Binney & Smith, Inc.

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Binney & Smith, Inc.

founded: 1902

Contact Information:

headquarters: 1100 church ln.
easton, pa 18044-0431 phone: (610)515-8000 toll free: (800)crayola url: http://www.crayola.com

OVERVIEW

Binney & Smith, Inc. sells many products for creative and practical uses. Each year the Easton, Pennsylvania-based company produces more than two billion Crayola crayons—enough to circle the globe four and a half times. Besides crayons, Binney & Smith cranks out 200 million markers and 100 million sticks of chalk a year. The Hallmark Cards subsidiary also makes Silly Putty, the classic toy that started out as a wartime experimental rubber replacement. Revell-Monogram, the world's largest plastic model kit maker, joined Binney & Smith's toy chest full of creative activity products in 1984. Hobbyists who make those miniature hot rods and fighter planes may even use Liquitex, the world's best selling acrylic paint and another Binney & Smith brand.

Clearly the success of the Crayola brand taught the company the importance and power of cultivating a trusted name in the marketplace. Crayola remains the company's top seller and best known brand. Research shows that at least 98 out of 100 Americans recognize the Crayola brand. The smell of Crayola crayons also scores among the 20 most recognized scents, according to company literature that cites a Yale University study; coffee and peanut butter hold the top two spots, and crayons hold the eighteenth position.

The company continues to add to its carefully crafted mix of quality products. Binney & Smith sells its art supplies through both consumer and educational channels.

COMPANY FINANCES

Since Binney & Smith is privately held, they do not release financial data.

HISTORY

In 1864 Joseph Binney founded the Peekskill Chemical Works, a company that produced charcoal and lamp black in upstate New York. In 1880 Binney moved his company headquarters to New York City, where he was joined by his son, Edwin Binney, and his nephew, C. Harold Smith. When Joseph Binney retired in 1885, the younger Binney and Smith formed a partnership called Binney & Smith.

Binney & Smith boasts a long history of coloring America. Exploiting the natural gas deposits found in nearby Pennsylvania, the new company actively developed carbon black. The tiremaker Goodrich slapped Binney & Smith carbon black on formerly white car tires to make them last five times longer and look nicer. The company also made red oxide pigment used in barn paint.

Taking advantage of the region's large slate supply, the partners bought a water-powered stone mill in Easton at the turn of the century and added slate school pencils to their product line. Further responding to classroom needs, Binney & Smith introduced a dustfree chalk stick in 1902. The chalk quickly proved so popular with teachers that it won a gold medal at the St. Louis World Exposition. At the same time, the newly-incorporated company became a worldwide distributor for several carbon black producers.

When Binney & Smith representatives visited local schools to show off their popular wares, they saw a need for affordable wax crayons for students. With that in mind, the company simply reworked its industrial marking crayons by making them smaller and adding pigment to the paraffin. Edwin Binney's wife, Alice, coined the Crayola name by combining the French word for chalk, craie, with a corruption of oleaginous. The crayons were a hit with teachers and children. In 1903 the first box of eight sticks sold for a nickel. The first colors to roll off the line were black, brown, blue, red, purple, orange, yellow, and green.

Binney & Smith continued to prosper. In a generous move during the Great Depression, the company hired poor local farm families to hand label crayons. Binney & Smith added Artista brand paints and Perma Pressed sharpenable fine art crayons to their product line in the 1920s. In 1936 the company helped found the Crayon, Watercolor, and Craft Institute, which promoted safe products for the art industry. In 1949 Binney & Smith introduced a box of 48 Crayola crayons. The box featured exotic new colors, such as burnt sienna, periwinkle, and bittersweet. To fulfill growing demand, the company opened a plant in Winfield, Kansas in 1952.

America's baby boom brought more change and continued growth for Binney & Smith. In 1958 the 64-crayon box with a built-in sharpener debuted to rave reviews. That same year Binney & Smith bought two smaller crayon-making companies in Canada and England. The private company went public in 1961. By 1963 investors could buy shares of Binney & Smith through the American Stock Exchange. The company bought Cincinnati-based Liquitex in 1964.

