Actonel patients have filed lawsuits against Procter & Gamble for harm caused by Actonel. Actonel side effects include bone fractures, bladder cancer, and a rare bone condition called osteonecrosis of the jaw. Actonel patients have also reported ulcers and irritation in the esophagus, as well as low calcium levels in the blood. No announcements have been made regarding potential settlements; however, most claims will ultimately be addressed by drug Company Warner Chilcott.
New lawsuits for risedronate (generic for Actonel) may also be pending for generic manufacturers, unrelated to Procter & Gamble.
Procter & Gamble Misconduct
In April 2011, Procter & Gamble was fined by the European Commission for participating in a price-fixing cartel in Europe. A cartel is an agreement among competing firms. During this price-fixing cartel, Procter & Gamble formed an agreement with Unilever and Henkel to fix the price of competing products in order to reduce competition and increase profits.
Procter & Gamble was ordered to pay the Commission more than 211 million euros. Unilever was also fined 104 million euros. However, Henkel was not fined as they provided the tip-off that led to the cartel investigations and cooperated in the investigations.
The company has been involved in multiple controversies and subject to consumer criticism, but has also been prominent in addressing global concerns including environmental conservation and diversity in the workplace and marketing programs.