The Mentholatum Company Inc. - Company Profile, Information, Business Description, History, Background Information on The Mentholatum Company Inc.

707 Sterling Drive
Orchard Park, New York 14127

Company Perspectives:

It is our goal to become a company that aims to continuously improve quality and profits. The company will strive to achieve category leadership through innovation. Mentholatum will constantly develop unique new products with recognizable points of difference. We will commit to introduce at least two or three new products every 12 months for the next 5 years. In accomplishing these goals, we will increase our shareholder value and advance the growth of the company and development of our people.

History of The Mentholatum Company Inc.

The Mentholatum Company Inc. is a world leader in the manufacture and marketing of nonprescription drugs and healthcare products. Since 1889, The Mentholatum Company has grown and prospered from a small purveyor of soaps and toiletries into an international company, marketing quality proprietary medicines around the world. Worldwide sales in 1999 reached approximately $200 million and primarily involved the following product categories: external analgesics, oral care, skin care, lip care, and laxatives. The three major brands which account for over 75 percent of the company's sales worldwide are: Mentholatum Ointment, Mentholatum Deep Heating Rub, and Mentholatum Lip Care, the number one selling lip care line in China, Hong Kong, Japan, and Taiwan, and the fastest-growing in the United States. Manufacturing is carried out in 26 locations around the globe and marketing and distribution in over 150 countries.

The company, privately held for 99 years, was acquired by Rohto Pharmaceutical Co. Ltd. of Osaka, Japan, in 1988. Rohto is a major player in the Japanese pharmaceutical market, with top-selling products in the eye care, topical, and stomach relief categories.

Pioneer Days: The Hyde Family and The Yucca Company: 1889-1935

The Mentholatum Company's roots date back to the late 1800s in Wichita, Kansas, but the story starts earlier than that. Albert Alexander Hyde was born in Lee, Massachusetts, in 1848, and moved to Leavenworth, Kansas, in 1865 with his brother, where he was employed as a bank clerk at Clark & Company Bank until 1872. In 1872, Hyde's company sent him to Wichita to open a new bank, where he remained until 1887. Hyde left the company at that time and entered the booming real estate market. Following the collapse of that market in 1889, and despite being $100,000 in debt during a severe economic depression, Hyde began a new partnership called The Yucca Company, which began manufacturing and marketing laundry and toilet soap and shaving cream. In 1889, Hyde bought out his partners and became the sole proprietor.

In addition to soap and shaving cream, one of Yucca's earliest products was a cough syrup called Vest Pocket Cough Specific, which contained a blend of camphor and menthol and had a soothing effect against burns and inflammation. Hyde became intrigued by menthol and sought to develop a new product which would take advantage of its ability to soothe and relieve pain. His idea was to make an ointment that would relieve a head or chest cold, headache, or sore throat.

In 1894, after four years of research, experimentation, and consultation with pharmacists and physicians, the company introduced 'Mentholatum Ointment' that December. The product was named by combining 'menthol' and 'petrolatum,' and enjoyed highly favorable sales. Hyde, suddenly flush with cash, decided his money would better be used to the benefit of the local community, and donated most of his earnings to churches and Christian missions. With the expansion of business, the head office and factory moved to Buffalo, New York, in 1903. In 1906, the firm adopted the name The Mentholatum Company, after its flagship product.

During the 1920s, Hyde's son, Albert Todd Hyde, who is often overlooked as a co-creator of Mentholatum, moved to Dos Palos (now known as Mitchell Ranch), California, where he bought land. He planted mint, which he harvested and shipped to his father for use in their famous ointment, which utilized the juice of pressed mint leaves. Mint Road in rural Dos Palos was named after Albert Todd Hyde's mint farm. Albert Alexander Hyde passed away in 1935 and, in 1998, was posthumously inducted into the Leavenworth, Kansas, Business Hall of Fame.

The Vories Connection and Expansion into Japan: 1913-75

The company expanded into Japan due to the work of an American missionary. William Merrell Vories was born in Leavenworth, Kansas, on October 28, 1880, not far from where Hyde was working in Wichita. He moved to Omi Hachiman, Japan, to become a missionary when he was 24 as part of the YMCA Missionary Program, teaching high school English and marrying a local woman. He founded The Vories Architectural Company in 1907 and went on to design over 1,600 buildings throughout Japan, Korea, and China, including hospitals, churches, schools, and houses during his lifetime. He also founded The Omi Brotherhood Co. in 1920 to support his Christian missionary work. Vories also created The Omi Hachiman YMCA; The Omi Sanitarium and Hospital, originally designed for the treatment of tuberculosis; and The Omi Christian School System, all of which still exist today.

