Armor All Products Corp.

Armor All Products Corp.

6 Liberty Drive
Aliso Viejo, California 92656
U.S.A.
(714) 362-0600
Fax: (714) 362-0619

Public Company
Incorporated: 1972 as Very Important Products, Inc.
Employees: 150
Sales: $216.78 million (1995)
Stock Exchanges: NASDAQ
SICs: 2891 Adhesives & Sealants

Armor All Products Corp. develops and markets consumer chemical products that are used to protect and beautify automobiles and homes. Its brand names include Armor All, Rain Dance, Rally, E-Z Deck Wash, as well as others. Through its original Armor All Protectant, the company has established the Armor All brand name as one of the most recognized in the United States. In the 1990s, Armor All was parlaying that name recognition into sales growth from new lines of auto and home care products.

1970s Origins

The company that would become Armor All was started in 1972 by entrepreneur and marketing maestro Alan Rypinski. The chemical product upon which the company was based, though, had been under development since the early 1960s in a chemist’s garage. That California polymer chemist and automobile aficionado had created the substance in an effort to develop a chemical treatment that would protect and prolong the life of the rubber parts of his new cars. What he developed was a treatment that prevented the harmful effects of ozone and ultraviolet rays from penetrating the surface of rubber and plastic parts, including tires and windshield wiper blades. A pleasing side effect of the chemical was that it left a clean, glossy finish that made even aged rubber and plastic appear new.

The milky substance that would one day become famous as Armor All Protectant languished in its creator’s garage for five years before it was discovered. Rypinski came across the stuff in the late 1960s when he was trying to restore the interior of his vintage Jaguar. He was referred to a chemist that had developed a compound for just that purpose. Rypinski tried the treatment and liked it so much that he purchased the rights to license the product in 1967. In fact, the protectant had already moved out of its inventor’s garage and into the market by the time Rypinski discovered it.

Armor All had first hit the shelves in 1966 under the name “Trid-on,” or “no dirt” spelled backwards. Trid-on was sold by the owner of a specialty car shop in Southern California. He mixed Trid-on in 55-gallon drums in his back room and sold the brew in four-ounce plastic bottles to patrons of his store. By 1967 the substance had also made its way into the Briggs-Cunningham Automotive Museum as well as the Parnelli Jones new tire stores, where it was used to enhance tires and other rubber goods. Enter Rypinski. He took over licensing rights to the product and later purchased the marketing and manufacturing rights.

In 1972 Rypinski incorporated a company under the name Very Important Products, Inc., through which he began marketing Armor All Protectant. He began by hyping the substance as a sort of wonder product through a sales force that he dispersed across the country. Those regional sales managers worked out of motor homes, traveling to county fairs, trade shows, and shopping malls to demonstrate and sell Armor All. The public embraced Armor All. First-year sales hit $200,000 and Rypinski’s new venture was up and running.

Rypinski spent seven years marketing Armor All Protectant. His savvy marketing blitz helped the product achieve significant name recognition in a relatively short span of time, particularly for a product that was virtually creating its own industry. Rypinski’s basic goal was simple: get the product into the hands of the people. He knew from experience that if they tried Armor All they would most likely buy it again. He was right. By the late 1970s, demand for Armor All Protectant had soared and Rypinski’s one-product company was generating millions in sales and profits.

McKesson Acquires Armor All

Rypinski sold all of the rights to the Armor All brand name and protectant in 1979 to San Francisco-based consumer products company McKesson Corp. Rypinski, who was only 40 years old at the time, signed away his product in a deal that put $50 million into his pocket over a period of five years. McKesson’s executives believed that Armor All was worth the huge payout. Indeed, they hoped to use their deep corporate pockets to market and distribute Armor All much more aggressively, not only in the United States but also abroad. Rypinski stayed with Armor All for five more years, using McKesson’s fat bankroll to sustain his marketing push.

