Corporations, Taboos, and Unintended Consequences

Reuben is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Some investors bristle at the mention of alcohol, gambling, and guns, but very few ever even start a conversation about human sexuality. For whatever reason the United States has long held sexuality as a taboo topic. Although the sexual revolution brought about by the Baby Boomers loosened the reins a bit, it didn't change the general theme. That said, sex is a big issue and corporate America is involved in some interesting ways.

Bikinis
According to Bloomberg news, more than 80% of U.S. college students remove all or some of their pubic hair. A big part of that is to remove pubic hair around bikini lines. Many just take it all off. Remember Nair's its itty bitty bikini ads? But it seems that women aren't the only ones, since 80% of the college population includes men.

Catering to those who wish to remove some unwanted hair comes in many forms, from a trip to the salon and a wax job to the grocery isle. Procter & Gamble (NYSE: PG) even has an entire web page devoted to “female hair removal options,” from razors to cremes. The website is a good idea since very few people talk about hair removal outside of family and very close friends.

While Procter & Gamble has many other products in its stable, it clearly sees this nearly $5 billion market, according to Euromonitor International, as worth additional development. For example, it inked a five year deal to sell a hair removal device created by CyDen in early 2012 and has extended the reach of some of its other brands into hair removal, as well, though not necessarily for “sensitive” regions.

Other companies with a notable position in the hair removal market are Energizer Holdings (ENR) and Great Britain’s Reckitt Benckiser Group, which sells Veet.

Baby Boomers
Another interesting twist of fate is the aging of the Baby Boomers. We all know that this age cohort has changed just about everything about society as we know it. Now they have taken on one area a second time. The sexual revolution, at least the first one, was about opening up to the topic. The next frontier, the second sexual revolution, is going to be about changing the perception of the top as it relates to aging.

While pregnancy has typically been the number one concern related to sex, after a certain age, it isn't as concerning. So protection from sexually transmitted diseases will likely wind up being the bigger sales push. This is a golden opportunity for a company like Church & Dwight (NYSE: CHD), which sells Trojan condoms.

The company has taken the Trojan brand mainstream, with television advertisements and brand extensions (personal lubricants and adult “toys”). Sure, the company's other businesses, like the Arm & Hammer brand, may get more attention, but sexually active adults are a prime market. The company's new “date night” kit, complete with a restaurant gift card, is a nice start. By the way, Church & Dwight also sells Nair hair removal products, making it a double whammy on this topic.

A Livable Disease and Warts
One disease that's having a sad resurgence is HIV. Once seen as a death sentence, many now see it as a livable disease. While this is a shame, it creates an unfortunate opportunity for some companies. Indeed, as people change their view of HIV, it will create a population that is an annuity like revenue stream for companies selling drugs to treat the disease. This includes such household names as Merck (NYSE: MRK), Bristol-Myers Squibb (BMY), and Pfizer (PFE).

More positively, vaccinations are helping to eradicate genital warts. While in and of themselves, warts aren't deadly, they increase the likelihood of cervical cancer, among others, which can be deadly and make having children more difficult. So when Merck introduced Gardasil, which vaccinates against two of the most virulent causes of genital warts and cancer, it was a blessing for women and men alike.

Although the sexual nature of the product made it something of a public relations nightmare, the benefits are so great that medicine outweighed social stigma. With the heavy social lifting done, a second vaccine, called Cervarix, has been introduced GlaxoSmithKline (GSK). Although not the number one business for either firm, it is an important one on a social level and the companies should see solid results for years to come. Perhaps they should test the vaccine on seniors, as well.

Taboo Topics
Alcohol, gambling, and guns are the typical areas avoided by socially conscious investors. Human sexuality doesn't seem like it belongs in that grouping, but, somehow, the topic finds itself avoided as if it should be. That's a shame because there's money to be made for those willing to break down a few barriers.

Yours,

 


ReubenGBrewer has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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