Soap and Detergent Industry
SOAP AND DETERGENT INDUSTRY
SOAP AND DETERGENT INDUSTRY. Traditionally, soap has been manufactured from alkali (lye) and animal fats (tallow), although vegetable products such as palm oil and coconut oil can be substituted for tallow. American colonists had both major ingredients of soap in abundance, and so soap making began in America during the earliest colonial days. Tallow came as a by-product of slaughtering animals for meat, or from whaling. Farmers produced alkali as a by-product of clearing their land; until the nineteenth century wood ashes served as the major source of lye. The soap manufacturing process was simple, and most farmers could thus make their own soap at home.
The major uses for soap were in the household, for washing clothes and for toilet soap, and in textile manufacturing, particularly for fulling, cleansing, and scouring woolen stuffs. Because colonial America was rural, soap making remained widely dispersed, and no large producers emerged. By the eve of the American Revolution, however, the colonies had developed a minor export market; in 1770 they sent more than 86,000 pounds of soap worth £2,165 to the West Indies. The Revolution interrupted this trade, and it never recovered.
The growth of cities and the textile industry in the early nineteenth century increased soap usage and stimulated the rise of soap-making firms. By 1840, Cincinnati, then the largest meatpacking center in the United States, had become the leading soap-making city as well. The city boasted at least seventeen soap factories, including Procter and Gamble (established 1837), which was destined to become the nation's dominant firm. A major change in soap making occurred in the 1840s when manufacturers began to replace lye made from wood ashes with soda ash, a lye made through a chemical process. Almost all soap makers also produced tallow candles, which for many was their major business. The firms made soap in enormous slabs, and these were sold to grocers, who sliced the product like cheese for individual consumers. There were no brands, no advertising was directed at consumers, and most soap factories remained small before the Civil War.
The period between the end of the Civil War and 1900 brought major changes to the soap industry. The market for candles diminished sharply, and soap makers discontinued that business. At the same time, competition rose. Many soap makers began to brand their products and to introduce new varieties of toilet soap made with such exotic ingredients as palm oil and coconut oil. Advertising, at first modest but constantly increasing, became the major innovation. In 1893 Procter and Gamble spent $125,000 to promote Ivory soap, and by 1905 the sales budget for that product alone exceeded $400,000. Advertising proved amazingly effective. In 1900 soap makers concentrated their advertising in newspapers but also advertised in streetcars and trains. Quick to recognize the communications revolution, the soap industry pioneered in radio advertising, particularly by developing daytime serial dramas. Procter and Gamble originated Ma Perkins, one of the earliest, most successful, and most long-lived of the genre that came to be known as soap operas, to advertise its Oxydol soap in 1933. By 1962 major soap firms spent approximately $250 million per year for advertising, of which 90 percent was television advertising. In 1966, three out of the top five television advertisers were soap makers, and Procter and Gamble was television's biggest sponsor, spending $161 million.
Advertising put large soap makers at a competitive advantage, and by the late 1920s three firms had come to dominate the industry: (1) Colgate-Palmolive-Peet, incorporated as such in 1928 in New York State, although originally founded by William Colgate in 1807; (2) Lever Brothers, an English company that developed a full line of heavily advertised soaps in the nineteenth century and in 1897 and 1899 purchased factories in Boston and Philadelphia; and (3) Procter and Gamble.
Synthetic detergent, which was not a soap, but was made through a chemical synthesis that substituted fatty alcohols for animal fats, had been developed in Germany during World War I to alleviate a tallow shortage. Detergents are superior to soap in certain industrial processes, such as the making of textile finishes. They work better in hard water, and they eliminate the soap curd responsible for "bathtub rings." In 1933 Procter and Gamble introduced a pioneer detergent, Dreft, which targeted the dishwashing market because it was too light for laundering clothes. It succeeded, especially in hard-water regions, until World War II interrupted detergent marketing.
In 1940 the "big three"—Colgate, Lever, and Procter and Gamble—controlled about 75 percent of the soap and detergent market. They produced a wide variety of products, such as shampoos, dishwashing detergents, liquid cleaners, and toilet soap, but the most important part of their business was heavy-duty laundry soap, which accounted for about two-thirds of sales. Procter and Gamble had about 34 percent of the market. Lever was a close second with 30 percent, and Colgate trailed with 11 percent. In 1946 Procter and Gamble radically shifted the balance in its favor when it introduced Tide, the first heavy-duty laundry detergent. By 1949, Tide had captured 25 percent of the laundry-detergent market. By 1956, even though Lever and Colgate had developed detergents of their own, Procter and Gamble held 57 percent of the market, as compared with 17 percent for Lever and 11 percent for Colgate. Despite Procter and Gamble's triumph, the big three still competed fiercely.
By 1972, detergents had almost eliminated soap from the laundry market, although toilet soap remained unchallenged by detergents. In the 1970s, bans on detergents by some local governments, which feared contamination of their water supplies, had little impact on the composition or sales of laundry products. In the early 2000s, the smaller firms within the industry still produced a multitude of specialized cleansers for home and industry, although in the highly important fields of toilet soaps, laundry soaps, and detergents, the big three remained dominant, controlling about 80 percent of the total market.
Claw, Spencer. "The Soap Wars: A Strategic Analysis." Fortune 67 (1963).
Lief, Alfred. "It Floats": The Story of Procter and Gamble. New York: Rinehart, 1958.
Swasy, Alecia. Soap Opera: The Inside Story of Procter and Gamble. New York: Times Books, 1993.
Wilson, Charles. The History of Unilever: A Study in Economic Growth and Social Change. 3 vols. New York: Praeger, 1968. The original edition was published in 2 vols., London: Cassell, 1954.