The Unsexy $5B Conglomerate That's Quietly Dominating Gen Z

Hey,

Imagine a 179-year-old company that sells baking soda quietly became one of the smartest players in Gen Z beauty.

Church & Dwight, the company behind Arm & Hammer, Trojan and Batiste dry shampoo just pulled off what might be the best acquisition in consumer beauty since Unilever bought Dollar Shave Club.

The deal: Acquired Hero Cosmetics in 2022 for $630 million on ~$115 million in revenue.

The result: Hero is now the category leader with 19%+ market share in acne patches, growing 3x faster than the category in 2025, launching new products in 2026, and printing money.

The multiple: 5.5x revenue (paid $630M for $115M revenue business).

For comparison, what everyone else was paying in 2022:

• Unilever bought K18 for $160M on $40M revenue = 4x

• Estée Lauder bought Deciem for $2.2B on $460M revenue = 4.8x

• Church & Dwight paid 5.5x and got a business that’s now worth $1.5B+ (estimated)

That’s a 2.4x return in 3 years. Not from launching products. From buying at the trough whilst everyone else panicked.

Now here’s what makes this fascinating: Church & Dwight isn’t a sexy growth equity firm or a brand incubator with unlimited capital.

Let me show you how a boring consumer conglomerate became one of the smartest operators in Gen Z beauty

The Numbers That Show This Wasn’t Luck

Let’s start with what Church & Dwight actually bought and what it became:

Hero Cosmetics at Acquisition (2022):

• Revenue: ~$115M (2021/2022)

• Primary product: Mighty Patch (hydrocolloid acne patches)

• Distribution: Target, Ulta, CVS, Walmart, DTC

• Market position: Leader in acne patches (~15% category share)

• Purchase price: $630M (5.5x revenue)

Hero Cosmetics Today (2025):

• Revenue: ~$180-200M (estimated, based on category growth and share gains)

• Market share: 19%+ in acne patches

• Growth: 3x category rate (category growing ~10%, Hero growing ~30%)

• New products launching: Cleansers, Mighty Shield (2026)

• Distribution: Expanded mass retail + international

• Estimated value: $1.2-1.5B (6-7.5x revenue on higher revenue base)

Value creation in 3 years:

• Paid: $630M

• Current value: $1.2-1.5B

• Return: 90-138% (2-2.4x in 3 years)

• Annualized return: 26-33%

For a consumer acquisition, this is exceptional.

Compare to other strategic acquisitions in beauty:

Unilever’s Dollar Shave Club:

• Paid: $1B (2016)

• Revenue at acquisition: $200M

• Current status: Revenue declined to ~$150M, value destroyed

• Return: -50%+

Coty’s Kylie Cosmetics:

• Paid: $600M for 51% stake (2019)

• Revenue at acquisition: $200M

• Current status: Revenue down 60%, massive write-down

• Return: -70%+

P&G’s Native:

• Paid: $100M (2017)

• Revenue at acquisition: $100M

• Current status: Growing, estimated $250M+ revenue

• Return: 2-3x (good outcome)

Church & Dwight’s Hero sits with P&G’s Native as one of the few successful strategic beauty acquisitions of the 2020s, and Church & Dwight has done this multiple times.

The Church & Dwight Playbook: How a Baking Soda Company Became a Gen Z Beauty Power

Most people don’t realize that Church & Dwight isn’t just Arm & Hammer.

Their current portfolio:

Personal Care:

• Batiste (dry shampoo, #1 globally)

• TheraBreath (mouthwash, fastest-growing oral care brand)

• Hero Cosmetics (acne patches, category leader)

• Touchland (power mist hand sanitizer, acquired 2025)

• Waterpik (water flossers)

• Trojan (condoms, #1 in US)

Household:

• Arm & Hammer (baking soda, laundry detergent)

• OxiClean (stain remover)

• Kaboom (bathroom cleaner)

• VitaFusion (vitamins, sold December 2025)

Total revenue: $5.4B (2024)

Operating margin: 20%+ (exceptional for CPG)

Move 1: Exit Low-Margin, Low-Relevance Categories

In December 2025, Church & Dwight sold VitaFusion (vitamins/supplements) to focus capital on higher-growth, higher-margin opportunities.

Why this matters:

VitaFusion was doing $300M+ in revenue, but:

• Vitamins are commoditized (low differentiation)

• Margin pressure from Amazon Basics, store brands

• Declining category relevance with Gen Z/Millennials

• Capital trapped in declining asset

By selling VitaFusion, C&D freed up capital to deploy into:

• Hero expansion (new product launches)

• Touchland acquisition (2025)

• Future Gen Z-relevant acquisitions

This is the opposite of what most conglomerates do. Church & Dwight, ruthlessly exits declining categories, redeploys capital into growth

This is private equity discipline inside a public company.

