Reckitt Benckiser (UK)

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Reckitt Benckiser is the world #1 in household cleaning, with a huge portfolio of well-known brands ranging from cleaning products Lysol, Dettol, Harpic, Calgon and Vanish to automatic dishwasher tablets Finish, Electrasol and Jet-Dry. Virtually the only household care segment in which it doesn't have a major presence is laundry detergents, where it has avoided competition with traditional leaders such as P&G and Unilever. In 2005, the group bolstered its small portfolio of over-the-counter medicines with the purchase of Boots' healthcare products portfolio, which includes brands such as Nurofen and Strepsils. It strengthened this business further by buying US company Adams Respiratory, makers of Mucinex, in 2007. The group began 2010 with net cash of around £220m, raising speculation that a significant new acquisition could be on the cards. Mid-year it issued an offer to acquire SSL International, owner of Durex condoms and Scholl footcare products outside the US, followed by Indian marketer Paras Pharmaceuticals. Reckitt Benckiser was formed in 1999 from the effective takeover of British household goods company Reckitt & Colman by Dutch group Benckiser.

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Brands

Finish Mucinex
MegaRed Calgonit
Disprin Veet
Spray 'n Wash Calgon
Airwick Dettol
Jet-Dry Lysol
Lemsip Glassex
Gaviscon French's
Senokot Frank's
Mortein Delsym
Nurofen E45
Clearasil Aqeo
Strepsils Optrex
K-Y Durex

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 21st Jul 2016: Havas Worldwide's hold on Reckitt Benckiser's brand portfolio weakened further with the appointment of McCann Worldgroup to take over global creative for anti-bacterial cleaner Dettol / Lysol, the group's single biggest brand by sales. However, at the same time RB reaffirmed its continuing relationship with Havas, with a new but slightly vague brief as lead agency for "new strategic initiatives".

Adbrands Weekly Update 5th May 2016: Reckitt Benckiser received a fine of just A$1.7m (around US$1.3m) for misleading Australian consumers in the packaging and marketing of its painkiller Nurofen. Australian regulators launched the case three years ago after discovering that the quantity of active ingredient in premium-priced "pain-specific" versions of Nurofen, supposedly targeting period pain, or migraine pain or other ailments, was identical to lower-priced regular Nurofen and had no improved effect. It had been seeking a fine of A$6m.

Adbrands Weekly Update 31st Mar 2016: Ads of the Week: "Powerball vs Ageing". Wieden & Kennedy London once again achieves the impossible by making witty, imaginative, stylish advertising for that most mundane of products, dishwasher detergent. To paraphrase Will Smith in Men In Black, they make Finish look *good*. The latest concept shows how Finish helps deal with simple human issues like ageing or (in another execution, available on our Facebook page) heartbreak. Effortlessly brilliant.

Adbrands Weekly Update 17th Dec 2015: An Australian court ordered Reckitt Benckiser to withdraw a range of variants for its analgesic masterbrand Nurofen because they mislead customers. RB markets separate enhanced versions of Nurofen, each of which supposedly "targets" a different type of pain, for example, migraine pain, back pain, period pain and so on. Yet the four enhanced versions of Nurofen are essentially identical to one another. "None of the four products is any more or less effective than the others in treating any of the particular symptoms," concluded the judge. In addition, all contain exactly the same amount of active ingredient ibuprofen as standard Nurofen, which is sold at almost half the price. The pain-specific versions use it in a slightly different form as 382mg of ibuprofen lysine, but it is still equivalent to 200mg of standard ibuprofen. RB has fended off complaints regarding these marketing claims for more than two years in Australia and other countries, but this is the first time a court ruling has forced the company to take action. RB argues that the descriptors added to the enhanced Nurofen "help consumers navigate their pain relief options, particularly within the grocery environment where there is no healthcare professional to assist decision making." The high-profile case has prompted other local regulators to take a look at Nurofen claims. The UK's Advertising Standards Authority announced it had opened its own investigation this week.

Adbrands Weekly Update 20th Aug 2015: Regulators effectively blocked the sale by Johnson & Johnson of lubricant KY jelly in the UK to Reckitt Benckiser for at least eight years. Because of the local dominance of its Durex condom brand, RB must sub-license KY to another manufacturer until 2023. The sale has already been approved in all other global markets except New Zealand where it will remain in Johnson & Johnson's portfolio.


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Background

Free for all users | see full profile for current activities: The Colman in Reckitt & Colman was originally the well-known mustard manufacturer (sold off to Unilever in 1995). Jeremiah Colman set up a mill in Norwich, England in 1814, processing flour and mustard seed. In 1823, his nephew James joined the business, which became J&J Colman. Keen not to waste any of the by-products from the milling process, they moved into starch and laundry whiteners around 1840. At around the same time, Isaac Reckitt acquired a starch factory in Hull, and also began making laundry whitener as well as polish. Inherited by his four sons, the business flourished, expanding overseas with an Australian factory in 1886. Two years later, the company went public in London.

