Faultless Starch/Bon Ami Company - Company Profile, Information, Business Description, History, Background Information on Faultless Starch/Bon Ami Company

1025 West 8th Street
Kansas City, Missouri 64101

Company Perspectives:

The Faultless Starch/Bon Ami Company is a privately owned business whose principal enterprise is manufacturing and marketing laundry and household cleaning products to consumer and commercial markets. In addition to this, it also markets unique lines of garden tools, material handling products, and gift products.

History of Faultless Starch/Bon Ami Company

Faultless Starch/Bon Ami Company is a manufacturer of consumer and commercial cleaners and laundry products. Its two major brands are Faultless Starch, a line of starch and sizing products sold across the United States and in 30 countries worldwide, and Bon Ami cleansers. Faultless Starch claims about one-third of U.S. market share and 10 percent of the worldwide market in laundry starches. Bon Ami is the third most popular brand of powdered cleansers in the United States, where it holds a 5 percent market share. Bon Ami is known as an environmentally friendly product, and it is the preferred household cleanser for people with chemical sensitivity. The company also makes a line of Kleen King metal cleaners and the Magic brand line of laundry starches and sizing. Faultless Starch/Bon Ami also distributes a line of garden tools, including the Garden Weasel tiller, and a line of scented candles and room sprays. The company operates manufacturing plants and a distribution center in Kansas City, Missouri, and one factory in nearby Humansville, Missouri. Tracing its roots back to the late 19th century, it has been continuously operated by members of the founding Beaham family since that time.

Origins of Faultless Starch

The Faultless Starch Company was a family-owned business in Kansas City since the late 19th century. It began when Major Thomas G. Beaham moved to Kansas City from Zanesville, Ohio, in 1886. Once there, he bought a part ownership in a tea, coffee, and spice company called Smith & Moffit. This company became Beaham & Moffit the next year. Sometime after that, Beaham & Moffit bought up the formula for a dry laundry starch called Faultless Starch from the Bosworth Manufacturing Company. In 1891, Beaham & Moffit changed its name to reflect its leading product and thus became the Faultless Starch Company. Faultless Starch won wide popularity in the Midwest. It not only saved women the labor of making their own laundry starch but was also used as baby powder and bath powder. Traveling salesmen brought Faultless Starch into the West and Southwest. One Texas salesman added a premium to his starch boxes, bundling them with reading primers. This became a widespread practice, and the series of 36 Faultless Starch primers were used as school texts throughout the West. The company distributed the primers until the 1930s, and many Americans learned to read using the free Faultless Starch booklets.

The company incorporated in 1902, and in 1903 built a new factory in Kansas City after an earlier facility was destroyed by flood. Faultless Starch made nothing but dry laundry starch for the next 50 years. It remained in the hands of the Beaham family, and it operated out of its 1903 plant until 1968. The company advertised widely, especially on the radio in the 1940s. Its commercial jingle became so popular that marching bands played it during halftime at football games. Then, in 1960, the company brought out a new product that proved wildly successful, at least for a time. This was an aerosol starch. Faultless worked with a company called Arthur D. Little, Inc. to develop a laundry starch that could be sprayed from an aerosol can. The resulting product was very easy to use. Faultless Spray-On Starch debuted in 1960 and had the same sort of impact as the company's first packaged starch. Consumers flocked to it because it was so much easier to use than the powder version. In 1964, the company brought out Faultless Fabric Finish, followed in 1965 by Faultless Hot Iron Cleaner. In 1968, it came out with another new product, Faultless Spray Pre-Wash. That year, the company branched into a new market with its purchase of the Kleen King Company, a maker of metal cleaning products.

Aerosol starch made a big impression on the U.S. market. Sales grew quickly, and for several years during the 1960s aerosol starch was one of the leading growth categories in U.S. supermarkets. It was also popular abroad. In the mid-1960s, Faultless licensed a West German company to make the spray starch in that country. With the advent of wash-and-wear fabrics after 1970, however, Faultless sales began to fall off as consumers flocked to polyester, acrylic, and poly-cotton blends, all billed as easy-care, wrinkle-free fabrics. In 1968, Faultless had realized that it was too dependent on its core product, and it had branched into cleaners with the Kleen King line. In 1971, the company made another attempt to diversify and picked up the Bon Ami Company. Bon Ami was a cleanser that at one point held a 70 percent market share in the United States, a venerable brand even older than Faultless Starch. However, after its founding family gave up control of the company, it had been through several unscrupulous owners, and the brand had dropped out of sight.