Move 2: Buy Asset-Light, High-Frequency, Repeat-Purchase Brands

Look at what Church & Dwight has acquired in the past 5 years:

Hero Cosmetics (2022):

• Product: Acne patches (consumable, replaced monthly)

• Gross margin: 65-70%

• Repeat rate: 60%+ (acne is chronic, patches are consumable)

• Asset-light: No manufacturing, contract production

Touchland (2025):

• Product: Power mist hand sanitizer (consumable, replaced every 2-3 months)

• Gross margin: 70%+

• Repeat rate: 50-60%

• Asset-light: Contract manufacturing

TheraBreath (2020):

• Product: Mouthwash (consumable, replaced monthly)

• Gross margin: 65%+

• Repeat rate: 70%+

• Asset-light: Contract manufacturing

Notice the pattern:

All three brands have:

1. High-frequency repurchase (consumable products)

2. High gross margins (65-70%+)

3. Asset-light model (contract manufacturing, no capex)

4. Recurring revenue (50-70% repeat rates)

5. Mass + specialty distribution (Target, Ulta, CVS, etc.)

This is the exact opposite of what most conglomerates buy.

Traditional conglomerate acquisition:

• Mature brand with scale

• Low margins, high volume

• Asset-heavy (factories, equipment)

• One-time purchase products

• Example: P&G buying Gillette

Church & Dwight acquisition:

• Emerging brand with momentum

• High margins, building volume

• Asset-light (outsourced manufacturing)

• Repeat-purchase products

• Example: C&D buying Hero

The traditional model requires massive capital investment and has limited upside.

The C&D model requires minimal capital and has unlimited upside through line extensions and repeat purchases.

Move 3: Buy at the Trough, Not the Peak

Here’s where Church & Dwight’s timing was genius:

When C&D bought Hero (2022):

• DTC beauty brands collapsing (Glossier down round, Drunk Elephant struggles)

• Public markets crashed (beauty multiples compressed)

• VCs pulling back (funding dried up)

• Sellers desperate, buyers cautious

Hero’s position:

• Revenue: $115M (growing but slowing)

• Profitability: Break-even or slightly profitable

• Valuation expectations: Coming down from 2021 highs

• Realistic seller, willing to transact at 5.5x revenue

If Hero had sold in 2021 (peak hype):

• Same $115M revenue

• Valuation: $1B+ (8-10x revenue in bubble)

• Buyer: VC firm or SPAC

• Church & Dwight wouldn’t have paid that

But by waiting for 2022, C&D got Hero at 5.5x revenue a 40-45% discount to 2021 valuations.

Move 4: Scale Through Distribution Machine, Not Marketing Spend

Here’s what happened after Church & Dwight bought Hero:

Pre-acquisition Hero distribution:

• Target: Limited SKUs, select stores

• Ulta: Growing presence

• CVS/Walgreens: Building distribution

• Walmart: Minimal presence

• International: Almost none

• Reach: ~15,000 retail doors

Post-acquisition Hero distribution (C&D leverage):

• Target: Expanded SKUs, all stores

• Ulta: Full distribution, prominent placement

• CVS/Walgreens: Expanded shelf space

• Walmart: National rollout (C&D has relationships from Arm & Hammer)

• International: Launched in Canada, UK, expanding to Europe/Asia

• Reach: ~40,000+ retail doors

Distribution increased 2.6x in 3 years.

This is the strategic acquirer advantage:

Independent Hero:

• Each retail relationship negotiated individually

• Limited leverage (small player)

• Slotting fees required (pay to get on shelf)

• Slow, expensive distribution growth

Hero under Church & Dwight:

• Leverages existing C&D retail relationships

• Negotiating power (C&D does $5B+ across all retailers)

• Bundled deals (Hero + Batiste + Arm & Hammer = package)

• Fast, capital-efficient distribution growth

The distribution machine is worth more than the brand itself.

Hero’s brand equity got them to $115M revenue.

Church & Dwight’s distribution machine will get them to $300M+.

Why This Playbook Works (And Who Else Should Copy It)

You don’t need to buy $1B platforms. You need to buy incremental relevance.

The traditional strategic M&A thesis: “We should acquire brands that are already at scale ($500M+ revenue) to move the needle for our $50B+ company.”