Under McKesson’s corporate wing (McKesson spun Armor All off in 1986, but remained the majority shareholder of the publicly traded Armor All Products, Inc. into the mid-1990s) Armor All Protectant’s sales surged to $70 million annually in 1984. Likewise, annual profits ballooned to an impressive $11.76 million. Still, although Armor All was a standout performer from a profit perspective, its total sales volume made it a relatively meager slice of the multibillion-dollar McKesson consumer products pie. In fact, McKesson executives were hoping to parlay the venerable Armor All brand name into much bigger returns. Holding them back during the early 1980s, though, was the huge amount of capital that was funneled to Rypinski as a result of the 1979 buyout agreement. The $50 million cash drain squelched, for example, plans to expand overseas.

Rypinski left Armor All in 1985 to pursue other entrepreneurial interests. Among other endeavors, as chief executive of Rypper Corp. (a worldwide marketer and distributor of auto wheels) he tried to market a newly patented wheel-cover system that bonded to a factory steel wheel. The product ultimately failed. He also became involved in an effort to market POGs—colorful, round, inch-and-a-half cardboard disks that once served as milk bottle cap linings—which were achieving fad status on Orange County, California playgrounds in the early 1990s. But Rypinski’s management days at Armor All were not finished.

New Directions in the 1980s

Stepping into the president slot at Armor All in 1984 was Jeffrey Sherman, who was only 35 years old at the time. Sherman had joined Armor All in 1978 as an accountant in the finance department. His reserved management style contrasted starkly with Rypinski’s outgoing, entrepreneurial nature. Because Armor All had moved away from its “small company” roots and toward a more traditional corporate culture, however, Sherman’s style seemed like a good fit. His goal was to use excess cash to broaden Armor All’s product line and expand into foreign markets. That strategy reflected the fact that Armor All Protectant had matured, achieving an impressive one-third share of the entire $600 million automobile appearance market for waxes, polishes, and other specialty cleaners.

Recognizing the limited opportunities to increase sales of Armor All Protectant in the U.S. market, Sherman began looking overseas. Armor All entered Japan in 1984 and managed quickly to grab a 25 percent share of that rich market from a home-grown competitor. Armor All reached into West Germany in 1985 and enjoyed similar results. At home, Sherman began looking to penetrate untapped market segments. For example, the company began developing products and pitches to lure more women (Armor All’s core market was males aged 18 to 49). Armor All also began distribution of a videotape to high school driver education programs; the tape equated a clean car with safe driving.

Importantly, Sherman also pioneered new products during the mid-1980s that exploited the famous Armor All name. By the late 1980s, in fact, Armor All was selling four products: the protectant, a cleaner, a car wax, and a car wash. The momentous strength of the Armor All name was evidenced by the success of Armor All Car Wax, which quickly surpassed Rain Dance car wax and was closing in on long-time industry leader Turtle Wax by the late 1980s. Armor All managed to achieve such gains with savvy marketing ideas. For example, it began pitching its car wax to women by way of an easy-to-use paste wax packaged similarly to mousse-style hair care products.

Armor All’s sales surpassed $100 million in 1987 and profits increased to $17 million. Then, in 1988, Armor All purchased Borden Co.’s car care products line, which included wellknown name brands Rain Dance, Rally, and No. 7. That acquisition brought a broad line of waxes, polishes, and additives to Armor All’s offerings. The Borden purchase, combined with sales gains related to new product introductions, pushed the company’s sales to $126 million in 1988 and then to $162 million in 1989. Unfortunately, profits failed to keep pace with revenue gains, evidencing underlying problems at Armor All. Indeed, after dominating much of the auto appearance products industry and posting successive sales and profit gains for nearly two decades, the company’s performance was beginning to slip. Net income dropped to less than $20 million in 1990 and plunged to less than $7 million in 1991.

Company Perspectives

We believe our strengths lie in our brands, our people and our financial resources, which underpin our ability to grow. The face of Armor All is changing, and we are positioned for the future.

