The Origins of P&G: From Candles to Billion-Dollar Brands
Procter & Gamble started in 1837 selling candles and soap in Cincinnati. Today it owns Tide, Pampers, Gillette, Oral-B, and dozens more. Here is the full story of how it became the world's largest consumer goods company.
Two brothers-in-law pooled $3,596.47 in Cincinnati in 1837. One made candles. The other made soap. Their father-in-law suggested the partnership because both men used the same raw material: animal fat.
That $3,596.47 investment became Procter & Gamble, today the world's largest consumer goods company by revenue. For fiscal year 2025 (ended June 30, 2025), P&G reported approximately $84 billion in net sales across Tide, Pampers, Gillette, Oral-B, Crest, Pantene, Head and Shoulders, Olay, SK-II, Febreze, Swiffer, Bounty, and Charmin, among others. It employs approximately 107,000 people and sells products in approximately 180 countries.
This post covers the full history: from 19th-century Cincinnati through the invention of modern brand management, the $57 billion Gillette acquisition, the dramatic portfolio reset of 2014, and where P&G stands today.
The Early Years: Soap, Candles, and Civil War Contracts
The Procter & Gamble partnership was formalized on October 31, 1837. The company manufactured candles and soap near the Ohio River in Cincinnati, then a major pork processing center. That proximity mattered commercially: the primary raw material for both candles and soap was animal fat.
Cincinnati's position on the Ohio River gave P&G access to markets across the Ohio Valley and Mississippi River system. By the late 1840s, the company was generating significant revenue from merchants along those routes.
The American Civil War (1861-1865) was the first major scaling event. P&G secured a government contract to supply Union Army troops with soap and candles. Military volumes forced a substantial expansion of production capacity. When the war ended, P&G had factories far larger than civilian demand required, which pushed the company to invest aggressively in consumer marketing to fill them.
Ivory Soap and the Birth of National Advertising
In 1879, P&G chemist James Norris Gamble (son of the co-founder) developed a new white floating soap. P&G named it Ivory and positioned it with one of the most iconic advertising slogans in American history: "99 and 44/100% pure." The floating characteristic was actually an accidental result of over-mixing during production, which incorporated air into the soap. P&G turned the accident into a product feature.
Ivory's national launch, backed by substantial advertising in Harper's Weekly and The Independent, was among the earliest examples of mass-market advertising for a consumer packaged good. The result convinced P&G's leadership that brand building through consistent advertising outperformed competing on price or distribution alone.
By 1890, P&G was producing over 30 different soap products and had annual sales exceeding $3 million. In 1890, the company incorporated as Procter & Gamble Company with a capital stock of $4.5 million.
Crisco, Radio, and the Invention of Brand Management
In 1911, P&G launched Crisco, a vegetable shortening made from cottonseed oil. Crisco was the first solidified vegetable shortening in America and was marketed as a healthier alternative to lard. The Crisco launch demonstrated P&G's capacity for product innovation beyond its soap core and introduced the company to the food category.
The 1930s produced two developments that shaped P&G's strategy for decades.
First: radio. P&G sponsored daytime serials that became known as soap operas because of the soap company sponsors. By 1939, P&G was producing its own radio programs, building internal capability in content and advertising.
Second: brand management. In 1931, P&G executive Neil McElroy wrote a memo proposing that each brand should have a dedicated manager responsible for advertising, pricing, distribution, and profitability, and that brands within the same company should compete against each other for resources as well as against external competitors. McElroy's memo became the founding document of modern brand management. Consumer goods companies worldwide adopted the model. McElroy later served as U.S. Secretary of Defense.
The Post-War Expansion: Tide and Television
Tide launched in 1946 as a synthetic detergent, distinct from soap-based laundry products and substantially more effective at removing grease and dirt. Within a year it was the best-selling laundry product in the United States. Tide has held market leadership for nearly 80 consecutive years, making it P&G's most commercially important product innovation of the 20th century.
The 1950s and 1960s brought further major launches: Crest fluoride toothpaste (1955), which received American Dental Association endorsement and took market leadership from Colgate; Pampers disposable diapers (1961); and Head and Shoulders anti-dandruff shampoo (1961).
P&G's television advertising investment in this period was enormous. By the mid-1960s, the company was the largest advertiser on American television.
The Acquisition Strategy: Building the Modern Portfolio
P&G's 20th-century acquisition strategy was selective but consequential:
Norwich Eaton Pharmaceuticals (1982): Added Pepto-Bismol, the antacid medication, to the portfolio.
