Treasure From the Archive
, last edited January 26, 2011 , tagged International Expansion, Mergers, Acquisitions and Divestitures
Burgeoning Abroad - Believe it or not, it was not until the acquisition of Country Kitchen Foods, LTD (CKF) in September 1973 that The Clorox Company secured a presence overseas.
Believe it or not, it was not until the acquisition of Country Kitchen Foods, LTD (CKF) in September 1973 that The Clorox Company secured a presence overseas. CKF was the largest grower of mushrooms in the United Kingdom and had farms throughout the country in Buxton, Market Harborough, Ipswich and Eye, and Avon. With the company’s acquisition of Pennsylvania-based Grocery Store Products Company in 1971, which manufactured B in B Mushrooms and Mr. Mushroom, Clorox found a strategic alignment with CKF’s core business. Unfortunately, losses were incurred with this acquisition and in 1979, CKF was sold to H.J. Heinz Co. LTD. This acquisition successfully set the company down a path of international expansion. Learn more about where Clorox operates around the world today.
Comment
Close, but not entirely true on two counts. Depending on how you define "presence overseas", Clorox's first venture outside the U. S. was a partnership in Saudi Arabi to make Clorox Liquid Bleach, and it was formed in 1970. It is still going strong today.
And while Country Kitchen was the first major wholly-owned operation outside the U. S. it probably stretches the truth a bit to say that it "successfully set the company down a path of international expansion." The unfortunate reality is that it was a fresh mushroom business (from farms to local distribution) that was a fairly poor strategic fit with our competencies, and we were in the red every year. After a number of years of poor performance, CEO Bob Shetterly sent a senior leader from Oakland to try to figure out what to do. He choose a sales leader who had signficant potential - a fellow named Calvin Hatch. Cal eventually sold the operations at a loss, but more importantly, his alarming experience there caused him to personally lose confidence in our ability to operate outside the U. S.
That became quite significant when Cal later became CEO. As a result of his CKF experience and the fact that the international operations handed Cal a fairly large earnings surprise in his first year as CEO, Cal stopped all work on international expansion and significantly reduced our presence outside the U. S. This actually resulted in earnings gains in that period, as most international operations were in investment mode and were not making money. It was not until 1991 that Pete Louras reinvigoated the interest in international.
So curiously, CKF was the first wholly owned operation outside the U. S., but it's poor performance was actually a major factor in Clorox losing momentum in international in the 1980's.
Wow. Very interesting! Thanks for the history lesson, Dan!