The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Cleaning, Household, Lifestyle, and International. The company offers laundry additives, including bleach products under the Clorox brand, as well as Clorox 2 stain fighters and color boosters; home care products primarily under the Clorox, Formula 409, Liquid-Plumr, Pine-Sol, S.O.S, and Tilex brands; naturally derived products under the Green Works brand; and professional cleaning and disinfecting products under the Clorox, Dispatch, Aplicare, HealthLink, and Clorox Healthcare brands. It also provides charcoal products under the Kingsford and Match Light brands; bags, wraps, and containers under the Glad brand; cat litter products under the Fresh Step, Scoop Away, and Ever Clean brands; and digestive health products under the RenewLife brand. In addition, the company offers dressings and sauces primarily under the Hidden Valley, KC Masterpiece, Kingsford, and Soy Vay brands; water-filtration systems and filters under the Brita brand; and natural personal care products under the Burt's Bees brand. Further, it markets its products under the PinoLuz, Ayudin, Limpido, Clorinda, Poett, Mistolin, Lestoil, Bon Bril, Agua Jane, and Chux brands. The company sells its products primarily through mass retail and grocery outlets, warehouse clubs, dollars stores, e-commerce channels, military stores and other retail outlets, and medical supply distributors. The Clorox Company was founded in 1913 and is headquartered in Oakland, California.
Business Analysis of Clorox
The Consumer Goods Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Clorox compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Clorox to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Clorox with an interactive chart.
- Revenue Growth: Clorox reported a revenue growth of 1.9% year-on-year during 2016. Personal Goods Industry grew at -0.4% in the same period
- COGS share of Revenues: As a percentage of revenue, Clorox spent 54.9% of its total revenues on COGS. Personal Goods industry average (COGS share of revenue) in the same period was 50.6%
- R&D share of Revenues: As a percentage of revenue, Clorox spent 2.4% of its total revenues on R&D. Personal Goods industry average R&D spending in the same period was 0.2%
- SG&A share of Revenues: As a percentage of revenue, Clorox spent 24.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Personal Goods industry average SG&A spending in the same period was 33.7%
- Inventory share of Revenues: As a percentage of revenue, Clorox spent 7.7% of its total revenues on Inventories. Personal Goods industry average Inventory spending in the same period was 12.9%
- Accounts Payable share of Revenues: As a percentage of revenue, Clorox invested 18.0% of its total revenues on Accounts Payable (A/P) Personal Goods industry average Accounts Payable investment in the same period was 10.2%
- Accounts Receivable share of Revenues: As a percentage of revenue, Clorox invested 9.9% of its total revenues on Accounts Receivable (A/R). Personal Goods industry average Accounts Receivable investment in the same period was 9.5%
- PP&E share of Revenues: As a percentage of revenue, Clorox invested 15.7% of its total revenues on Property, Plants, and Equipments (PP&E). Personal Goods industry average PPE investment in the same period was 19.5%
- Intangibles share of Revenues: As a percentage of revenue, Clorox invested 33.5% of its total revenues on Intangibles. Personal Goods industry average Intangibles investment in the same period was 45.5%
- Net Margins: Clorox Net Margins in the year 2016 were 11.2%. Personal Goods industry average Net Margins in the same period were 10.5%
Sector and Industry Association of Clorox
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Clorox is associated with Consumer Goods Sector and Personal Goods Industry.
Consumer Goods sector is comprised of the following industries: Beverages; Personal Goods; Food Products; Diversified Food; Household Goods & Home Construction; Food Distribution; Tobacco; Toys and Games. The definitions for each of the industries is as follows:
- Beverages industry consists of: Brewing Companies - manufacturers of cider or malt products such as beer, ale and stout; Distillers and Vintners Companies - blenders and shippers of wine and spirits such as whisky, brandy, rum, gin or liqueurs; and Soft Drinks Companies - manufacturers, bottlers and distributors of nonalcoholic beverages, such as soda, fruit juices, tea, coffee and bottled water.
- Personal Goods industry includes: Clothing & Accessories Companies - manufacturers and distributors of all types of clothing, jewellery, watches or textiles, sportswear, sunglasses, eyeglass frames, leather clothing and goods, and processors of hides and skins; Footwear Companies - manufacturers and distributors of shoes, boots, sandals, sneakers and other types of footwear; and Consumer Packaged Goods Companies - makers and distributors of cosmetics, toiletries and personal-care and hygiene products, including deodorants, soaps, toothpaste, perfumes, diapers, shampoos, razors and feminine hygiene products.
- Food Products industry includes: Farming & Fishing companies - companies that grow crops or raise livestock, operate sherries or own non-tobacco plantation; Food Products Companies - food producers, including meatpacking, snacks, fruits, vegetables, dairy products and frozen seafood. It also includes producers of pet food and manufacturers of dietary supplements, vitamins and related items.
- Diversified Food industry includes companies that offer a diverse portfolio of food products across agricultural, animal and dairy product categories.
- Household Goods & Home Construction industry includes companies that offer: Durable Household Products - Manufacturers and distributors of domestic appliances, lighting, hand tools and power tools, hardware, cutlery, tableware, garden equipment, luggage, towels and linens; Nondurable Household Products - Producers and distributors of pens, paper goods, batteries, light bulbs, tissues, toilet paper and cleaning products such as soaps and polishes; Furnishings - Manufacturers and distributors of furniture, including chairs, tables, desks, carpeting, wallpaper and office furniture; Home Construction - constructors of residential homes, including manufacturers of mobile and prefabricated homes intended for use in one place.
- Food Distribution industry includes companies that distribute food, beverage and consumer goods to restaurants, healthcare, educational facilities, lodging establishments; equipment and supplies for the foodservice and hospitality industries.
- Tobacco industry includes Manufacturers and distributors of cigarettes, cigars and other tobacco products. It also includes tobacco plantations.
- Toys and Games industry consists of manufacturers and distributors of toys and video/computer games, including such toys and games as playing cards, board games, stuffed animals and dolls.
Industry Ranking of Clorox
With $5.8 billion revenues, Clorox ranked number 12 of all the companies in the US Personal Goods industry. There were a total of 52 public companies in the US Personal Goods industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Personal Goods industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.