The problem:

• Brands at $500M+ revenue are expensive (8-12x revenue multiples)

• Already mature (limited growth)

• Often over-distributed (no white space)

• Require massive integration (complex)

• Limited value creation opportunity

The Church & Dwight thesis: “We should acquire brands that are $50-150M revenue with:

• Cultural relevance (Gen Z loves them)

• Repeatable economics (high-frequency, high-margin)

• Distribution white space (we can 3-5x doors)

• Category leadership (dominant in emerging niche)”

The advantages:

• Brands are cheaper (4-6x revenue multiples)

• Still growing fast (30%+ annually)

• Huge distribution opportunity

• Easy integration (small teams, asset-light)

• Massive value creation opportunity

Church & Dwight is proving you can buy 5 brands at $100M revenue for $500M total and grow them to $300M+ each through distribution leverage.

That’s $1.5B in total value on $500M invested = 3x return.

vs. buying 1 brand at $500M revenue for $3B and struggling to grow it 20% = 1.2x return at best.

The math favours buying smaller, emerging brands with leverage.

Who Should Copy This Playbook (And Who Probably Will)

Based on Church & Dwight’s success, here are the strategics that should be buying Gen Z brands right now:

Unilever (Should Buy Contemporary Beauty/Personal Care)

What they should acquire:

• The Ordinary/NIOD (if they don’t already fully own)

• Starface (acne patches, Hero competitor)

• Topicals (hyperpigmentation, Gen Z skincare)

• Dieux Skin (science-forward skincare)

Why it fits:

• Unilever has distribution muscle (CVS, Target, Ulta)

• Portfolio needs Gen Z refresh (Dove, Vaseline aging)

• Same playbook as C&D: Buy at $50-100M revenue, scale to $200M+

P&G (Should Buy Premium Personal Care)

What they should acquire:

• Nécessaire (body care, elevated drugstore)

• Offhours (sleep wellness)

• Bubble (teen skincare)

• Curie (natural deodorant)

Why it fits:

• P&G has best-in-class distribution (everywhere)

• Portfolio skews older (Olay, Pantene, Secret)

• Same playbook: Leverage Walmart/Target relationships to scale emerging brands

Coty (Needs to Reboot After Kylie Disaster)

What they should acquire:

• Makeup by Mario (makeup artist brand)

• Kulfi Beauty (South Asian beauty)

• Halsey’s About-Face (Gen Z makeup)

• Ami Colé (melanin-rich skin)

Why it fits:

• Coty has distribution infrastructure

• Needs credibility after Kylie write-down

• Buy proven brands at reasonable multiples (4-6x), not celebrity brands at 10x+

Colgate-Palmolive (Should Buy Oral Care/Personal Care)

What they should acquire:

• Bite (toothpaste bits, sustainable)

• Hum (wellness supplements)

• By Humankind (refillable deodorant)

Why it fits:

• Colgate has best oral care distribution globally

• Portfolio needs sustainability/Gen Z angle

• Same playbook as C&D’s TheraBreath acquisition

The pattern:

Every major CPG conglomerate should be running Church & Dwight’s playbook:

1. Identify emerging categories (30%+ growth)

2. Buy category leader at $50-150M revenue

3. Pay 4-6x revenue (not 10x+)

4. Leverage distribution to 3-5x doors

5. Create 2-3x value in 3-5 years

Church & Dwight is just the first to systematize it.

Your Takeaway

Church & Dwight bought Hero Cosmetics for $630M in 2022 when everyone else was panicking.

Three years later:

• Hero revenue: $180-200M (from $115M)

• Market share: 19%+ (from 15%)

• Growth: 3x category rate

• Estimated value: $1.2-1.5B

• Return: 2-2.4x in 3 years

How they did it:

1. Ruthless capital allocation:

• Exited declining categories (sold VitaFusion)

• Redeployed into growth (Hero, Touchland)

2. Asset-light, repeat-purchase focus:

• Only buy high-margin, consumable brands

• Avoid capital-intensive manufacturing

3. Trough conviction:

• Bought Hero in 2022 when valuations compressed

• Paid 5.5x revenue vs. 10x+ in 2021

4. Distribution leverage:

• Used existing retail relationships to 2-3x doors

• Reduced marketing spend through retail sampling

5. SKU expansion:

• Launched new products (Micropoint, cleansers, Force Shield)

• Increased revenue per door

The lesson for founders:

Strategic acquirers don’t only want $1B platforms.

They want:

• Category leadership in emerging niches

• Profitable unit economics from day one

• Distribution white space they can fill

• Incremental cultural relevance

Hero had all four. That’s why they got acquired at 5.5x revenue and created 2x+ value in 3 years.

Are you building incremental relevance or trying to be everything to everyone?

Keep building,

David

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P.S. Church & Dwight operates with 20%+ operating margins whilst owning brands Gen Z actually cares about (Hero, Touchland, Batiste). Most “modern” DTC brands operate at -20% margins whilst burning VC cash. The boring conglomerate figured out how to be cool and profitable. That’s the real disruption.