Benjamin Moore and the promise to the corner paint store
A paint maker founded in Brooklyn in 1883 sold through independent dealers, and after Warren Buffett vowed to keep it that way, its own chief executive nearly broke the pledge.
Montvale, NJ
Twice, early in Berkshire Hathaway’s ownership of Benjamin Moore, Robert Nardelli asked Warren Buffett to breakfast. Nardelli was running Home Depot at the time, and both men sat on the Coca-Cola board. The breakfasts were set for around 5:30 in the morning, before the Coke meetings. Each time, Nardelli pitched the same idea: sell Benjamin Moore paint through Home Depot.
Buffett turned him down. “I promised our dealers we wouldn’t do it, so that was the end,” he told Fortune in 2014. He said he kept telling Nardelli as much, and he put it plainly to the magazine: “That promise was sacred.”
The promise was older than Buffett’s ownership. Benjamin Moore had sold its paint through independent retailers since its first year in Brooklyn, in 1883. Owned by Berkshire Hathaway since 2000, the company is now a large manufacturer with operations across the United States and Canada. Its history keeps returning to something smaller: the arrangement between a paint maker and the hardware and decorating stores that sell its cans. That arrangement nearly came apart once.
Benjamin Moore was born in 1855 in Ballybay, in County Monaghan, Ireland, and came to New York in 1872. He worked in the paint business. In 1883 he and a brother opened Moore Brothers with about $2,000 and a single product, Moore’s Prepared Calsom Finish. Accounts differ on the first partner. One has William Moore starting out with Benjamin and leaving soon after, with a third brother, Robert, taking his place. The history published by the company’s British arm names Robert from the start.
According to that history, the brothers opened at 55 Atlantic Avenue in Brooklyn, and the building burned down within a year. They moved to a new location and were back in business three days later. The same history credits Benjamin Moore with a working creed, “The exercise of intelligent industry in the spirit of integrity.” The brothers incorporated in New York in 1889 and soon after in New Jersey, where the company is still based.
From the start the Moores aimed high on price. Their slogan, according to a company history published by Gale, was “quality, start to finish.” Other paint makers claimed comparable quality, but the Moores were willing to risk market share to charge premium prices for premium paint. They were just as particular about how the paint reached customers. A paint maker can make house brands for retailers, sell its own label through hardware stores and home centers, or run its own shops, and most did some combination. Benjamin Moore certified specific dealers and sold only through them.
The business crossed into Canada, establishing Benjamin Moore & Co., Limited, in 1906. A year later it hired its first chemist and started a research department. In 1917 Benjamin Moore stepped down at 62 and named his nephew, L.P. Moore, to succeed him. Until Berkshire bought it, Fortune later reported, the company had usually been run by a Moore descendant.
Much of the company’s craft history happened at the dealer’s counter, where a customer hands over a chip or a scrap and asks for a match. Dealers once worked from Benjamin Moore’s Moor-O-Matic system, which relied on charts, gradation sheets and a good measure of eye expertise to match up to 1,600 colors to particular projects.
In the early 1980s the company handed that job to a machine. Working with Digital Equipment Corp. over seven years, Benjamin Moore built a system that paired a spectrophotometer with a minicomputer running color-matching software tuned to its own paints. The system analyzed a sample and returned a formula: the base, plus the exact colorants and amounts needed to match it. The company counts its 1982 computer color matching as an industry first, one that let retailers match nearly any sample instead of limiting customers to the chips on the rack. It could not match certain intense or fluorescent colors beyond the range of paint pigment.
To bring the system within reach of dealers’ budgets, Benjamin Moore offered financing in 1985: a 10 percent deposit and four years to pay the rest. Maurice Workman, then the company’s president, told the Business Journal of New Jersey that year that the computers were not a moneymaker for the company. They were meant to help its dealers sell more paint.
The company found other ways to reach people through those stores. From the 1930s to the 1960s, a character named Betty Moore, played by a series of actresses, gave decorating advice over the radio. In 1957 the company introduced Regal Wall Satin, a water-based latex that was easier for homeowners to apply. For the Bicentennial in 1976, it worked with the National Park Service on a Historic Colors Collection drawn from the park service’s archives and historic house sites.
Inside the company, people stayed. Employees spent decades there, and managers came up from within. “It was just like an extended family,” Workman told Fortune in 2014. The relationship with dealers ran the same way. They did not sign contracts with the company. It was a handshake arrangement.
Berkshire Hathaway bought the company in 2000. Buffett knew outside ownership would unsettle a company used to Moore family leadership, and the dealers had a particular worry: that the new owner would decide there was more money in selling through their bitter rivals, Home Depot and Lowe’s. Soon after the deal, Buffett appeared in a video sent to the company’s dealers. He told them Berkshire bought businesses to keep, not to resell. He said he knew nothing about making paint, and his plan was to stay out of the way and let the company run itself.
“I made them a promise that we would forever stick with the dealer system,” Buffett told Fortune in 2014, calling the dealers the “lifeblood” of the operation.
The hands-off approach left room for the company to drift. Denis Abrams became chief executive in 2007. He had joined Benjamin Moore 12 years earlier, when it bought his family’s technical coatings company. A native of South Africa with a doctorate in chemical engineering, he had already cut the company’s factory count from 18 to eight and hired a group of Ph.D. chemists to develop more environmentally friendly paints.
Abrams thought the dealer-only approach was holding the company back. The big chains were selling more and more paint. By 2014, according to an analyst at the research firm Orr & Boss cited by Fortune, independent dealers sold 16 percent of all house paint, down from 25 percent in 2003. A person familiar with Abrams’s thinking said he believed the big boxes could introduce new customers to the brand, who would then buy from Benjamin Moore stores. Several former executives thought the strategy was sound.
In 2010 the company opened an online paint store. Dealers responded with angry calls and a petition. Partly because of that, the company changed the setup so that customers ordered online and picked up their paint from a dealer. In 2012 Benjamin Moore began selling through the 87 outlets of Orchard Supply Hardware. By that year, Fortune reported, the company was nearing a deal to sell through Lowe’s.
Buffett heard about it and stopped it. The dealers revolted anyway. When Fortune looked at the company two years later, it was on its third chief executive in two years and still working to win back the trust of its 4,200 dealers. Buffett did not dress it up. “Sherwin Williams has done a better job,” he told the magazine.
The company says the stores that carry its paint are independently owned, not franchises, and pay Benjamin Moore no fees or royalties. When the brand launched in Britain in 2015, it went through a distribution partner, Shaw Paints, founded by Craig and Helen Shaw. In 2020 Benjamin Moore bought the business, which became Benjamin Moore U.K. and kept supplying a network of authorized dealers there. Dan Calkins, then chairman and chief executive, announced the deal.
The online store still works the way the dealers pushed for in 2010. A customer can order paint on the company’s website, but the can does not come to the house. It goes to a local paint store the customer picks, and the customer goes there to get it.