By the early 20th century both companies had fast-growing international businesses, and Colman's had a virtual monopoly of the British mustard industry, having bought up all of their regional competitors. Rather than fight for trade, Colman and Reckitt formed a partnership in 1913 under the name Atlantis, initially to enter South America. Subsequently this operation expanded to encapsulate all of both companies' international operations, including the acquisition of US food company RT French in 1920. Also in 1913, Reckitt & Sons became a partner in the UK-based Chiswick Polish Company, making a range of metal and shoe polishes, including top brand Brasso. This company also grew rapidly, introducing a wide range of other household goods, and renaming itself Chiswick Products in 1930.

In 1933, Reckitt & Sons introduced germicide Dettol, which rapidly became one of the company's most successful brands. Five years later, Reckitt and Colman sealed their highly productive Atlantis joint venture with a formal merger. Chiswick Products also became a wholly owned subsidiary of the group in 1954. The group continued to grow through acquisition, especially in the US. In 1985, air freshener group Airwick Industries joined the business, followed in 1990 by American household products group Boyle-Midway, whose brands included Woolite, Wizard and Sani-Flush. An attempt to enter the US condiments market was less successful. The group had acquired Durkee's Famous Foods in 1986, but finally gave up the business, selling off the seasonings division in 1992. In 1994, Reckitt & Colman paid Eastman Kodak $1.6bn for Lehn & Fink, makers of leading American disinfectant Lysol. To fund the L&F purchase, Colman's foods was sold to Unilever for $405m a year later, and the US personal products division to a private investment group for $123m in 1996. The latter included a miscellaneous collection of non-core baby wipes, bubble bath and breath spray brands.

In 1997, the group acquired fabric cleaners Spray'n Wash, Vivid, Yes and leading glass cleaner Glass Plus from SC Johnson for $160m. Also that year the group formed a joint venture with Indian pharmaceutical company Nicholas Piramal to market their respective consumer healthcare brands. Reckitt Piramal began operations in January 1998, quickly becoming the # 1 OTC manufacturer in that country. It later changed its name to Reckitt Benckiser India.

However, during 1998 the company was dogged by a series of competitive problems, particularly in the US following the L&F acquisition. These culminated in a profits warning in late 1998. Chief executive Vernon Sankey offered his resignation early the following year, claiming the company needed a fresh perspective. A few months later the group unveiled plans for a complete transformation, revealing that it would merge with Dutch group Benckiser (see Coty profile for more) to create the world's biggest non-laundry household products group. The deal was framed as a purchase by the British company of its Dutch counterpart - Reckitt shareholders received the majority share in the new company and company HQ remained the UK. However it was in effect a reverse takeover by the Dutch company - most of Reckitt's senior management team left the business as part of the deal, and Benckiser boss Bart Becht was installed as CEO of the enlarged business.

Just six days after finalizing the merger, Reckitt Benckiser saw its share price plunge after issuing another profits warning. The group blamed lack of investment in Reckitt & Colman's brands in 1999 for a fall in profits. These were later revealed to be down sharply by 88% to £52.5m, worsened by reorganisation and merger costs of almost £260m. The group promised to accelerate revenues in 2000, and cut 75 of its smaller products to concentrate on 50 key brands. CEO Becht lived up to his promise, shedding a number of small household brands in Australia and New Zealand (including Janola, Aura, Bluo, Longlife, Scotts and Soft as Soap), as well as its Gesal plant care business in Italy and Austrian skincare company Savoderm.

The group then announced the acquisition of Korea's #4 household goods business Oxy Co for $128m. Its brands include Oxy Clean fabric treatment, Tinkerbell air care, Cherie fabric softener and Thirsty Hippo de-humidifier. However at the same time, Reckitt announced the launch of a consolidation drive to merge most of its regional brands into 15 global "power brands". Over the following months a series of brand mergers were announced. The UK's Dettox brand was merged into Dettol during 2002; and Haze air fresheners worldwide into Airwick. UK-based depilatory product Immac was rebranded as Veet, its name in other territories. In a separate development Reckitt withdrew its well-known UK household insecticide Vapona in early 2002 after evidence that one of its ingredients could cause cancer.

In 2003 the group was reported to be in negotiations to acquire SSL International, which owns Durex condoms and Dr Scholl footcare products in the UK, but that deal failed to materialize. Far more substantial was the purchase of Boots' international healthcare products division in 2005 for £1.9bn. RB returned to SSL in 2010, tieing up a deal to acquire the business for £2.5bn. See full profile for current activities


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