Procter & Gamble

Lore & Background

William Procter, an English-born candlemaker, and James Gamble, an Irish-born soap maker, both emigrated to the United States and settled in Cincinnati, Ohio. They met after marrying sisters Olivia and Elizabeth Norris, and their father-in-law, Alexander Norris, persuaded them to become business partners, founding the company in 1837. By 1858–1859, annual sales had reached $1 million with about 80 employees. During the American Civil War, the company supplied the Union Army with soap and candles, introducing soldiers nationwide to its products and boosting profits. In the 1880s, P&G launched Ivory, an inexpensive floating soap. William Arnett Procter, the founder’s grandson, introduced a profit-sharing program for workers in 1887 to reduce strike risk. The company expanded production beyond Cincinnati due to demand, and in 1911 began producing Crisco, a vegetable-oil shortening. P&G advertised heavily in magazines from the 1880s, and by 1921 its annual advertising budget reached $1 million. In the 1920s, it advertised on radio and from 1932 became a major sponsor of daytime serials, which became known as soap operas; it later sponsored and produced about twenty soap operas across six decades on television. International expansion began with the 1930 acquisition of Thomas Hedley Co. in Newcastle upon Tyne, England, establishing a UK base. Key product launches include Tide laundry detergent (1946), Prell shampoo (1947), Joy liquid detergent (1949), Crest fluoride toothpaste (1955), and Pampers disposable diapers. The company also purchased Charmin paper mills in 1957, entering tissue products, and introduced Downy fabric softener (1960) and Bounce sheets (1972). P&G owned Clorox from 1957 to 1968, but the U.S. Supreme Court ruled against the acquisition in 1967. Today, P&G operates five divisions: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care, with many brands holding over 25% market share globally. It generates 48% of sales in the U.S. and 52% abroad, manufacturing 90% of its domestically sold merchandise in the U.S. The company is ranked 51st on the Fortune 500 and 60th on the Forbes Global 2000.

Reader's Guide

Procter & Gamble’s significance stems from its evolution from a 19th-century soap and candle partnership into a dominant multinational consumer goods corporation. The company shaped modern advertising by pioneering full-page magazine campaigns in the 1880s, then becoming a major sponsor of radio serials in the 1920s and, from 1932 onward, daytime television dramas—coining the term “soap opera.” Its brands frequently command global market leadership, with many holding over 25% share in their categories. Ecologically, P&G manufactures 90% of its domestically sold merchandise in the United States, and its product portfolio spans five divisions: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. Notable innovations include the first floating soap (Ivory), the first fluoride toothpaste (Crest), disposable diapers (Pampers), and synthetic detergents (Tide, Joy). The company’s behavior includes a profit-sharing program initiated in 1887 to reduce labor unrest, and strategic acquisitions such as the 1930 purchase of Thomas Hedley Co. in England, which launched international expansion. P&G also briefly owned Clorox from 1957 until a 1967 Supreme Court decision forced divestiture. With 48% of sales in the U.S. and 52% abroad, the firm ranks 51st on the Fortune 500 and 60th on the Forbes Global 2000.

Did You Know?

• During the American Civil War, P&G won contracts to supply the Union Army with soap and candles, which introduced soldiers across the country to its products.