Combe Inc. Business Information, Profile, and History

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History of Combe Inc.

Combe Inc. is a White Plains, New York-based family-owned-and-operated company that markets several lines of niche personal care products. Despite being a small company, Combe is able to survive against much larger competition because of its specialist approach, able to focus more resources on products that the likes of Procter & Gamble and Johnson & Johnson, oriented to the marketing of blockbusters, are unwilling to commit. Combe is little known, primarily because it would rather promote its brands than its corporate name. Most of Combe's brands are, in fact, household words. Men's Grooming products include well-known brands Grecian Formula, Just For Men, Brylcreem, Aqua Velva, and Lectric Shave. In the skincare category, Combe markets the Lanacane brand. The Cepacol brand is the core of the sore throat/oral care category. Vagisil is the main brand of the feminine care business. In the footcare category, Combe relies on Odor-Eaters and Johnson's Foot Soap. Sea-Bond adhesive makes up the denture care category. For more than half a century, Combe has been adept at identifying unmet consumer needs, developing a product to meet these needs, then convincing consumers to take action. All told, Combe products are sold in 64 countries on six continents. The company maintains manufacturing facilities in Illinois and Puerto Rico.

Sales Background in the 1930s

The man behind the Combe name was Ivan DeBlois Combe, regarded as the father of the self-medication industry. He was born in Fremont, Iowa, in 1911, the son of a doctor and his wife. After his father died when Combe was three years old, he was raised by his mother, a schoolteacher, in Greenville, Illinois. He was a good student as well as an athlete, becoming a high school tennis champion before playing college tennis at Northwestern University. After earning an undergraduate degree in 1933, he remained at Northwestern for two more years attending law school. He then took a job at Chicago-based National Dairy Products selling Hydrox Ice Cream before moving to New York City to become a division sales manager for Wilbert Products Co., makers of shoe polish. In 1940, he went to work for Raymond Rubicam, cofounder of Young & Rubicam Advertising Agency, where he served as a merchandising account executive. Three years later, he was named vice-president of sales and advertising at Pharmacraft Corporation, at the time a major pharmaceutical company specializing in over-the-counter drugs.

While at Pharmacraft, Combe was dispatched in 1949 to Philadelphia to investigate the 70 brands of the Dill Company to see if there were any products worth acquiring. Only one brand stood out, a laxative named Espotabs, which he greatly liked and wanted to promote. When Pharmacraft's chairman and CEO Chuck Howell passed on the opportunity, believing that the sales potential for Espotabs was too limited, the 38-year-old Combe decided to strike out on his own and buy the rights to Espotabs and promote it himself. Combe was supported in his venture by Howell, who not only encouraged him but became his first investor and lined up two other backers. Combe set up his offices at 110 East 42nd Street in Manhattan, initially adopting the Eastco Chemical name (combining East, the company's location, with "Co" for Combe).

Clearasil Soars in the 1950s

Although Combe did fairly well marketing Espotabs, he needed another product to grow the business. He turned to contacts he made at Pharmacraft and investigated the teen market. After interviewing hundreds of young people and pharmacists, he concluded there was a market for an effective acne product. A number of acne medications had come onto the market but none performed especially well. Combe collaborated with chemist Kedzie Teller to produce a flesh-colored cream that could dry up pimples. When they were satisfied with the formula, Combe launched the product in 1951, calling it Clearasil, a name that played to the teenage desire for clear skin. However, having been disappointed in the past on acne products, retailers were reluctant to stock Clearasil. To get the product on the shelves, Combe had to offer free tubes to owners, who promised to order the product if it sold. It did, the stores placed orders, and teens began touting Clearsil's effectiveness to each other. Sales grew steadily over the next several years, and the product was well established enough that in 1957 it was the second product, after Cheerios, to become a sponsor of ABC's popular teenage dance program American Bandstand, hosted by Dick Clark. As a charter advertiser of American Bandstand, the product had its commercials delivered by the popular Clark, sales soared, and Clearsil became a household word.

In the meantime, Combe, who had been living in Scarsdale several miles north of Manhattan, grew weary of his commute and saw no real reason to be located in the city. In 1952, he moved his offices to 100 Mamaroneck Avenue in White Plains, New York, sharing a second floor location with a beauty parlor. Eastco soon outgrew this location too, and in 1956 moved to a larger office in White Plains, where Combe operated for the next 16 years.

Even as Combe was growing Clearasil and continuing to promote Espotabs, he remained on the lookout for new products. Acting on a tip from a friend, he acquired a pair of pet products from an Illinois veterinarian, Dr. Andrew Merrick. These products were Dr. Merrick's Scratch Powder, which he renamed Scratchex Powder, and Sulfodene Skin Medication, used to treat hot spots on dogs. While Sulfodene sold well from the start, decades would pass before Scratchex began to see strong growth.