Vories's connection to Mentholatum began in 1913, when he acquired the rights to sell Mentholatum products in Japan under his Omi Brotherhood Pharmaceutical Company. Vories began importing and selling the product there in 1920 under the name 'Menturm,' which was marketed through yet another company he founded that year, called The Omi Sales Company. Sales in Japan continued to grow over the years and Vories became a revered member of the business community in Japan.

Vories was instrumental in negotiations between Emperor Hirohito and General Douglas MacArthur following World War II, and is credited with Hirohito remaining emperor after the occupation of U.S. forces. Vories died in Japan in 1964, but, in 1997 (mostly due to his successful career and charity work, and partly due to his association with Mentholatum), Omi Hachiman became a sister city with Leavenworth.

East Meets West: Mentholatum and Rohto: 1975

The Rohto Pharmaceutical Co. Ltd., an Osaka, Japan-based pharmaceutical giant, had its own roots about the same time as The Mentholatum Company. Rohto was founded on February 22, 1899 as Shintendo Yamada Anmin Pharmacy, located in Osaka. In April 1909, the company released Rohto Eye Drops; when it received a newly designed container in 1931, it became a best-selling product. Yamada Pharmaceutical, as it became known in the 50 years it was in business, was renamed Rohto Pharmaceutical Company Ltd. in September 1949, and was incorporated on the 15th of that month and capitalized at ¥10 million.

A few years later, in December 1952, Rohto Peni-my Eye Drops were released and supported by radio advertisements. The following year, in September 1953, Siron, a gastrointestinal medicine, was released, and Rohto captured 47.5 percent of the market share for such products. In September 1959, growing rapidly, the company completed construction of an integrated main office, manufacturing, research and development, and distribution facility in Osaka. By October 1961, the company was listed on the second board of the Osaka Stock Exchange, and then moved to the second board of the Tokyo Stock Exchange the following year. By August 1964, the company was listed on the first boards of both the Tokyo Stock Exchange and the Osaka Securities Exchange, with an increased capitalization of ¥1.378 billion.

New products followed over the years, including Pansiron, a new and improved version of Siron, in December 1962; V Rohto, an ophthalmic medicine, in February 1964; and Namida Rohto, artificial tears, in October 1973. In January 1985, Rohto entered the home care test kits market with the introduction of Checker, a pregnancy test kit. Two years later, the company followed with Rohto Alguard, an ophthalmic medicine for allergy-related diseases, such as pollenosis.

Acquisitions began in 1974, when the company acquired the management rights to Josephine Cosmetics, a cosmetics manufacturing and sales company, and, in August 1975, The Rohto Pharmaceutical Co. Ltd. of Japan and The Mentholatum Company Inc. of the United States crossed paths for the first time, as the Japanese company acquired the trademark rights to Mentholatum and began manufacturing and selling Mentholatum Ointment and Mentholatum Medicated Lip Stick. Sales continued to grow, and the company was worth ¥2.64 billion by April 1981.

In June 1988, the management rights to The Mentholatum Company Inc. were acquired by The Rohto Pharmaceutical Co. Ltd., and the nearly 100-year-old company was delivered into the hands of the nearly 90-year-old Japanese firm.

Expansion, 1988 and Beyond

In October 1991, Mentholatum Zhongshan Pharmaceuticals, a joint venture company, was founded in Zhongshan, Guandang Province, China, as headquarters for the development of business in the Chinese marketplace for both Rohto and Mentholatum products, and P.T. Rohto Laboratories, Indonesia, was created in September 1996 to further the business expansion of both companies in that market. Rohto's Tokyo Branch Office was established in December 1996, and a new manufacturing plant was built in Ueno City, Mie Prefecture, Japan, in mid-1997.

New products continued to emerge, including Rohto's Dotest home pregnancy test kit in February 1993; a joint venture in early 1997 with Sebapharma (Germany) for the launch of Sebamed; and a joint venture in late 1997 with Whitehall, U.S.A. to enter the cold remedy market with a preparation that dissolved in hot water. Mentholatum's Deep Heating Rub, Fletcher's Castoria, and other products, representing a $1 million account, were turned over from inhouse advertising to New York-based advertising giant Campbell-Mithun-Esty for marketing.

When Rohto C3 came out in November 1995, it marked the company's entry into the contact lens supplies market. Pursuing that market with vigor, Mentholatum's eye drops began local production and sales in China in May 1996, followed in September of that year by the production and sales of intraocular lens and OTC eye drops. January 1997 brought the company exclusive rights to sell contact lenses from Cooper Vision, U.S.A.

In 1995, the company began looking for a new location for a research and development facility. Erie County, New York, where the company had retained its home since at least 1903, making it one of the oldest companies in the area, launched a bid to keep the company in its demesnes. Teamed with everyone from local CEOs and the University of Buffalo to Roswell Park Cancer Institute to the governor of New York, the county won its battle, as Mentholatum moved its headquarters into a 102,000-square-foot building on Sterling Drive in Orchard Park in 1998, which had been erected by Moog Controls Inc.

