Over in Baltimore, a quiet, low-profile company makes a product whose name has been a household word for generations.
Amazingly, though, many area residents, when asked, will say they did not realize Noxzema was made by a local company.
The skin-care cream in the blue jar was first created in 1914 when a Baltimore pharmacist exclaimed that a home-brew concoction he'd made "knocks my eczema." Its maker, the Noxell Corp., has grown since that time into a cosmetics-industry contender that also produces Cover Girl, the largest-selling brand of liquid make-up in the low-priced mass merchandise market.
The low-key company is run by the pharmacist's grandson, George L. Bunting Jr. A good illustration of the company's conservatism is the caution with which it exercised its option to buy Wick Fowler's Two-Alarm Chili. Noxell tested the chili waters about it for five years before agreeing to purchase the Austin, Tex., company.
The company has been characteristically quiet about its considerable activity over the last year, which has included opening its own powder-pressing plant; launching a new line of cosmetics in Europe and new lipstick and nail-color lines here, and researching the market for "picante" sauces.
Over the last five years, Bunting said, the company has maintained a steady 14 percent growth rate. Third-quarter net income was $6.7 million (67 cents a share) over last year's $6.0 million (60 cents). Fourth-quarter profits are expected to show an increase of 20 percent over last year, Bunting said.
Moreover, Noxell has no debt and, except for one short period, has never borrowed money, according to Senior Vice President for Administration and Finance Leslie G. Schek, who added that recent construction, real estate purchases and other expansion moves have been paid for with working capital.
Bunting said that, over the last five years, Noxell has returned dividends of about 30 percent of its income. He also noted that the company has paid a dividend every year since it was founded.
The company is not conservative in one area -- advertising. Noxell's prime-time television advertising with models such as Cheryl Tiegs, Christie Brinkley and Jennifer O'Neill consumes 25 cents of each Noxell dollar, compared with the industry standard of about 9 to 10 cents.
Noxell attributes its recent earnings rise to Cover Girl sales, which are growing at a rate of 20 percent, according to Salomon Brothers analyst Diana Temple. Consumers are "more value-conscious now," Temple said. That reinforces the tendency to shop in the mass-merchandise, drugstore market where Cover Girl is sold, rather than in more expensive department stores, she said.
Various merchandising tactics -- such as Noxell's method of selling to stores the "display modules" on which cosmetics are arrayed -- generally help boost earnings, Schek said. The tall pegboard racks are given to a store manager free of charge as long as only Cover Girl products are displayed on them. Noxell offers the store the option to purchase additional racks for competitors' products.
The company believes that this practice enhances trade relations and helps its merchandise get more prominent display, Schek said. Or, as Bunting related, "If an account converted their display to these units, they sold more. Everybody liked that." Other cosmetic firms also make similar display units.
Noxell mainly believes in doing fewer variations on a particular product theme. Whereas Revlon may put out 1,200 shades of eyeshadow and Maybelline might sell 600, Noxell would make only 300, acting on the belief that the products then turn over more quickly.
"We might turn at twice the rate as Revlon because we have fewer items, but we sell just as much because people are buying more in the line ," Bunting said. "The trade likes that because they're getting higher volume."
"If we're constantly producing different shades, we're less efficient in our manufacturing. Our production run is longer," Schek said.
However, Noxell's toiletry products, which include the famous sunburn ointment as well as shaving products and Rain Tree moisturizing lotion, have not shown the same growth -- either in the past year or more traditionally -- as Cover Girl.
"Noxzema is doing a little better but it's not setting the world on fire," said Temple of Salomon Brothers. "Most American women still use a bar soap to cleanse their face."
In moisturizers, the company has made the concession that "Oil of Olay is the market," Schek said. "They were there first, and they have a European image," to which consumers currently seem attracted in a variety of products, he said.
The European image, and Noxzema's lack of it, has always been a fly in the company's ointment. The fact is, Schek said, Europeans don't like the smell of Noxzema. "It's a distinctive product," he said euphemistically.
Noxell perceives Noxzema as traditional, family product whose use is perpetuated from generation to generation. But the custom of using Noxzema as a sunburn ointment or skin cleanser is a distinctively American one, Schek said, not European.
"Cover Girl is the only one of our products sold in Europe," except for the new Feya line, added Vice President and Secretary Robert W. Lindsey. "The European market is highly fragmented, and they have their own products, like Nivea lotions ."
Cover Girl was first introduced on the European market in a Swiss chain, then in the Scandinavian and Benelux countries, and is just now being launched in France.
But Lindsey said it's an uphill battle: "We're fighting distribution in Europe. Customers there are used to buying in parfumeries."
Cover Girl has been in Australia for two years. However, Noxell has not had much success in Japan. Cover Girl was being distributed there by Shisheido, a cosmetic chain whose products now sell in U.S. department stores, but Noxell is now preparing to use a different Japanese distributor.
Noxell has a Canadian subsidiary, and the comparison of the two companies further points up the parent's conservative approach. If anybody could make a successful suntan lotion for sale in the United States, it would be the maker of Noxzema.
The Canadian Noxzema Inc. has gone that route, but Noxell is leery of it. The suntan lotion market, Schek said, "changes constantly, is too high-risk."
There are long-term factors at play in Noxell's earnings increase. Although the company may have put $22.5 million into its new Cockeysville plant, the production startup there eliminates the cost of having its powder put into compacts by another company. Temple estimates the plant will save the company about $2 million a year. About 92 percent of Noxell's products are now assembled in-house, Bunting said.
Now that it has had a taste of the chili market, Noxell is testing "picante" sauces. This research is in line with the company's interest in "specialty foods" such as chili. But as Lindsey said, "we like to try to stick close to our knitting. We're not big enough to compete with the big food companies."
Noxell also makes Lestoil, a heavy-duty household cleaner that competes with products like Top Job and Mr. Clean. Although Lestoil's sales growth is not dazzling, Schek said that the product is profitable and that Noxell has never thought seriously of selling it off.
Next year's calendar shows the introduction of Noxzema in a "pump" dispenser, which will be advertised on television by a woman weight-lifter with the slogan "For a beautiful body, you just pump, pump."
A new type of liquid make-up for "older women" in their upper-20s also will come out next year, followed by new shades of lipstick, nail colors and applicator products