Brian Buchert chuckles when he tells the story.
He was in line, buying a sandwich — pre-pandemic — and he could hear some of his colleagues at Church & Dwight who were a few people ahead of him.
They didn’t know Buchert, the company’s vice president, corporate strategy and M&A, was there. They just knew they didn’t like the latest acquisition the consumer products giant had made: Toppik, a product that helps people with thinning hair.
“They were crushing me, ripping me to shreds,” he said. “They’re like: ‘I don’t understand what we’re doing. This doesn’t make any sense. Have we lost our minds?’”
Buchert waited until the colleagues had finished paying, then he tapped one on the shoulder.
“She was horrified, turned white,” he said. “I told her: ‘It’s OK. I get it. And, if you have a minute, I’ll explain it to you.’”
Executives at competing consumer product companies — Proctor & Gamble, Unilever and others — would love to hear what came next.
Perhaps it would bring some insights into why Church & Dwight, headquartered in Ewing Township, may be the most successful company in the group, with a sales-per-employee ratio no one can match. In 2020, the company increased its earnings per share to $3.12, a 27.9% increase that exceeded expectations. Its full-year net sales grew 12.3%, to $4.9 billion.
It’s a success that Buchert has helped create in his 16 years at the company. And it has come because of companies such as Toppik, not in spite of them.
But Buchert gets it. He’s the first to admit it may appear to an outsider that there’s no rhyme or reason to how Church & Dwight goes about its business. There is. And it’s basic, Buchert said.
“Our strategy has been the same for the last 16 years,” he said. “We acquire really great brands, add them to the family. And then we grow them.
“It’s really that simple. And it’s part of the reason why it’s just me in this role. I don’t have a team — haven’t for 16 years.”
It’s part of the reason why Church & Dwight is being honored by ACG with its Corporate Lifetime Achievement Award at its annual event May 6 (it’s virtual; get more info here).
Don’t be fooled. There is a little more involved.
Buchert admits the company has a four-part test for acquisitions. He’s willing to share three.
- No. 1: The company must be the No. 1 or No. 2 brand. “Never buy a brand that’s No. 3-4-5-6-7,” he said. “Because there’s a reason why it is. And it’s never going to catch the No. 1 or No. 2.”
- No. 2: Make sure it is at least equal to our evergreen top-line model. “It’s got to grow 3% or more, or don’t bother,” he said.
- No. 3: Make sure it is asset-light. “We don’t want big, expensive clients,” he said. “We want to be able to outsource production. We want really high-margin businesses that don’t require a lot of capital and upkeep and people.”
As for No. 4 … that’s when Buchert holds back on the specifics.
The company does have a secret sauce — a secret formula that every potential acquisition must fit into. No exceptions.
“We use a proprietary metric that no one uses,” he said. “I don’t use any of the traditional metrics that other companies use.”
He said that is the unifier of a company that seemingly has a hodgepodge of brands. It certainly starts with Arm & Hammer and OxiClean, but also includes Vitafusion (gummy vitamins), Batiste (dry shampoo), Trojan and WaterPik.
“Everything we buy is based on this math formula,” he said. “It is totally unemotional. We don’t get crazy over deals. We don’t chase anything. It’s simple math. Here’s how far we go. It doesn’t go there, then it’s good-bye, see you later.”
This is what Buchert explained to the colleagues at the deli. Afterward, he realized more of the company’s nearly 5,000 global employees needed to hear it, too.
So, he went to a number of senior executive meetings with a slideshow presentation. On it was the math — the metrics of all the brands the company owns. But no brand names.
“I said, ‘Tell me, which brand do you think is represented by which metrics?’” he asked. “No one had a clue.
“Then I said: ‘Look at them really closely. They’re all the same. Every one of them follows the formula.’”
And that is the secret to Church & Dwight’s success, Buchert said.
“We don’t care what the company is or where it is,” he said. “We care about the math.”