In 1884, having developed Lever and Company to a point where it was virtually self-governing, William resolved to capture a large share of the international soap trade. In essence, he planned to manufacture and market a range of high quality, price differentiated products, using a strategy based upon his experiences with butter and other commodity products. Thus, instead of selling soap by weight, he had it cut into small, manageable tablets which were individually wrapped. The Trade Mark Registration Act 1875 protected trade names from counterfeiters and imitators, and this opened the way for brand name recognition and consumer loyalty. Within 12 months, Lever had registered a series of trade marks, among them
Sunlight, a house style that was later applied to a range of household soaps. The Lever soap campaign began with a range of Sunlight branded soaps differentiated mainly by colour: Pale, Mottled and Brown, with a fourth variant presented as a product that was especially formulated for washing clothes. This 'Sunlight Self-Washer Soap' was widely advertised using billboards and posters located at public places throughout northern England. But at that time, Lever had to rely for supplies on "soap-boilers" – independent firms that specialised in producing soap to order – who were expected to work to his proprietary formula. The reliability of these suppliers was however apparently questionable, as variations in the end product gave rise to complaints about the effectiveness, and even the smell, of Self-Washer. After much consideration, William began to consider the possibility of taking control of the manufacture, and thus the quality, of Sunlight soaps. He had discovered a small producer based in
Warrington that badly needed to increase its output in order to become profitable and although Lever could probably have solved its problem though placing orders for most of his soap, he clearly wanted complete control. Having persuaded his father and younger brother that it would be a beneficial strategy, William raised sufficient capital for the takeover to take place and in August 1885 Lever and Company, wholesale grocers, added soap manufacturing to its range of activities. The success of the Sunlight brand, especially after Lever assumed full responsibility for the product's quality, was exceptional; so much so that by the end of 1887 it had become impossible to squeeze any more capacity from the Warrington plant. Having failed to either extend the site or find more space in the areas, Lever eventually decided to move the whole manufacturing facility to an green-field site near
Birkenhead.
Port Sunlight Lever was the founder of '
Port Sunlight'. In 1887, Lever bought of land on the
Wirral in
Cheshire between the
River Mersey and the railway line at
Bebington. This site became Port Sunlight where he built his works and a
model village to house its employees. From 1888, Port Sunlight village offered decent living conditions in the belief that good housing would ensure a healthy and happy workforce. The community was designed to house and support the workers. Life in Port Sunlight included intrusive rules and implied mandatory participation in activities. The
tied cottages meant that a worker losing his or her job could be almost simultaneously evicted. In some matters, Lever was keen to allow the residents of Port Sunlight a degree of democratic control, and this seems to have led to a common conviction that he was in favour of
women's suffrage: a belief that possibly stems from a situation arising in connection the Bridge Inn, a Port Sunlight temperance "pub" that was opened in 1900. Lever was a lifelong teetotaller, and he naturally assumed that the Bridge would be "dry". Within two years of its opening, however, representations were made to change its status to a licensed house. Lever promptly announced that he would not impose his own views, and that the issue would be decided by a referendum; insisting somewhat unconventionally for that time that women would take part. With the added proviso that the Bridge would only become a true British "pub" if a supermajority of 75% was in favour, Lever probably felt confident that the outcome would support his abstemious sentiments, but in the event more than 80% voted for an alcohol licence and even though some people petitioned Lever urging him to use his absolute authority in Port Sunlight and ignore the referendum, he refused to do so. In reality, workers' social lives were policed from the head office, and some of Lever's employees clearly resented his paternalism. However well intentioned, the power it afforded the company, even though it was rarely exercised, was viewed as an attack on workers' liberty and human rights. Although many such people preferred to find their own accommodation, there were others who, for whatever reason, were never given an opportunity to reside in Port Sunlight. Perhaps Lever's observations on this matter are revealing:
Advertising It is clear that skilful advertising and favourable publicity were major positive factors in the early success of Lever's enterprise. Much of the Sunlight brand "message" focussed on the alleviation of drudgery in the lives of working class housewives, targeted no doubt because of the increased spending power and improved education of that large section of the British population, the skilled workers. For inspiration, Lever turned to the United States and he seems to have had no reservations in adopting American methods in Above The Line (ATL) and Below The Line (BTL) advertising. One subtle proposition introduced from America was designed to persuade women that the toil of housework was responsible for an accelerated aging process, and that Sunlight Soap offered a form of liberation. This, and other similarly cautionary messages, were posted on hoardings and on the sides of buses together with pictures that underscored the slogans. Promotional literature, in the form of instructions about the best ways of using the company's products, was widely distributed, as well as allegorical accounts of their successful adoption by stylish – and totally fictional – upper-class ladies. One of the more remarkable Below The Line projects was the
Sunlight Year Book, which was a type of almanac first introduced in 1895. These were quite substantial (the 1899 version had 480 pages) publications which evolved into a hard-backed and 'Profusely Illustrated' volume, described by the publisher as: These books were distributed widely, and many were given to the head teachers of schools, causing protests from members of the
Soap Makers Association. Other schemes adopted from the USA included competitions with cash prizes, coupons and tokens included in soap packaging, and sponsorship of worthy causes such as a lifeboat named Sunlight. The success of these schemes soon led to their adoption by Lever's competitors, although they eventually became difficult to sustain as raw material costs began to increase during the first decade of the twentieth-century, inducing most soap makers to phase them out. Lever's desire to directly influence the consumer led to the employment of "District Agents" whose tasks involved engaging directly with members of the public in order to advance the merits of the company's products, as well as to act as undercover agents who reported on anything they observed that could be useful to Port Sunlight. The success of this aspect of Lever's marketing strategy led to the first overseas manufacturing plant being established in Switzerland. 'Savonneries Helvetia' was the inspiration of the somewhat charismatic
François-Henri Lavanchy-Clarke, Lever's District Agent in Switzerland who used the fledgling cinema industry as an advertising tool. The success of this venture led, by 1900, to the establishment of factories in Switzerland, Germany, Canada, the United States, Holland, and Australia with several others planned, while the Sunlight brand had been strengthened by the addition of Lifebuoy, Vim and Lux.
Soap combine By 1905, many of the raw materials used in the manufacture of soap were being used by makers of
margarine and other new products, and in early 1906 it was clear that this increased demand was not temporary, and prices rose sharply. Concern in the soap-making industry was widespread and, in some cases, acute, competition became fierce, leading to increases in advertising expenses which served only to exacerbate an already critical situation. Lever himself considered, and then rejected, some rather drastic alterations to the Sunlight formula; eventually deciding on reducing the weight of the standard bar. In July 1906 he was asked to attend a meeting in Liverpool, called by a group of soap-makers based in the north of England. The result was an accord to put in motion changes that would effectively cartelise the industry by stifling competition and controlling prices to the consumer. Lever attempted to rationalise the formation of the Soap Trust by claiming that the industry would become more efficient, thus making cost savings that could be passed on to the consumer; assertions that could never be realised. Financial manoeuvres made by Lever were designed to maximise the Lever Brothers position within the cartel included takeovers and share issues, but as more people became aware of their plans, it was inevitable that information would be leaked to the press. Nevertheless, retrenchments were set in motion, including the cancellation of several substantial press advertising campaigns. By October, several newspapers were publishing articles about the Soap Trust, and some began to represent Lever as the leading character in an infamous conspiracy. Headlines in the
Daily Mail,
Daily Mirror, and
Evening News proclaimed: "Soap Trust Arithmetic – How 15 ounces make a pound", "Dismissal of employees begins", and "Trust Soap Already Dearer". Other allegations included claims that the Trust was trying to control the available supplies of raw materials and that it was preparing to use 'unsavoury substances' in its soaps. Port Sunlight, parodied as 'Port Moonshine', was portrayed as a sweatshop, reports by disgruntled retailers were given prominent positions and readers were urged to buy products made by non-Trust manufacturers.