Richardson-Vicks (1985): Acquired for approximately $1.24 billion, adding Vicks NyQuil, DayQuil, Vicks VapoRub, and Oil of Olay (later Olay) to the portfolio. The Richardson-Vicks acquisition gave P&G its first major over-the-counter healthcare brands and the Olay skin care line.
Noxell (1989): Added Cover Girl cosmetics and Noxzema skincare for approximately $1.3 billion.
Max Factor and Betrix (1991): P&G acquired the Max Factor cosmetics brand from Revlon and Betrix from Hoechst, expanding its prestige cosmetics position.
Iams (1999): Acquired for approximately $2.3 billion, giving P&G the Iams and Eukanuba premium pet food brands. These were later sold to Mars in 2014 as part of P&G's portfolio reset.
Gillette (2005): P&G's largest acquisition. P&G paid approximately $57 billion for Gillette, adding the world's leading shaving brand, Braun electric shavers, Oral-B toothbrushes, Duracell batteries, and the Gillette personal care line. The deal made P&G the world's largest consumer goods company by revenue.
The 2014 Portfolio Reset: From 170 Brands to 65
For most of its history, P&G accumulated brands. In 2014, then-CEO A.G. Lafley reversed that logic.
Lafley announced a plan to sell, discontinue, or consolidate approximately 100 brands, reducing the portfolio from roughly 170 to approximately 65. The rationale: management attention, capital, and sales force capacity were spread too thinly across brands in categories where P&G lacked genuine competitive advantage.
- The Pringles snack brand, sold to Kellogg's for approximately $2.7 billion in 2012 (pre-dating but related to the broader reset).
- The Duracell battery brand, transferred to Berkshire Hathaway in exchange for Berkshire's P&G shareholding, valued at approximately $4.7 billion in 2016.
- The beauty brands Wella, Clairol, CoverGirl, and Max Factor, sold to Coty Inc. for approximately $12.5 billion in 2016.
- The Iams and Eukanuba pet food brands, sold to Mars for approximately $2.9 billion in 2014.
- Approximately 43 additional small to medium-scale brands across various categories.
The reset focused the portfolio on ten product categories: Fabric Care, Home Care, Baby/Feminine/Family Care, Hair Care, Skin and Personal Care, Grooming, Oral Care, Personal Health Care, and Beauty. Each retained brand generates at minimum $500 million in annual sales. Many generate over $1 billion.
P&G Today: The Current Portfolio
P&G's retained portfolio as of 2026 spans its ten core categories:
- Fabric Care: Tide, Ariel, Gain, Downy, Lenor, Bounce
- Home Care: Febreze, Swiffer, Mr. Clean, Flash, Fairy, Dawn
- Baby/Feminine/Family Care: Pampers, Always, Tampax, Bounty, Charmin, Puffs
- Hair Care: Pantene, Head and Shoulders, Herbal Essences, Aussie, Vidal Sassoon
- Skin and Personal Care: Olay, Old Spice, Secret, Safeguard, Ivory
- Grooming: Gillette, Braun, Venus
- Oral Care: Oral-B, Crest
- Personal Health Care: Vicks, Pepto-Bismol, Metamucil, Align, ZzzQuil
- Prestige Beauty: SK-II (ultra-premium skincare, primarily Asia-Pacific)
P&G's Financial Profile
Key metrics for fiscal year 2025:
- Net sales: approximately $84 billion
- Net earnings: approximately $14.8 billion
- Gross margin: approximately 51%
- Dividend: P&G has paid a dividend every year since 1890 and has raised it for 69 consecutive years as of 2026, qualifying it as a Dividend King
P&G trades on the NYSE under ticker PG and has been a component of the Dow Jones Industrial Average since 1932.
Explore Related Content
- Procter & Gamble - Full company profile and brand index
- Gillette - P&G's flagship grooming brand, acquired 2005
- Tide - P&G's most commercially important product
- Pampers - P&G's baby care flagship
- How Nestlé Went From Baby Milk to Global Empire - Related brand history post
- How Unilever Was Formed: The Anglo-Dutch Merger - Primary P&G competitor history
Browse all Household Consumer Goods brands
Sources
1. Procter & Gamble Annual Report FY2025 - https://pginvestor.com 2. NYSE: PG Company Profile - https://www.nyse.com 3. P&G History - https://us.pg.com/who-we-are/our-history 4. Neil McElroy Brand Management Memo (1931) - Harvard Business School archives 5. Wikidata: Procter & Gamble - https://www.wikidata.org/wiki/Q160746 6. SEC EDGAR: P&G 10-K Annual Report - https://www.sec.gov/cgi-bin/browse-edgar
All brand ownership data verified through WhoBrands.com research. Last verified: March 2026.
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