Origins of Bon Ami

Bon Ami soap was first made in 1886, the same year Major Beaham showed up in Kansas City. It was initially manufactured by the J.T. Robertson Soap Company of Manchester, Connecticut. Robertson's company was attempting to duplicate a very popular brand name soap of the 1880s, Sapolio, which was made from tallow and finely ground quartz. The quartz mined in the Northeast was always found with feldspar, a softer mineral. To separate out the quartz, workers pounded it with heavy hammers called cobbing hammers. The soft feldspar was left behind and considered a waste product, but Robertson thought a soap could be made using the leftover feldspar. He interested a neighbor, Gurdon Hicks Childs, who had a grist mill that could be used to grind the feldspar. The two brought out Bon Ami brand household soap in 1886 under the aegis of the Robertson Soap Co. In 1892, the son and nephew of Gurdon Hicks Childs formed their own company, Childs & Childs, and purchased the exclusive rights to Bon Ami soap. By 1896, the brand was ubiquitous in the Northeast. The company changed its name to Bon Ami Co. in 1897. It continued to be run by members of the Childs family. Bon Ami used a logo of a yellow chick, with the slogan "Hasn't Scratched Yet!" (This referred to the fact, known to people familiar with chickens, that newborn chicks do not scratch the ground for food for two or three days. Unlike harsher cleansers, Bon Ami, being mild, did not scratch surfaces such as porcelain.) Around 1900, the yellow chick was re-imagined by artist Ben Austrian, a famous painter of the era, whose entire career was based on paintings of chickens and other birds. Bon Ami's logo and slogan became one of the most enduring examples of American advertising.

The company did well. In 1915, Bon Ami Co. was listed on the New York Stock Exchange. It reorganized so it had a manufacturing subsidiary, Orford Soap Co., in 1915, and in 1922 opened a Canadian subsidiary, Canada Bon Ami Ltd. In 1930, the company formed another overseas subsidiary, Bon Ami Co. of Australia, Ltd. The Bon Ami brand enjoyed a large market share and little competition. Even throughout the Great Depression, Bon Ami Co. continued to pay its stockholders dividends, one of only 16 New York Stock Exchange companies that did so. After World War II, the company did pick up some serious rivals. Colgate brought out its Ajax cleanser in 1947, and Procter & Gamble came out with Comet in 1956. These were brands backed by major companies, and 50 years later they are the two leading powdered cleansers. Bon Ami's market share had been as high as 70 percent when Ajax and Comet were starting out.

In 1953, Eversley Childs died at the age of 87. Son of one of the founders of Bon Ami, he had worked for the company for over 60 years and eventually served as its chairman. On his death, the remaining members of the Childs family cashed out, and Bon Ami Co. was then run by a group of investors with ties to the grocery business. In 1955, Bon Ami was acquired by United Dye & Chemical Corp., a company controlled by a mysterious businessman named Alexander Guterma. Guterma claimed to have been born in Russia on the eve of the Revolution. His name at one time may have been Guterman, though he also at times used the name Sandy McSande. After drifting through China and the Philippines, he arrived in the United States in 1950 with plans to farm exotic plants that could be used for textile fibers. Through a series of quasi-legal mergers, Guterma built his Florida ramie farm into an up-and-coming conglomerate, and by 1956 he was chairman of an unprecedented three New York Stock Exchange companies. Guterma was hailed as a financial genius when he burst onto the scene in 1950; by 1958 he had been indicted for fraud. While in control of Bon Ami, Guterma had managed to wring $3 million (the company's entire cash holdings) from the company in fraudulent transactions involving the sale of television advertising rights. Then, in 1957, Guterma arranged for the sale of Bon Ami by United Dye to a convicted forger named Sortiris (Sonny) Fassoulis. Fassoulis immediately had Bon Ami spend over $1.3 million to buy some extremely limited television rights to a packet of old British films. Fassoulis, of course, owned the company that sold the film rights. Under the sway of these two con men, Bon Ami began to falter, and in 1958 the New York Stock Exchange threatened to delist its stock. Unfortunately, Fassoulis and Guterma were not the last shady characters to take a piece out of Bon Ami. In 1958, investor R. Paul Weesner gained control of the company and became its chairman. By 1962, the company was considered to have made a remarkable recovery from its previous mishandling. That year, however, the company received a hostile takeover offer from a Chicago company, Tel-A-Sign, Inc. Bon Ami's refusal of Tel-A-Sign's offer precipitated more charges of wrongdoing at the company, this time levied by Tel-A-Sign's attorney, Roy M. Cohn. (Cohn was known as one of the nation's leading anti-communists and had worked as assistant to Senator Joseph McCarthy from 1953 to 1954.) Cohn claimed that Weesner and others had misused funds and taken kickbacks, charges Weesner characterized as "unfounded" and "filthy." Nevertheless, Weesner was soon charged with taking $550,000 in corporate funds. The company's chairman had billed the company for personal items, including a custom-built cage for his pet macaw, which cost $1,581. In 1963, the company changed hands yet again, falling to Lestoil Products, Inc.