In mid-1999, the company released a new eye product called Zi. Containing natural camphor, the pH-balanced purified water solution was designed to cool and refresh the eyes. Targeted at style-conscious, 16- to 30-year-old women with 'active lifestyles,' the product was supported by a $3 million advertising campaign for television and women's magazines in its bid to capture the top spot in an industry estimated at $27 million. Zi for Eyes would go on to win Best New Eyecare Product in the 1999 Superdrug Health & Beauty Awards after only six months on the market. Another new product, Migraine Ice, chill pads for migraine sufferers, was rolled out in June of that year, to compete head-on with such products as Glaxo Wellcome's Imitrex, the sales leader in the $1.2 billion migraine drug market; AstraZeneca's Zomig; Merck & Co.'s Maxalt; Glaxo's Amerge; and Bristol Myers-Squibb's Excedrin Migraine. According to a June 1999 article in Knight-Ridder/Tribune Business News, some industry analysts estimated that 'some 33 million Americans, or approximately 15 percent of the population, primarily women, suffer from the debilitating headaches at least once a year. The annual price tag of the painful affliction includes the purchase of close to $4 billion in pain relievers. ...'

By 1999, Mentholatum alone had annual sales of more than $150 million in approximately 150 countries around the world, with such best-selling products as Migraine Ice, Softlips lip protectant, Deep Heating Rub, Natural Ice Medicated Lipbalm, Pain Patch, Fisherman's Friend cough drops, Fletcher's Castoria, Red Cross Toothache Remedy, and Red Cross Canker Sore Medication all bolstering its first and flagship product, Mentholatum Ointment. As the company entered the 21st century, Joni Sahhar, Mentholatum's director of new products, summed up the company's position. 'We're a 110-year-old company,' she said, 'but we're not done growing.' Rohto, meanwhile, enjoyed sales of ¥41.66 billion in 1999, with branch offices in Osaka, Tokyo, Nagoya, Sapporo, and Fukuoka, Japan.

Principal Subsidiaries: Mentholatum (Asia Pacific) Ltd. (Hong Kong); Mentholatum Australasia Pty. Ltd. (Australia); Mentholatum de Mexico, S.A. de C.V.; Mentholatum Pharmaceuticals P.V.E. Limited (India); Mentholatum South Africa (Pty.) Ltd.; Mentholatum Taiwan Ltd. (Taiwan) Korea; The Mentholatum Company Inc.; The Mentholatum Company Ltd. (U.K.); The Mentholatum Company of Canada, Limited (Canada); The Mentholatum (Zhongshan) Pharmaceuticals Co., Ltd. (P.R. China); P.T. Rohto - Mentholatum (Vietnam); Rohto - Mentholatum (Malaysia) SDN BHD; Rohto - Mentholatum Research Laboratories, Inc.; Rohto - Mentholatum Thailand Ltd.; Rohto U.S.A., Inc.

Principal Competitors: Glaxo Wellcome PLC; Merck & Co., Inc.; Bristol-Myers Squibb Company; Johnson & Johnson.


Additional Details

Further Reference

Angrist, Stanley W., 'Rubbing It In,' Forbes, December 20, 1982, p. 147.'CME Gets Dose of Mentholatum,' ADWEEK Eastern Edition, August 24, 1992, p. 50.'A Cooling Revival for the Eyes,' Chemist & Druggist, April 3, 1999, p. 10.'An Eye-Opening Campaign for Zi,' Chemist & Druggist, May 1, 1999, p. 12.Fink, James, 'Mentholatum Co. Evaluating Expansion Alternatives,' Business First of Buffalo, October 16, 1995, p. 3.------, 'Mentholatum Likely Buyer of Moog Plant,' Business First of Buffalo, November 11, 1996, p. 1.------, 'Niagara Compact Gets `Save' in Bid to Keep Mentholatum,' Business First of Buffalo, November 18, 1996, p. 16.------, 'Tax Breaks, Grants Aimed at Keeping Mentholatum,' Business First of Buffalo, February 26, 1996, p. 1.'It's Zi Winner,' Chemist & Druggist, October 9, 1999, p. 19.Lauro, Patricia Winters, 'Cold Comfort for Migraines,' New York Times, July 18, 1999, p. BU4.Linstedt, Sharon, 'Orchard Park, N.Y.-Based Firm to Launch New Migraine Cooling Pads,' Knight-Ridder/Tribune Business News, June 3, 1999, p. OKRB99154020.'Mentholatum Co.,' Advertising Age, August 31, 1992, p. 39.Petrecca, Laura, and David Goetzl, 'Glaxo Shifts $40 Million Imitrex Account to Grey,' Advertising Age, October 11, 1999, p. 1.'Two Inducted into Hall of Fame,' Topeka Capital-Journal, February 11, 1998, p. NA.

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