Ivan Combe reached a turning point with Clearasil in 1960. He wanted to take advantage of the product's popularity to market it internationally but lacked the necessary experience and resources. Fortunately, Clearasil did not lack for larger company suitors, led by Colgate-Palmolive, Bristol-Myers, and Vick Chemical. He decided to sell the product to Vick Chemical, which wanted to hire him as a consultant for two years while launching the product overseas. In this way, Combe, who believed in learning with someone else's money, gained valuable international experience as well as the capital he needed to acquire a new product. He wisely took Vick's cash rather than the stock they offered for Clearasil, since a short time later the price of Vick's stock tumbled.

After his consultancy with Vick, Combe started up again as Combe Chemical Company. His next major product actually came looking for him, a hair dye called Grecian Formula 16. The man who discovered it was Colonel Julius Amos, an agent for the predecessor to the CIA who operated in Greece during World War II. Suffering from a dandruff problem, he visited a Greek barber who sold him a clear liquid to apply daily to his scalp. About two weeks later, Amos realized that not only had his dandruff been cured, his hair had turned from gray to its original brown. Amos lined up American partners to form a company called World Wide Rights, which then acquired the product from the Greek barber. Grecian Formula 16, as it was called, struggled to find adequate distribution as a women's product, prompting World Wide Rights to find someone who could do a better job of marketing it. The search led to the door of Ivan Combe, who recognized the potential of Grecian Formula 16. Rather than buy the product, however, he entered into a licensing deal in 1961. By focusing his marketing efforts on male customers, who appreciated the gradual reintroduction of coloring to their hair, Combe was able to grow Grecian Formula 16 to a successful product and one that was years ahead of the market.

Another product Combe picked up in the early 1960s was Lanacane, a West Coast over-the-counter medication used to relieve itching that he discovered in his ceaseless store checks. A third product Combe added to his stable in the 1960s, Johnson's Foot Soap, was a testament to his patience and persistence. Dating as far back as his time at Pharmcraft, Combe had made periodic attempts to acquire the product. Despite being rebuffed, every year Combe wrote to the manufacturer expressing his interest. Finally, when the owner of the company died, the product was auctioned off, Combe was invited to participate, and his cash offer plus royalties won the day.

In 1971, Combe hired a head of a research and development unit, recruiting a man named Dr. Herbert Lapidus, who would play a major role in the creation of new products over the next 30 years. According to the New York Times, Lapidus had been employed at Bristol-Myers, where he worked on "everything from furniture polish to nasal spray." He even developed a whipped-cream based medicine called CoughWhip, a product that would never see the drugstore shelves despite its intriguing concept. He would quickly make his mark at Combe by becoming involved in the development of two major products: Odor Eaters Insoles and Vagisil Creme.

It was actually Combe's wife Elizabeth who provided the inspiration for Odor Eaters. While in England, she came across a product called "Fresh Sox," a paper insole that relied on activated charcoal, a substance that had been used to good effect in freshening the air in cramped quarters like submarines and space capsules. Lapidus loved the concept but realized that paper was not a good choice of material because perspiration caused it to deteriorate too quickly and left charcoal stains on socks and shoes. After some trial and error, Lapidus found a way to combine coconut charcoal with a breathable latex foam. Someone else at Combe contributed the idea of printing a shoe size template on the underside of the insoles, allowing Combe to produce just one size that could be cut for a custom fit. Introduced in 1974, Odor-Eaters was sold under the Johnson's banner and became another Combe product that achieved household name status.

Manufacturing Added in 1970s

Another product Combe launched in 1974 was Vagisil. This application grew out of the success of Lanacane, which was mostly used to treat dry skin and external vaginal itching. Vagisil was developed as a specialty feminine itching product. The company debated the merits of an alternative name, Gynasil, which sounded less evocative, but in the end Ivan Combe signed off on Vagisil because it was more striking and descriptive. For nine years, Combe was unable to advertise Vagisil on television because of its name, and promotion of the product was relegated to print ads that appeared primarily in women's magazines. Nevertheless, the product developed a market and enjoyed even greater growth after the television ban was lifted. In June 1974, Combe opened its first manufacturing plant, located in Rantoul, Illinois. Later in the 1970s, Combe searched for a second plant location and decided on Puerto Rico, which offered a 100 percent tax exemption. To take advantage of this offer, Combe quickly opened a 23,000-square-foot facility in March 1980, to which another 40,000 square feet was added over the years. It was also during the 1970s that Combe made a major push to market its products outside of the United States, an effort headed by Combe's son, Chris, who joined the company in 1975 to head the new International Division. A Northwestern graduate like his father, Chris also earned an MBA at Columbia University and worked in sales and marketing for five years at American Hospital Supply Corporation before joining the family business. Over the next few years, sales offices were opened in such countries as the United Kingdom, Spain, Italy, Germany, Brazil, Japan, and Australia.

