Jubilee special: 60 years of consumer brands

60 years of diamond brands

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During the reign of Queen Elizabeth II, British industry has been transformed by the combination of overseas competition and what Harold Wilson called "the white heat of technology". Entire industries were put out of business after its protected markets were opened to the European Economic Community in the 1970s, while new technologies have created and destroyed many others.

The uncertainties brought about by such changes prompt many investors to put their money into businesses that have good defences against competition and new technology. Two industries that possess such features in abundance are consumer goods and distilleries, where companies are essentially making the same products today as they did 60 years ago.

Here are some of Britain's best.

The big three

Among the many multinationals based in Britain are two of the biggest players in the global consumer-goods market, Reckitt Benckiser (LSE: RB) and Unilever (LSE: ULVR), as well as the world's largest distiller, Diageo (LSE: DGE).

All three companies have been members of the FTSE 100 since the index was formed in 1984. The quality of their products and the strength of their brands ensure customers keep loyal, while their long-established positions in their markets make it tough for rivals to compete.

Few businesses can match the longevity of Reckitt, Unilever and Diageo, and I'm convinced they will still be selling their products long after many of today's corporate titans, especially those in the information-technology sector, live on only in the history books.

Famous names

Just try walking more than 10 metres in a Woolworths (ASX: WOW), Wesfarmers (ASX: WES) or Metcash (ASX: MTS) supermarket or bottle shop without seeing at least one of these companies' products. The main exception is if you're in the fruit and vegetable aisle, as fruit and veg are rather hard to brand.

Diageo makes many of the world's most popular alcoholic drinks, including Bundaberg RumGuinnessJohnnie WalkerPimm'sSeagram's and Smirnoff. Most of its products have been made for well over a hundred years, though Captain Morgan rum is a relative newcomer, having been first distilled in Jamaica during the Second World War. Meanwhile, Bailey's Irish Cream is a mere baby, having come onto the market in 1974.

Cleaning up the world

Reckitt specialises in household cleaning products and healthcare goods, so you'll find its brands such as Air WickBrassoClearasilDettolGavisconHarpicMr SheenNurofenScholl and Strepsils in most houses under the sink, in cupboards and in medicine cabinets.

Reckitt's products don't quite have the history of Diageo's range (the first batch of Johnnie Walker was produced in 1820), though most of them pre-date the Coronation. Dettol was created by Reckitt & Sons in the 1930s, while Harpic was invented by Harry Pickup (hence the name) in the 1920s.

Unilever sells a variety of cleaning agents, food, drinks and personal-grooming products. Among its portfolio of 400-plus brands are PG TipsDomestosFloraHellmann'sLiptonLynxMarmitePersilVaseline and Wall's ice cream (just so you know, the Wall's brand of meat products is owned by Ireland's Kerry Group (LSE: KYG)).

Similar to Reckitt and Diageo, many of Unilever's brands have been on sale for more than 60 years. In fact, some are much older than that — Lifebuoy soap (1894) and Knorr (1838) for instance were first established during the reign of Queen Victoria!

Market dominance

All three companies' products are on sale in most countries so their businesses are not especially dependent upon any one market, though Diageo stands out since it makes roughly one-third of its sales in North America. In most of their markets, the three companies' products occupy one of the top three positions.

You'll find Diageo's drinks on the top shelf of virtually every pub and bar on the planet; Reckitt dominates the market for household-cleaning products while Unilever and its biggest competitor, Procter & Gamble (NYSE: PG.US), are locked in a battle to supply the powder for the world's washing machines.

A bit of history

Diageo was formed in 1997 when Guinness merged with Grand Metropolitan. Grand Met's quoted history dates back to the 1960s and initially involved hotels. Its move into drinks started in the 1970s through the purchase of Watney Mann and the Truman brewery. Guinness, meanwhile, must have one of the oldest lineages in the market, having started off life in 1759 when Arthur Guinness signed a 9,000-year lease for a brewery site in Dublin.

Reckitt Benckiser goes back to 1814, when Jeremiah Colman founded Colman's Mustard, while the group's modern incarnation was created in 1999 when Reckitt Colman merged with Johann Benckiser's industrial-chemicals business (founded in 1827). (Colman's Mustard is nowadays owned by Unilever.)

Unilever was founded in 1930 after Lever Brothers (soap) merged with the Dutch company Margarine Unie (margarine).

Their prospects

All three companies should do as well for their shareholders in the next 60 years as they have done in the last 60. Sales of their products are particularly strong in emerging markets, where rising incomes are creating a global middle class of consumers, which should more than offset the fall in consumer demand from developed markets as Europe struggles with its debts and unaffordable welfare states.

Unilever has the largest emerging-market exposure of the three companies (over 50% of its sales), in large part because of its presence in the global tea market during the latter years of the British Empire. One of Unilever's biggest subsidiaries is the 52%-owned Indian business Hindustan Unilever, which is quoted on the Bombay Stock Exchange, whose origins date back to 1888 when Lever Brothers started shipping English-made bars of Sunlight soap to Calcutta.

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The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

A version of this article, written by Tony Luckett, originally appeared on fool.co.uk

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