Lord Northcliffe took a personal interest in the anti-Soap Trust campaign. While extending assurances of "the strictest impartiality" to Lever, Northcliffe's close friendship with
Theodore Roosevelt revealed his support for the American's activities as a 'trustbuster'. Roosevelt's investigations of dishonest dealings among many American companies had been fully reported in Britain, eliciting a pious chorus of disapproval and claims that any similar wrongdoing by British firms would be unimaginable but Northcliffe, pointing to the existence of a British Tobacco Trust, was not convinced. He set in motion a campaign of investigative journalism, some of which seems to have verged upon persecution; the clear objective of which was to smash Lever's soap combine. The campaign had a surprisingly rapid and strikingly negative impact on the member companies, particularly on Lever Brothers' businesses. By November 1906, Lever sales had fallen by sixty per cent compared with the previous year and Lever Brothers shares had lost around twenty-five per cent of their value; other members of the Combine experienced similarly devastating declines. Such conditions inevitably led to a reassessment of the position and, following a meeting of all firms involved in the alliance, but without the wholehearted approval of Lever himself, a decision was made to bring the organization to an end. Most of the members of the failed cartel found their reputations seriously tarnished, and none escaped financial damage; Lever estimated his losses at "considerably over half a million". For Northcliffe, this was clearly a victory of liberty over iniquity, a view reflected in the
Daily Mails headline, "Public Opinion Smashed the Soap Trust".
Daily Mail libel case Perhaps naturally, Lever felt that the failure of the soap combine was the result of animosity and resentment directed at him personally, rather than as a consequence of its members' dishonesty. Having sought several opinions on the authority of his suit, he retained
Sir Edward Carson and two juniors, one of whom was
Frederick Edwin Smith, later
Lord Birkenhead. For the defendants,
Rufus Isaacs, later
Marquess of Reading and
Viceroy of India, assisted by another K.C. and two juniors, acted for
Associated Newspapers Ltd. Lever's legal team were in no doubt of the outcome; as F.E. Smith reportedly observed "There is no answer to this action for libel and the damages must be enormous." On 15 July 1907 the case came up at Liverpool before Mr Justice Lawrence. The circumstances in which the trial took place were unusual in that, while Lever's legal team were accommodated at
Thornton Manor, Lord Northcliffe, the principal witness for the defence, was overseas and, according to Jolly, "had no intention of returning within range of any writ server while the case was on." It seems clear, therefore, that Northcliffe was in the wrong and, moreover, he knew that he would most probably lose the case: he reportedly offered Lever a public apology shortly before the start of the trial. For the plaintiff, Carson accused
Associated Newspapers of conducting a malicious campaign "with the object of smashing up Lever Brothers". Speaking for more than five hours, he listed a number of complaints and asked the jury to award punitive damages. He then called Lever as his first witness, inviting the leader of the defence team to "cross-examine him to his heart's content, and, when his time comes, I hope he will be able to follow my example and do the same, and call as his first witness his own client, Lord Northcliffe..." Such was the impression of Lever's demeanour and testimony on the defence team that, as soon as the court was assembled on the following day, they capitulated completely. They also stated that, on behalf of their clients that they wished to retract completely "every imputation made upon Mr Lever's honour and integrity" and express their deepest regrets for having made such malicious attacks upon him. There followed a scene on the floor of the court wherein the legal teams literally haggled over the size of the financial settlement. In the end, the sum agreed to was £50,000, plus around £40,000 which was eventually awarded from individual newspapers. This victory was celebrated with a day's holiday at Port Sunlight, where Lever blithely addressed the employees and other spectators who cheered and applauded their hero. Lever Brothers had indeed been seriously damaged by the press, as well as by rises in the costs of raw materials, but Lever hesitated to use the court awarded cash to bolster the company. Instead, he presented it all to
Liverpool University, bestowing significant sums to the faculties of Town Planning, Tropical Medicine, and Russian Studies, while making sure that an enduring record of the litigation was ensconced in the University library. == Africa ==