Benjamin Moore & Co.

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Benjamin Moore & Co.

51 Chestnut Ridge Road
Montvale, New Jersey 07645
U.S.A.
Telephone: (201) 573-9600
Toll Free: (800) 344-0400
Fax: (201) 573-0046
Web site: http://www.benjaminmoore.com

Wholly Owned Subsidiary of Berkshire Hathaway Inc.
Incorporated: 1883
Employees: 2,214
Sales: $779.5 million (1999)
NAIC: 32551 Paint and Coating Manufacturing (pt)

Benjamin Moore & Co. is a leading manufacturer of highquality paints, stains, and protective coatings, with operations in both the United States and Canada. From its origins as a family-run paint business, the firm grew into an industry leader, ranking as the fourth largest U.S. paint company and seventh top brand, with a seven percent market share by 1992, according to Chemical Business, an industry periodical. By the 1990s, approximately 3,500 independent dealers in the United States and 1,500 in Canada distributed Benjamin Moore products, ranging from interior and exterior latex and oil-based paints to industrial maintenance coatings, safety-coated industrial enamels, porch and floor enamels, wood stains and finishes, and swimming pool paint, in a broad spectrum of colors.

The 1880s: Quality from the Start

The company’s origins date back to 1883, when Benjamin Moore and his brother, Robert Moore, started a family-run paint business in Brooklyn, New York. At the time, the paint and coatings industry was still in its infancy; not until the mid-1880s did paint producers move decisively toward bulk production and distribution of their products. Chemical advances in such areas as film-forming compounds, emulsions, and inorganic pigment production helped the growing industry cover more and more ground—and surface area—with increasingly durable and adhesive products. Benjamin Moore rode the wave, growing rapidly beyond the regional market of New York and, within years, across the border into Canada and beyond.

From the outset, the Moore brothers distinguished themselves from the competition by stringently adhering to their slogan: “quality, start to finish.” Most other paint manufacturers laid claim to products of comparable quality, but the Moores were unique in their willingness to risk market share by charging premium dollar for truly premium paints. This strategy would eventually pay off; once the company had cornered the market niche that was willing and able to distinguish truly premium quality paints—by such criteria as greater durability, broader color spectrums and pigment quality, and easier application—they could depend on their reputation for continued success. Indeed, the numbers demonstrated that consumers were willing to pay top dollar to invest in protective—and beautifying—coatings for their homes and equipment.

From the outset, Benjamin Moore implemented a distribution strategy that helped maintain its niche appeal to premiumquality paint users and helped separate it from the competition. Into the 1990s, the company sold its products only through independent Benjamin Moore paint dealers. Generally, paint reaches the consumer in one of three ways: Companies can make private-label paints for retailers; they can sell their own brands in hardware stores, home centers, and decorating stores; or they can operate their own retail stores, selling to consumers and painting contractors. While most companies employ a combination of these methods, Benjamin Moore has adhered to its strict system of certifying specific dealers and selling its products only through them.

Benjamin Moore’s other characteristic trademark was the closely guarded nature of its business operations. Two generations after its founding brothers plied their trade, the company continued to guard the details of its internal workings and history. In a 1983 celebration of its centennial anniversary, Benjamin Moore made exception to its administrative secrecy, compiling an in-house brochure titled “100 Years of Progress,” which included biographical information on the founders and accounts of the company’s early history. Unfortunately, by the 1990s, the company was no longer making this brochure available to the public. Nevertheless, the success of Moore products has delineated a historical narrative for itself.

That narrative described continued growth for the company through World War I, the difficult Depression years, and into the World War II era. In the mid-1940s, the research and development of latex-based paint products proved beneficial to the paint industry in general. As legislation in various states increasingly controlled sol vent-thinned paint products, water-based latex paints became more attractive and more environmentally welcome. Moreover, they were noted for ease of application and cleanup, a beautiful finish, durability, and outstanding protective qualities. Benjamin Moore capitalized on consumer demand for the new product by introducing its own latex line, which grew into several more specialized lines in the decades that followed. By the 1990s, Benjamin Moore offered a latex product for virtually every application. For exterior finishing, the products included: MoorGlo Latex House & Trim Paint, MoorGard Latex House Paint, Moore’s Flat Exterior Latex House Paint, Moore’s Latex Floor & Patio Enamel, Moore’s Latex Exterior Primer, Impervex Enamel, and Moor-wood Vinyl Acrylic Latex Stain. The Moore line of interior latex products included: Regal Wall Stain, Regal AquaGlo, Impervex Enamel, Latex Enamel Underbody, Latex Quick Dry Prime Seal, Latex Urethane Acrylic Finish High Gloss, and Latex Urethane Acrylic Finish Low Lustre.