Corporate headquarters moved from New York City to Easton in 1976. The next year Binney & Smith acquired the rights to Silly Putty, the popular play stuff that comes in an egg-shaped package. On the 75th birthday of Crayola crayons, Crayola markers debuted. In 1979 the company put all its children's products under the Crayola name and all fine art materials under the Liquitex name.

Hallmark Cards, the world's largest greeting card maker, bought Binney & Smith in 1984. The company introduced washable makers in 1987 and acquired the Magic Marker name in 1988.

FAST FACTS: About Binney & Smith, Inc.

Ownership: Binney & Smith, Inc. is a subsidiary of Hallmark Cards, Inc., a privately held corporation.

Officers: Donald J. Hall, Chmn., Hallmark Cards, Inc.; Richard S. Garin, Pres. & CEO, Binney & Smith

Employees: 2,600

Principal Subsidiary Companies: Binney & Smith is a wholly owned subsidiary of Hallmark, which is a privately held company. The Hall Family retains majority ownership while employees own the remainder.

Chief Competitors: Binney & Smith, Inc. competes with a number of companies that offer art supplies and toys. Among its competitors are: American Greetings; Gibson Greetings; Hasbro; IFE; Marvel; Mattel; Time Warner; Viacom; and Walt Disney.

The 1990s brought much hoopla and some controversy. Despite protests, in 1990 Binney & Smith retired eight classic colors to make room for brighter shades. In 1993 Binney & Smith set up a nationwide contest to name 16 new colors for their upcoming giant box of 96 crayons. Winners included robin egg's blue, macaroni and cheese, denim, tropical rain forest, and razzmatazz. In 1994 Hallmark bought kit-maker Revell-Monogram for Binney & Smith. The company discontinued food-scented crayons in 1995 after only one year on the shelves, citing fewer than 10 reports of kids eating the non-toxic products in batches of cherry, chocolate, and other mouthwatering aromas.

Drawing on other technological innovations in the 1990s, Binney & Smith began to produce crayons that changed color and glowed in the dark. The company invested $2 million in a downtown Easton renovation and development project that surrounded the planned Cray-ola Factory, a family discovery center. Timed to coincide with the opening of the Crayola Factory, the 100-billionth Crayola crayon rolled off the production line in July 1996, poured by none other than Fred Rogers of Mister Rogers' Neighborhood. The company welcomed the 100,000th Crayola Factory tourist just three months later. Binney & Smith started to consolidate manufacturing operations in 1997. It closed down its plant in Kansas and laid off 345 workers in a town of just 12,000 people, while opening a larger plant in Pennsylvania, where the company got a state grant of $800,000. In 1998 the U.S. Postal Service honored Binney & Smith with a stamp depicting the original eight-count box of Crayola crayons.

STRATEGY

From Ty's Beanie Babies to McDonald's hamburgers, top brands often rule. Binney & Smith brands include Crayola, Liquitex, Revell-Monogram, Magic Marker, and Silly Putty.

According to company literature, "The Crayola brand name is recognized by 99 percent of Americans and is ranked 51st of all world brands (1991 Landor Image Power Survey) in terms of the brand's recognizability and consumers' esteem for the brand." While closely guarding its integrity, the company has licensed its registered trademark of Crayola to more than 20 companies that make a variety of products, including costumes, watches, clocks, children's clothes, stuffed animals, and eyeglasses.

Capitalizing on its strong name recognition among adults who grew up coloring with Crayolas, the company has built a growing office products business. It also markets its products to restaurants, hotels, airlines, and specialty promotion companies.

INFLUENCES

Acting on behalf of political correctness, in 1992 Binney & Smith introduced multicultural crayons in deference to the diversity of those using the crayons. The colors, such as tan and mahogany, correspond with many different skin tones in an effort to make children aware and respectful of cultural differences. The company's own sensitivity to such matters began in 1962 when the crayon color "flesh" was changed to "peach."

CHRONOLOGY: Key Dates for Binney & Smith, Inc.

