How did Beecham’s become the largest patent medicine manufacturer in the world?
Thomas Beecham (1820 – 1907) was an Oxfordshire shepherd who utilised his knowledge of herbs to tend his livestock. He was a coarse yet charismatic character.
Beecham began to manufacture Beecham’s pills from 1847. Comprised of aloes, ginger and soap, they had a mild laxative effect. The pills were more palatable than the traditional home remedies of the day, such as rhubarb and Epsom salts.
Beecham relocated to the booming mill towns of the North West of England. He sold his pills from a market stall in Wigan, Lancashire. He relocated to nearby St Helens from 1859.
The business was run by the family and a small number of employees until the late 1870s.
Joseph Beecham (1848 – 1916) had effectively taken control of his father’s business by the 1880s. Joseph Beecham was described as “[i]n personal appearance … the quiet, pipe-smoking, tweed-clad type of Englishman. He has neither business nor artistic pose, and is modesty itself.”
A new electric-powered factory was opened in St Helens in 1886. A factory was leased in Brooklyn, New York in order to manufacture Beecham pills for the American market from 1890.
Beecham pills held the highest sale of any patent medicine in the world by 1885. 250 million pills were sold in 1890, a quarter of all factory-made pills in Britain.
Thomas Beecham retired in 1895.
Joseph Beecham spent £100,000 a year on advertising by 1895. The factory had 120 employees, all men.
After it was discovered that he had engaged in adultery, Joseph Beecham was divorced by his wife in 1901.
Joseph Beecham had an annual income of £20,000 by 1903.
Small quantities of morphine were present in the pills from 1905 onwards.
American sales doubled between 1906 and 1913. A new factory in Brooklyn was purchased in 1910. Joseph Beecham made frequent trips across the Atlantic to attend to his American business.
The New York Times reported that Joseph Beecham was the third richest man in England by 1909, with a fortune valued at US$130 million. Beecham was knighted in 1912, in recognition of his philanthropic work.
Beecham spent US$5 million on advertising between 1903 and 1913, and was one of the most extensive newspaper advertisers in the world.
Over 450 million Beecham pills were sold worldwide in 1913. The annual advertising budget was $5 million.
Ten billion pills had been sold by 1914.
Before his death, Sir Joseph Beecham handed the American business to his son, Henry Beecham (1888 – 1947).
Sir Joseph Beecham died in 1916, and had an estate valued at £1.5 million. The British business was passed to his two sons, Henry Beecham and Thomas Beecham (1879 – 1961).
Henry Beecham sold his entire interest in Beecham’s Pills to James White (1877 – 1927) in 1919.
Henry Beecham was convicted of manslaughter in 1921 after speeding in his car. He was sentenced to twelve months in prison.
Philip Hill and public offering
Philip Ernest Hill (1873 – 1944) acquired the business, largely from Thomas Beecham, for £2.8 million in 1924.
Hill was a skilled entrepreneur, and established a new laboratory. The company’s first pharmaceutical product, an aspirin-based cold and flu powder, was introduced in 1926.
The Veno Drug Company of Manchester, a manufacturer of cough syrup, was acquired in 1928.
Beecham’s Pills was incorporated as a public company in 1928.
Yeast-Vite, including Holloway’s Pills, was acquired in 1931.
1938 saw two major acquisitions: Macleans, a toothpaste manufacturer which also produced the Lucozade medicinal drink, was purchased for over £2 million, and Eno Proprietaries, best known for its Fruit Salts product, was acquired. Macleans provided valuable research facilities whilst Eno provided Beecham with one of the best international pharmaceutical distribution networks in the world.
County Perfumery, the manufacturer of Brylcreem, was acquired for £600,000 in 1939. Brylcreem was a relatively new hair-styling product for men that had achieved rapid growth in Britain and come to dominate the market. Unlike previous products it used a water and oil emulsion which offered improvement on competitors that used alcohol or oil. Hill announced plans to increase export sales through the Eno network.
According to Henry George Lazell (1903 – 1982), later chairman of Beecham, “with the acquisition of Macleans, Eno, and Brylcreem, Philip Hill swamped the old proprietary medicines and laid the foundations for Beecham Group”. Eno’s Fruit Salts, Macleans toothpaste and Brylcreem drove growth overseas.
20th century continued growth
Following the death of Philip Hill in 1944, Stanley Holmes (1878 – 1961) became company chairman.
Holmes was keen to reduce Beecham’s dependence on medicines, and acquired C&E Morton, best known for the Murraymints confectionery brand, for £180,000 in 1945.
Lazell believed that strong investment in research and development would be required if Beecham was to compete effectively with its American rivals such as Procter & Gamble, American Home Products, Sterling Drug and Colgate-Palmolive. At his suggestion, a research laboratory was established at Brockham Park, Surrey, in 1947.
A single product, Lucozade, provided one third of Beecham’s British profits in 1949.
H G Lazell was appointed managing director of Beecham in 1951. He was to become the driving force behind the subsequent growth of the business, with a strong commitment to marketing and research and development. Lazell said, “Beechams is essentially a ‘marketing’ company managed since 1951 by marketing men”.
The American market began to be targeted in earnest, led by Brylcreem.
In order to render the Lucozade operation more profitable, Lazell determined to increase Beecham’s scale in the soft drinks market. H W Carter, the manufacturer of Ribena, was acquired in 1955. Thomas & Evans, probably the largest volume producer of soft drinks in Britain, and best known for the Corona brand, was acquired for £7.65 million in 1958.
Lazell was appointed company chairman in 1958.
North American sales dwarfed British sales by 1958, largely driven by the success of Brylcreem, where it was the market leader in men’s hair products.
Beecham was the second largest advertiser in Britain by 1960.
Macleans began to be promoted in the United States from 1960. It held fourth place in the toothpaste market by 1964, with a market share of eight percent.
Lazell retired as managing director and chairman in 1968.
Horlicks was acquired for £14 million in 1969.
Beecham employed around 23,000 people by 1972.
Beecham was the eleventh most highly-valued public company in Europe by 1982.
Beecham merged with SmithKline Beckman to create the second largest pharmaceuticals group in the world in 1989.
SmithKline Beecham was the 43rd largest company in the world, as measured by market value, in 1992.
Brylcreem was sold to Sara Lee in 1993.
The Beecham factory in St Helens was closed with the loss of 480 jobs in 1994. The production of Beecham’s Pills was ended in 1998, with the manufacturer suggesting that Milk of Magnesia be used as a substitute.
Block Drug of the US, best known for the Sensodyne toothpaste brand, was acquired for £850 million in 2000. SmithKline Beecham became the second largest toothpaste manufacturer in the world.
Title image used courtesy of the Science Museum, London.