Paint Products for the Postwar Era

Having focused efforts on numerous industrial coatings for the war effort, Benjamin Moore was positioned to market related products for civilian and industrial use in the postwar era. In 1948, the company founded its Technical Coatings Co. to formulate and manufacture a complete line of primers and topcoats for general industrial coatings as well as coatings used for both rigid and flexible packaging, vacuum metallizing, wood finishing, and coil stock. Five decades later, that division retained its high standing in the industry and continued to grow, acquiring the general industrial coating business of Cook Paint and Varnish Co. of Kansas City, Missouri, in late 1991.

Moore’s move into industrial coatings was just one example of how the company accommodated new trends with its marketing strategies and product lines. The passage of the Occupational Safety and Health Act (OSHA) in 1971 helped set up a whole new niche market of industrial operations seeking quality color-coded coatings to meet the new safety standards. OSHA required that all industries color mark physical hazards, safety equipment locations, and fire and other protective equipment, according to the American National Standards Institute (ANSI) code. Moore transformed those legal restrictions into business opportunities, including OSHA/ANSI-compatible colors in its IronClad Quick Dry Industrial Enamel line of paints.

With the rise of computer technology in the everyday affairs of the 1980s, Benjamin Moore once again adapted to the times, introducing computerized color analysis systems to help its dealers match precise pigments to customers’ needs. Previously, dealers had depended on the company’s proprietary Moor-O-Matic color matching system, using charts, gradation sheets, and a good measure of eye expertise to match up to 1,600 colors to particular projects. The new computerized system, introduced in the early 1980s, analyzed color specimens to provide a formula indicating the base and the precise types and amounts of colorants to match the sample. The system could match virtually any color, with the exception of certain intense or fluorescent colors beyond the paint pigment spectrum. The computerized system was developed over a seven-year period by Benjamin Moore and Digital Equipment Corp. and consisted of a spectrophotometer (color analyzer) and a minicomputer loaded with color-matching software fine-tuned to Moore’s paint products.

In 1985, Benjamin Moore also organized a financing plan that would bring the $24,900 computerized system within the budgets of interested dealers. After making an initial ten percent deposit on a system, Benjamin Moore dealers were offered a four-year payment plan by the company. Maurice Workman, Moore’s president at the time, told the Business Journal of New Jersey on June 13, 1985 that the computer sales were not income producing for the paint company, but were offered as a means of increasing paint sales for its dealers. The bottom line, however, was beneficial to both Benjamin Moore and those dealers that saw improved sales from the technological sales assistant.

Financial assistance to its certified dealers was nothing new to Benjamin Moore. In the 1960s, the company initiated its Temporary Co-Ownership (TCO) program, which provided minority entrepreneurs with the initial funding needed to open a neighborhood paint store—usually approximately $200,000. As the budding businesses turned profitable, the plan called for them to begin buying back their stock, until they fully owned the operation. After the 1992 Los Angeles riots and the media focus on neighborhood reinvestment projects, Benjamin Moore’s longstanding program drew considerable attention—and praise. Moreover, in mid-1992, the company announced that Triad Systems Corp. would provide automated business and inventory management systems for the outlets participating in its TCO program. The system would permit maximum efficiency and productivity at the store level and also would use a telecommunications package to transmit data—inventory, sales figures, etc.—to a centralized collection point. Still, the main objective remained the bottom line: “This is not an altruistic move on our part; this is good business for Benjamin Moore,” said Billy Sutton, western division vice-president for the company, in an August 31, 1993 Los Angeles Times article.

Company Perspectives:

The heirs of the original founders and directors continue among those who guide the company today. And while product offerings have expanded and changed, Mr. Benjamin Moore’s original philosophy for guiding the company remains in effect to this day: “First … a fair deal for everyone. Second … the giving of value received without any graft or chicanery. Third… a recognition of the value of truth in the representation of our products and an effort at all times to keep the standard of our goods up to the highest mark. And last… the practice of strict economy without the spirit of parsimony, and the exercise of intelligent industry in the spirit of integrity.”

Environmental Awareness in the 1980s and 1990s

Benjamin Moore had expanded its coverage through thousands of independent dealers in the United States and Canada from the 1950s onward. In the late 1980s and early 1990s, however, the company took more aggressive steps not only to expand its national market share, but to position itself for international growth potential. In 1985, the company opened a new plant in Pell City, Alabama, followed in 1991 by another in Johnstown, New York. In order to develop markets in British Columbia and, eventually, the northwestern United States, the company opened its facility in Aldergrove’s Gloucester Industrial Estates (western Canada), replacing the plant it opened in Burnaby in 1964. The plant, outfitted for production of both latex and alkyd trade sales paints, nearly doubled the company’s production capacity on the West Coast. “The plant is designed as a completely closed loop system, for both water-bornes and solvent-bornes. Nothing will be released to either the sewers or the air,” said Ron Hoare, senior vice-president of the plant, in a November 1991 Coatings article.