Challenges in the 1990s

Armor All’s problems going into the early 1990s were multi-fold. Although Sherman had achieved notable successes with Armor All’s overseas push and product line expansion, the efforts had failed to produce the expected profits and had cost the company dearly in development and marketing expenses. Furthermore, Armor All’s management team seemed unable to cope with the transition from a one-product company to a multiline marketing corporation. At the same time, Armor All was facing aggressive new competition. After years of buffeting more than 100 would-be competitors to its protectant, Armor All failed to quash a product introduced in the late 1980s by the STP division of First Brands Corp. Dubbed “Son of a Gun,” the low-cost Armor All imitation product swept into the marketplace in the wake of a massive marketing campaign funded by First Brands. By 1990 Son of a Gun had stolen ten percent of Armor All’s market share.

With Armor All’s unblemished profit record at risk, Sherman resigned from the top post. After a short interim, he was replaced in 1991 by Kenneth Evans. Evans was a seasoned consumer products executive, having served as president of Thompson and Formby (paints and sealants) before working as a marketing executive and vice-president for the Do-It-Yourself division of Lehn & Fink. Evans quickly surmised that Armor All’s operating strategy was obsolete given the rapidly shifting dynamics of the car care products industry. Armor All was still depending on its core protectant product for nearly three-quarters of its sales. Because that market niche had matured, Armor All would inevitably face lower profit margins and lower growth rates.

To overcome the company’s dependence on its main product, Evans vowed in 1991 that within five years Armor All Products, Inc. would be generating less than 25 percent of its total revenue from Armor All Protectant. To that end, Armor All launched a series of new products beginning in the early 1990s. In 1992, for example, the company introduced Armor All Tire Foam Protectant, which was designed specifically to clean car tires. It followed that with Armor All Quicksilver Wheel Cleaner (which complemented its Armor All Car Wash), Spot & Wash Concentrate products, and wax products. In addition to diversifying, moreover, Evans initiated an aggressive effort to chase foreign market share. Late in 1991, for instance, Armor All agreed to have seasoned exporter S.C. Johnson handle its sales in foreign markets.

Evans also began cutting costs as part of an effort to help Armor All compete in an increasingly competitive market segment. Interestingly, he convinced Armor All’s founder, Alan Rypinski, to rejoin the company in 1992 as chairman emeritus. Evans hoped that Rypinski would be able to help him identify new markets and opportunities. To that end, in the mid-1990s Armor All branched out into the growing home care products arena with the purchase of E-Z Deck Wash brand name and business. It quickly broadened that popular product line to include several products (all bearing the Armor All brand name), including WaterProofing Sealer, Deck Protector, Vinyl & Plastic Protectant, Vinyl Siding Wash Kit, and Multi-Purpose Cleaner.

By 1995, earlier than expected, Armor All had achieved its corporate goal of reducing the portion of revenues contributed by Armor All Protectant to less than 25 percent. The result of that and other accomplishments was a surge in sales and a timely profit boost. Sales climbed from a 1990s low of $134 million in 1993 to $217 million in 1995 (fiscal year ended March 31, 1995), as net income climbed back toward $25 million. For the remainder of the decade, Armor All planned to ply the Armor All brand name to sustain international growth and add new products.

Further Reading

“Armor All Founder Rypinski Rejoins Company,” Aftennarket Business, December 1, 1992, p. 12.

Cook, Dan, “Armor All’s New Boss Moves To Buff Up Its Image,” Orange County Business Journal, February 24, 1992, p. 1.

Kennedy, Leslie, “Armor All Founder Alan Rypinski Rejoins Company,” Business Wire, October 16, 1992.

O’Dell, John, “Chinks Develop in Armor All’s Market Share,” Los Angeles Times, March 25, 1990, p. D4.

Pool, Charles, “Corporate Profile for Armor All Products Corp.,” Business Wire, October 30, 1992.

Schlax, Julie, “A Good Reason To Mess with Success,” Forbes, September 19, 1988, p. 95.

Smith, Sara, “Armor All Products Corp.,” Fortune, April 11, 1988, p. 71.

Sullivan, J. L., “Armor All Hawker Turns to Kid’s Stuff,” Orange County Business Journal, April 18, 1994, p. 1.

Warner, Fara, “Armor All Wants To Clean Some Son of a Gun’s Clock: New Products, Global Brands and Niches Restore Lost Sheen,” Brandweek, October 18, 1993, p. 32.

—Dave Mote