Church & Dwight

Church & Dwight’s moat is primarily brand-based with scale benefits. Intangibles: multiple category leaders such as Trojan in U.S. condoms, Waterpik in power flossers, Batiste in dry shampoo, TheraBreath in mouthwash, and now Touchland in premium sanitizer. These brands command shelf space, consumer trust, and repeat purchase.

Evidence includes company statements of leadership and power-brand focus, plus product-specific leadership disclosures. Switching costs: low to moderate at the SKU level, but habitual use, outcomes (oral care, acne patches), and retailer planogram inertia create practical frictions. Network effects: negligible.

Cost advantages: scale in procurement, marketing, and an asset-light approach with targeted in-house capabilities and SPD bicarbonate backbone; benefits of long-running productivity programs show up in rising gross margin.

Efficient scale: CHD competes in niches where #1 or #2 positions and long retail relationships deter constant churn; the firm concentrates resources on seven to eight power brands that account for roughly 70 percent of sales and profits.

Key moat risks: aggressive global peers (P&G, Colgate, Reckitt, Kenvue), trade-down cycles, private label in vitamins and diagnostics, and retailer bargaining power, with Walmart at about 23 percent of 2023 net sales. The 2025 portfolio pruning and VMS divestiture reduce exposure to weaker categories, improving moat quality over time.