In 1978, Combe came under fire because of the active ingredient in Grecian Formula 16, lead acetate. Because of concerns about possible health risks, the FDA was on the verge of banning lead acetate when Combe was able to provide scientific evidence that only traces of lead acetate, less than one-third of one millionth of a gram, was absorbed into the skin. Lead acetate was eventually place on the Food and Drug Administration (FDA) approved list of substances, but the experience led Lapidus to begin developing a gradual hair coloring agent that did not rely on lead acetate. The result was a dye based on peroxide, and although the product, named Gray Fighter, took only five minutes to apply, it was far too complicated for consumers and was never introduced into the market. Lapidus switched gears and transformed the hair dye into a five-minute, single application product. This new product was named Just for Men, and it quickly staked out a strong position in the marketplace. Although it took away some sales from Grecian Formula 16, Just for Men helped to open up a much larger market. As self-conscious baby boomers began to gray, an increasing number opted to color their hair, a trend that competitors attempted to exploit as well, but 20 years of experience in marketing Grecian Formula 16 gave Combe a distinct advantage and it was able to carve out a dominant share of the market. Combe strengthened its hold on the category in 1993 with the addition of a gel to color beards and mustaches. In 1997, it introduced a five-minute permanent hair color for women called Just 5, and in 1999 took advantage of the Grecian Formula 16 brand by bringing out Grecian 5, another five-minute permanent hair-coloring product.

The 1980s and Beyond

During the 1980s and 1990s, Combe extended other brand lines and reworked some products to expand its portfolio. An example of the latter was the Sea Bond denture adhesive, which had been introduced in 1978 but proved a disappointment. Lapidus and his team then essentially reinvented the product, adding greater holding power while increasing comfort. During the 1980s, the product was reintroduced to the marketplace, but rather than rely on television commercials, which could not adequately explain Sea Bond's unique approach, the company gave out free samples through direct mail and senior center giveaways and grew the business brick by brick. Line extensions during this period included Odor-Eaters, which added insoles for work shoes, sneakers, and winter wear. Odor-Eaters for Women was introduced in 1988, followed a year later by Odor-Eaters Foot Powder. Combe even licensed the Odor-Eaters name to a line of socks. In response to the success of Cortaid, a hydrocortisone product, Combe's Lanacane product experienced eroding sales, leading to the development of the company's own hydrocortisone product called Lanacort. A Lanacane Spray was then introduced in 1976 as a first aid spray, repositioned in 1983 as a sunburn pain remedy, then recast again in the 1990s as an anti-itch first aid spray. Also growing out of Combe's research of hydrocortisone was Scalpicin, a scalp itching and flaking product that was introduced in 1991. Combe also built on its pet care product lines during the 1980s and 1990s, launching Scratchex Spray, a Scratchex shampoo, Scratchex Dip, Scratchex Powder, Scratchex Power Guard Repellent, and Scratchex Pump Spray, as well as the first extended life flea color for dogs sold under the Scratchex name. Johnson's Foot Soap added a foot pain product called Podiacin, and Vagisil introduced the first feminine powder while adding a stronger version of the original cream product.

An era came to an end in January 2000, when 88-year-old Ivan Combe died of a stroke at his Greenwich, Connecticut, home. He remained chairman and CEO of the company he founded until the end. His son Chris succeeded him and the company carried on as an exploiter of consumer niche products, still committed to being a privately owned, close-knit company. Combe also continued to grow through acquisitions as well as home-grown products. In 2002, the company acquired J.B. Williams, a deal that brought such well known brands as Aqua Velva, Brylcreem, and Cepacol mouthwash. Combe's manufacturing plants had to invest in new equipment to bring the production of three dozen new items in house, and the marketing people had to learn the intricacies of the mouthwash, fragrance, and cough and cold remedy markets. However, after more than half a century of operating in a number of consumer markets, there was every reason to expect Combe to enjoy continued success with its new product lines.

Principal Competitors: L'Oreal SA; Pfizer Inc; The Procter & Gamble Company.

Chronology

• Key Dates:
• 1949: Ivan Combe founds a company.
• 1951: Combe introduces Clearasil.
• 1952: The company's offices move from Manhattan to White Plains, New York.
• 1960: Clearasil is sold to Vick Chemical.
• 1974: Combe's first manufacturing plant opens in Illinois.
• 1987: Just For Men is introduced.
• 2000: Ivan Combe dies.
• 2004: J.B. Williams is acquired.