Such environmental conscientiousness, though not new to Benjamin Moore, saw more stringent implementation in response to new Volatile Organic Compounds (VOC) rules and regulations issued by the Environmental Protection Agency and other agencies since the 1980s. As such rules shifted according to region, Benjamin Moore and other paint producers tailored paint formulations to fit VOC standards for the various jurisdictions, making compliance more difficult, though no less prioritized, for the company. “Paint is really a very small part of the emissions problem,” Walt Gozden, technical director of Rohm & Haas’ Paint Quality Institute, told Building Supply Home Centers in a July 1990 article. “But whether that is fair or not, paint manufacturers and retailers are going to have to comply with existing laws,” he added.

Benjamin Moore not only complied with environmental laws, but continued to stand out as a particularly “environmentally friendly” paint manufacturer. When the Technical Coatings subsidiary set up a new facility at its Burlington, Canada site in 1992, for example, VOC considerations were a top priority. Alastair MacDonald, the plant’s technical director, explained in a May 1992 Coatings article that the entire industry had moved in the direction of waterborne and powder coatings to meet environmental regulations. In mid-1995, Benjamin Moore received a Pollution Prevention Award for its Milford, Massachusetts facility’s source reduction and recycling activities, which had been in operation since the 1970s.

Along with moves toward environmental efficiency, Benjamin Moore prepared for the 21st century by implementing stateof-the-art computerized management tools at all its facilities. In August 1992, the company began a transition from mainframebased data processing to client-server computing by installing a nationwide network of 17 IBM AS/400s and 150 PCs. The company began using the software to automate its entire manufacturing operations, from order entry and inventory management to formula management and invoicing.

That same year, Benjamin Moore invested approximately $3.5 million in a state-of-the art technical and administrative center in Flanders, New Jersey. The facility housed the company’s central laboratories and data processing and engineering departments, as well as a model store for sales training and a “paint farm” for rigorous testing of paint products. “The growth of these organizations, along with our desire to create a corporate training center called for a central facility which could accommodate several interrelated departments,” Benjamin Belcher, Jr., executive vice-president, noted in the New York Times on July 5, 1992.

As both consumers and retailers started looking at painting as a system and not just a product, Benjamin Moore developed increasingly sophisticated marketing solutions. One particularly resourceful marketing tool was a 1993 company publication entitled A Stroke of Brilliance, a book packed with information and tips on how consumers could apply color and paints to their decorating needs. Interior designer Leslie Harrington presented her expertise in a readable and, not surprisingly, colorful format. The book addressed common questions about how colors match or complement one another, as well as suggestions for painting projects, which ranged from applying matching paint to shower curtains and bathroom walls, to making painted rugs, decorated stairs, stenciled floors, and achieving specialty wall finishes. The book was distributed nationwide at all authorized Benjamin Moore dealers at a cover price of $11.95.

The company also produced “Fantasy Finishes and Beyond,” a videotape, also featuring Leslie Harrington, providing step-by-step instructions and lists of tools, techniques, and types of paint for various finishes and design projects. Video technology also was used to develop the Video Color Planner, a color visualization video system that allowed consumers to experiment with the entire selection of Benjamin Moore paints on a video screen. After selecting from a wide variety of pre-programmed interiors or exteriors—or even scanning in images of their own homes—consumers could use a trackball and mouse to apply test colors and finishes on screen before actually rolling up their sleeves onsite.

Benjamin Moore also moved into aggressive television advertising, airing the 1993 “Stroke of Brilliance” campaign comprised of spots featuring Myrna Loy in a scene from “Mr. Blandings Builds His Dreamhouse.” The following year, the company adopted a new theme, “We Decorate Your Life,” with ads featuring the popular Kenny Rogers tune “You Decorated My Life.” Print ads reflecting the TV spots also appeared in national lifestyle publications, including Better Homes & Gardens.

Key Dates:

1883:: Brothers Benjamin and Robert Moore launch painting business in Brooklyn, New York.
1892:: Benjamin Moore introduces Muresco white paint.
1907:: Sani-Flat interior paint debuts.
1929:: Benjamin Moore establishes home decorating department.
1948:: Technical Coatings Company is formed.
1959:: Moor-O-Matic Color System Debuts.
1968:: Benjamin Moore removes lead from paint formulations.
1993:: A Stroke of Brilliance is published.
2000:: Berkshire Hathaway announces acquisition of Benjamin Moore.

