Church & Dwight is a leading consumer packaged goods (CPG) company with a focus on personal care and household goods. Founded in 1846, the company is best known for its baking soda brand, Arm & Hammer. Church & Dwight commands over 75% market share in this category and the brand generates over $1B in revenue per year including adjacent categories such as laundry detergent, kitty litter and oral care products. The company has leveraged the strength and cash flows of the Arm & Hammer brand to acquire 14 other power brands since 2001.
Great article on CHD! I looked at the stock after Fundsmith bought it. You raised several good points, including the one on the low private market share in its markets which I never thought about it. While the company's power brands have strong branding and market positions, one negative is its smaller scale relative to other larger CPG players and the larger retailers. Do you think that it is a major concern, given lower economies of scale in terms of bargaining power, marketing spending and overheads? Thanks.
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enjoy reading your piece on CHD. You raised some very good points. The most important for me is that recent acquisitions have been made at increasingly higher Sales multiples. Probably this will reduce the ROIC on these acquired businesses. Second point is that CHD does not have a lot of pricing power, which is a key component of "a good business". What do you think? and thanks for the write up Stef