Through all these troubles, the company spent less and less on advertising. In the early 1950s, it spent about $1 million annually on advertising, mostly on television. By 1970, its entire advertising budget was just under $200,000. Comet and Ajax had steadily gained market share, while Bon Ami's dwindled. When Faultless Starch Co. bought the company in 1971 for about $1 million, market share was around 1 percent. At least two-thirds of grocery stores in the United States did not stock Bon Ami, and even its competitors thought the company had gone out of business.

A New Start in the 1970s

The president of Faultless Starch was Gordon T. Beaham III, great-grandson of the company's founder. According to an interview with the New York Times (April 19, 1972), Beaham promised to give the Bon Ami brand "the tender loving care which it hasn't had in the last 25 years." The starch market was contracting by as much as 10 to 15 percent a year, according to Beaham's estimate, and his company needed to push a second product line to balance this out. Beaham saw unique characteristics in Bon Ami that the leading cleansers did not have. Besides being backed by huge companies with impressive advertising budgets, the leading cleansers had an advantage with consumers because they contained a host of "modern" ingredients that Bon Ami lacked, namely bleaches, disinfectants, perfumes, and dyes. Beaham hoped to turn this around and make Bon Ami stand out as a simpler, safer, old-fashioned cleanser. Chlorine and phosphates had been singled out by environmentalists as harmful chemicals, and Bon Ami had never had these ingredients. Beaham also hoped that Bon Ami would fit in with consumers who were keen on health and fitness. As the least abrasive cleanser on the market, Bon Ami required more "elbow grease," and Beaham speculated that health-conscious consumers would not mind this. Beaham wrote a letter that was printed in the 1974 Whole Earth Catalog explaining that Bon Ami was environmentally safe. That year, the company also changed its name to Faultless Starch/Bon Ami Co. Beaham stressed environmentalism as a selling point for his products and as a philosophy. He later became chairman of the National Parks and Conservation Association.

By 1983, Bon Ami's market share had risen from about 1 percent the year Faultless took it over to about 5 percent. The brand was distributed in approximately 95 percent of the nation's grocery stores, up from 35 percent a decade earlier. Yet effective advertising for the brand was still difficult. Though Beaham had hoped to raise market share to around 15 percent, in 1983 he told Forbes (September 12, 1983) that maintaining the 5 percent level was "like pushing water uphill." The company spent close to $1 million on advertising for Bon Ami in 1982, mostly on magazine ads, yet Bon Ami was afraid to call too much attention to itself and thus rouse the interest of Colgate-Palmolive and Procter & Gamble, its well-heeled competitors. So it tried some more unusual marketing routes. For example, the company sponsored a tour in the early 1980s for a woman who had written a book about living with chemical sensitivities. The author, Debra Lynn Dadd, touted Bon Ami as the only cleanser people with this problem could use.

Growth in the 1980s-90s

The company's sales in the early 1980s stood at around $15 million. Laundry starch began to return to popularity in the late 1970s, when fashions changed to include more natural textiles and a more finished look. Faultless Starch/Bon Ami Co. brought out several laundry starch line extensions in the 1980s, including Lemon Starch, Lite Starch, Heavy Starch, and Wrinkle Remover. The company also found receptive markets overseas. Faultless Starch was popular in the Arab world, where men starched their white headdresses. The company also commanded a large military market, because people in uniform needed starch for maintaining crisp creases. Both the domestic and export business seemed to be thriving for Faultless Starch during the 1980s. By the mid-1990s, sales for the company were estimated at around $35 million. The company had begun exporting the Faultless line to Russia and China, and now commanded some 10 percent of the global market for laundry starch.

Faultless Starch/Bon Ami Co. also added to its product roster in the 1980s and 1990s. In the early 1980s, it began distributing a German-made adjustable garden tool called the Garden Weasel. It began making garden statues out of recycled metal at a Humansville, Missouri, factory in the mid-1990s and selling them through nurseries. In the 1990s, the company also brought out a new line of cleaners, Steel Glo. Steel Glo was meant to clean fine cookware safely and was prized by cooks for the polish it gave to stainless steel. In 1997, the company acquired a new brand of laundry starch and sizing called Magic.

The neighborhood around the company's oldest manufacturing plant was swept by fire in 1998. In addition to rebuilding its own plant, Faultless Starch/Bon Ami Co. spearheaded rebuilding efforts in the surrounding district, a rather dilapidated industrial area known as the West Bottoms. The company hoped to restore the neighborhood, which was full of historic buildings.

In 2002, Faultless Starch/Bon Ami Co. was still owned and managed by members of the founding Beaham family. The fifth generation of the family was now in place, with David Beaham as president. Both its main product lines had weathered great changes over more than one hundred years on the market. Faultless Starch adapted technologically, with the transition to spray starch, and then maintained itself even through a drastically shrinking market in the 1970s. Though Bon Ami had almost gone out of business at one point, it now holds a respectable third place in the cleanser market.

Principal Competitors: Colgate-Palmolive Company; Procter & Gamble Company; CPC International Inc.


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