1864:: Joseph Binney founded the Peekskill Chemical Works to produce charcoal and lamp black
1885:: Joseph's retires and his son Edwin Binney and nephew C. Harold Smith form a partnership called Binney & Smith
1902:: Binney & Smith introduce a dust-free chalk stick, which wins a gold medal at the St. Louis World Exposition
1903:: The company produces the first box of Crayola crayons, selling for a nickel
1936:: Becomes a founding member of the Crayon, Water Color, and Craft Institute
1948:: An in-school training program begins to educate art teachers about the many ways to use the expanding line of Crayola products
1958:: The 64-color assortment of Crayola crayons with built-in sharpener debuts
1961:: Binney & Smith goes public
1977:: The company acquires the rights to Silly Putty
1984:: Binney & Smith becomes a wholly owned subsidiary of Hallmark
1990:: Eight traditional crayon colors are retired to the Crayola Hall of Fame
1996:: The 100-billionth Crayola crayon rolls off the production line

CURRENT TRENDS

Binney & Smith drew on high-tech innovations in the 1990s, introducing crayons that smelled good, changed color, or glowed in the dark. For the computer generation, the company teamed up with top graphics designer, MicroGrafx, to create an array of multimedia paint programs that are easy enough for kids to use. The software includes sound and animation capabilities.

PRODUCTS

Binney & Smith makes crayons, markers, chalk, colored pencils, paints, activity kits, model kits, accessories, and modeling compounds. The company makes a conscious effort to make safe, high-quality products that appeal to a broad spectrum of consumers.

Under the Crayola name, the company has made more than 100 billion crayons since their creation in 1903. That averages out to approximately two billion crayons each year—and five million each day. Studies show that North American children use about 730 crayons by the time they reach age 10. The two most popular colors remain red and blue. The 24-count box is the company's best seller. Binney & Smith even makes jumbo sized versions that wash off clothes and walls, perfect for toddlers and their parents. The company also makes glueless airplane kits and premium watercolor paints under the Crayola name.

Other branded product lines include: Liquitex, fine art and decorative art supplies; Silly Putty, the play putty that comes in 15 different colors; Revell and Monogram plastic model kits, from miniature classic car replicas to detailed military aircraft; and Magic Markers, including highlighters, permanent ink markers, specialty presentation markers, and a line of dry-erase products.

CORPORATE CITIZENSHIP

According to company literature, "Responsible corporate citizenship is one of our business operating principles that's taken very seriously. In each of our communities where we maintain manufacturing facilities, we provide support for arts, education, human services and civic organizations that work hard to make our regions better places to live."

Binney & Smith also exhibits a strong commitment to arts-in-education initiatives throughout the country. In 1984 Crayola rolled out its Crayola DREAM-MAKERS art education program that showcases the talents of elementary school students.

On the environmental front, the company proudly boasts that "more than 95 percent of our product packaging is made from recycled or recyclable materials. Scrap plastics, corrugated cardboard and other waste materials are kept from landfills through enhanced recycling efforts. Even our pencils use reforested wood, protecting tropical and old-growth forests."

GLOBAL PRESENCE

Crayola products can be found in more than 80 countries and in 12 languages. In Canada, Crayola is the only brand of crayons sold in the entire country.

The company has manufacturing and distribution facilities around the world. Plant locations include Lindsay, Ontario; Bedford, England; Mexico City, Mexico; and Indonesia. The marketing division has offices in England, Germany, France, Spain, Singapore, and Australia.

DID YOU KNOW THAT. . .

kids in North America spend 6.3 billion hours coloring each year?
North Americans buy 2.5 billion crayons annually?
most kids spend an average of almost half an hour a day coloring?
after 37 years of being Crayola's senior crayon maker, Emerson Moser told his co-workers that he was blue-green colorblind and couldn't distinguish all the colors?
Crayola crayons are made into 96 different colors. . . but there are only 18 different label colors?
Crayola crayons are translated into 12 different languages?

EMPLOYMENT

The company employs more than 2,500 people, largely located in Pennsylvania and spread out in manufacturing and distribution facilities around the world.