Realigning its expanding advertising program, the company discontinued all regional agencies—such as an estimated $2 million to $2.5 million account with Chicago-based Keroff & Rosenberg, which closed in late 1994—and consolidated its advertising with Gianettino & Meredith in New Jersey. Although Keroff & Rosenberg had helped make Chicago the number one market for the paintmaker, Benjamin Moore preferred to centralize its advertising efforts as much as possible into the 1990s.

In a similar vein, the company’s Canadian subsidiary launched an aggressive customized flier campaign to aid in the development of a database and a centralized marketing program. Following up on a similar campaign the previous year, in April 1994 Benjamin Moore Canada mailed four million customized sweepstakes promotion fliers to retailers for customer distribution onsite or through the mail. It marked the first step toward collecting names for loyalty programs planned for 1995, according to President Charles deGruchy of Salter deGruchy Christenson, the agency in charge of the campaign. In addition, the data compiled by the campaign was used for profiling the creation of models for prospecting, according to deGruchy in an April 18, 1994 DM News article.

In the mid-1990s, Benjamin Moore continued to expand its global coverage as well. In April 1994, the company announced the formation of a joint venture with Southern Cross Paints, a paint manufacturer headquartered in Auckland, New Zealand, and its existing subsidiary, Benjamin Moore & Co. (NZ) Ltd. The new company, Benjamin Moore Pacific Limited, manufactured both decorative and industrial maintenance coatings. “This joint venture will enable us to meet the growing demands of our existing customer base as well as provide the newest technologies being developed in the coatings industry,” stated David Arnold, sales and marketing director of Southern Cross Paints, in American Paint & Coatings Journal on May 9, 1994. For Benjamin Moore, the venture extended the company’s growing global presence and added to the list of manufacturing locations that it already boasted in the early 1990s: Newark, Boston, Richmond, Jacksonville, Johnstown, Cleveland, Chicago, St. Louis, Houston, Dallas, Birmingham, Denver, Los Angeles, Santa Clara, Toronto, Montreal, and Vancouver, as well as thousands of dealers across North America.

Into the 21st Century

As it approached the year 2000, Benjamin Moore had positioned itself as one of the leading paint manufacturers in North America and one of the top 500 private companies. Net sales increased steadily in the last five years of the decade, rising from $564 million in 1995 to $779 million in 1999. By 1999 there were 73 company-owned stores nationwide, along with more than 3,700 authorized retailers in the United States and Canada. The company continued to make strategic acquisitions designed to enlarge its share of the retail paint outlet market, purchasing Janovics/Plaza Inc. in 1999 and Virginia Paint Company the following year. In 1999 it also implemented its Banner Store Program in Canada, to establish uniform standards for advertising and store displays among its sellers north of the border. By the end of the year more than 120 dealers had converted their storefronts to the new system, and another 100 were expected to comply in 2000.

The company also undertook significant restructuring measures in the late 1990s, in the hope of consolidating its operations and ceasing production at its more antiquated, inefficient manufacturing plants. The plan necessitated the closing of four facilities nationwide, as well as the cessation of manufacturing operations at an additional four plants—effectively cutting the total number of the company’s manufacturing facilities from 16 to eight. At the same time, distribution centers in Cleveland, Newark, and Melrose Park, Illinois, were relocated into larger, more modern facilities. The company also instituted an early retirement plan, which reduced its workforce by 300 employees. In 1999 the company terminated its ownership interests in Australia and New Zealand.

In 1996 Benjamin Moore extended its commitment to environmental concerns when it joined the Coatings Care Program, a project spearheaded by the National Paints & Coatings Association. The goal of the program was to adopt the highest environmental, health, and safety standards in the industry. As a member of the program, the company was able to anticipate the stricter standards imposed by the revised Volatile Organic Compounds (VOC) regulations, which went into effect in September 1999.

The company also was able to apply its environmental awareness to product development in the late 1990s. In 1999 it introduced its Pristine Eco-Spec line of acrylic latex interior paints. In addition to drying very quickly, the innovative new paint contained no solvents and, therefore, released no harmful VOCs—a particularly important quality for painters who worked indoors. At around the same time the company improved its color selection system with the launching of the Color Preview Studio, a revolutionary interactive store display that enabled customers to preview what colors would look like in a home environment. The Studio, which featured a three-dimensional “Room with a View” and more than 1,400 colors, debuted in Benjamin Moore retail locations in January 2000.

The most radical development, however, occurred near the end of the year. On November 8, 2000, after more than a century as a major independent paint manufacturer and retailer, Benjamin Moore entered into a merger agreement with Berkshire Hathaway, the Omaha, Nebraska-based holding company led by Warren Buffett. The deal, worth approximately $1 billion, made the paint company a wholly owned subsidiary of Berkshire Hathaway. The buyout, however, was not expected to affect the management structure or operations of Benjamin Moore in any meaningful way, and company officials remained extremely optimistic about the company’s future as the acquisition moved forward.