Posted by Dale Buss on October 16, 2014 01:18 PM
At Procter & Gamble's annual shareholder meeting this week in Cincinnati, CEO A.J. Lafley touted the progress he has made during his second tenure as chief, noting that the company "met our basic business and financial objectives for fiscal 2014," including 3 percent growth in "organic" sales, in line with the market, and 5-percent growth in "core" earnings per share.
But there remained a lot to keep Lafley on the defensive, from the progress of his crucial strategic plan to spin off or shutter low-performing P&G brands, to stock-market gyrations, to overall feelings of economic unease in America and abroad that were illustrated—once again—by the September report of falling US retail sales.
"There is no doubt that we are in a stretch of volatile and uncertain political and economic times ... [and] a period of economic slowdown around the world," Lafley acknowledged in answering shareholders' questions, but "we're doing our best to manage through it and to continue to deliver the brands and products consumers want and need around the world."Continue reading...
Posted by Sheila Shayon on September 19, 2014 04:04 PM
Microbeads are part of many American's morning hygiene rituals, but what consumers may not know is that those very beads are, made of polypropylene or polyethylene, widely used in plastic shopping bags, are harming wildlife and are polluting food systems and waterways.
Washed down bathroom drains, the beads, which don't dissolve, evade treatment plant filters and absorb toxins from pollutants like pesticides, oil and flame-retardants causing toxic run-off into large bodies of water like the Great Lakes, which contain 20 percent of the world's surface fresh water.
L’Oreal and Procter & Gamble both market products with microbeads and two Colgate brands, Max Clean and Max Clean Smart Foam, also contain them. Now, Procter & Gamble, maker of Crest, has pledged to eliminate microbeads from its toothpastes Pro Health and 3D White lines by March 2016.
"While the ingredient in question is completely safe, approved for use in foods by the FDA, and part of an enjoyable brushing experience for millions of consumers with no issues, we understand there is a growing preference for us to remove this ingredient. So we will," the company said in a statement.Continue reading...
Posted by Sheila Shayon on September 18, 2014 03:57 PM
Steadfast retailing rivals Target and Walmart came together earlier this month under one uniting topic: sustainability. The pair co-hosted the Beauty and Personal Care Products Sustainability Summit in Chicago alongside Forum for the Future to help "improve sustainability performance in the personal care and beauty industry."
"We think it's the right time to have a discussion" and come to a collaborative point of view, said Christina Hennington, Target's SVP of health and beauty, the Chicago Tribune reported, adding the demand for such products over the last five years "has been staggering," but, "it's a complicated value chain."
Target has seen a 20-percent growth in natural and organic products, which 97 percent of its shoppers purchase in some form or another. Walmart, meanwhile, created a sustainability index for hundreds of product categories and has pushed its suppliers to eliminate or reduce 10 toxic chemicals from beauty products, household cleaners and cosmetics. Similar commitments have been made by Avon and Procter & Gamble.
“We need to move faster toward that goal because the expectations are changing,” said Rob Kaplan, Walmart’s director of product sustainability. “We’re looking for our suppliers to demonstrate voluntary leadership and to make commitments and to move from a conversation to action.”Continue reading...
Posted by Dale Buss on August 19, 2014 04:39 PM
The first time around running Procter & Gamble, CEO A.G. Lafley was in an expansionary mindset that prompted the CPG giant to acquire Gillette, swoop up and deploy outside innovations such as the Crest Spinbrush, and beef up brand after brand and market after market to transform the company into a global consumer-good marketing juggernaut.
Not so much this time around. In his second turn as chief, Lafley is addressing questions about P&G's business model that are just as fundamental as during his first tenure. But the answers he's been coming up with are much less pleasant, as he forges a strategy based on cutting costs, reorganizing operations and shedding many of the 100 underperforming brands that he's currently reviewing as he tries to re-energize a company beaten down by the slow-growth economy and challenged as never before by CPG rivals. His idea is to turn fewer, better-performing brands into greater growth engines for the company.
News of possible gambits for Lafley, quite naturally, have been popping up since he announced the strategy earlier this month. Braun shavers—which just returned to TV thanks to a new partnership with the NFL—and Duracell batteries are the two largest assets likely to be divested, Reuters reported based on sources. Cheer and Era laundry detergent brands may also end up on the chopping block, the Wall Street Journal reported. Continue reading...
Posted by Sheila Shayon on August 5, 2014 07:54 PM
Subscription services are all the rage these days, and no wonder why: "You can acquire a customer once and potentially keep him for life as long as you provide a service or product that he wants and values," said Alex Zhardanovsky, co-founder PetFlow.com, which calls the retail model "the holy grail."
More recent subscription success stories include Dollar Shave Club and HelloFlo, both of which found a niche and have rocketed to success. With affordable, quality products and a rocking brand story to match, it's no secret why the startups have found immense success in the overcrowded personal care industry.
Interestingly, HelloFlo, which was bootstrapped by former American Express marketing director Naama Bloom, partners with P&G to supply feminine products—the same CPG giant that Dollar Shave Club is challenging with its low-cost, high-quality razors. On track to make $60 million in sales in 2014, Dollar Shave Club accounts for 6 percent of the US razor cartridge market, according to AdAge, and it only has plans to expand.Continue reading...
Posted by Dale Buss on August 1, 2014 01:07 PM
Procter & Gamble CEO A.G. Lafley finally took the biggest step of his second tenure in reshaping the company for the future, announcing that P&G plans to cut more than half of its brands globally as it restructures to focus on its top 70 to 80 brands.
That means the company will be divesting, discontinuing or merging about 100 of its existing brands over the next year or two. While they account for more than $8 billion in sales annually, these sleepy brands have seen sales declining by 3 percent and profits declining by 16 percent on average, Lafley told investors, and have margins less than half the company average.
Meanwhile, P&G’s “keepers” include iconic brands such as Tide and Pampers that have accounted for 90 percent of company sales and 95 percent of profits over the past three years. Most of these brands are leaders in their industries or categories; 23 have sales of $1 billion to $10 billion a year, and most of the remainder have sales of $100 million to $500 million.Continue reading...
Posted by Sheila Shayon on July 25, 2014 05:33 PM
As consumer demand for greater transparency by brands increases, companies are stepping up their commitment to sustainability.
Procter & Gamble is partnering with the Malaysia Institute for Supply Chain Innovation to help small farmers improve their palm oil and palm kernel oil production as part of its zero deforestation goals set in April after the consumer packaged-goods company was targeted by Greenpeace.
“We already work with larger suppliers to trace the origin of our supply chain, but small farmers—in places like Malaysia and Indonesia—account for 35 to 45 percent of palm oil production,” said Len Sauers, VP P&G Sustainability.
But brands aren't the only ones having to make decisions with sustainability in mind. New tools and online tracking technologies aim to help better understand consumer behavior with respect to sustainability such as supercookies, browser fingerprinting, location-based identifiers and behavioral tracking.Continue reading...
Posted by Dale Buss on July 3, 2014 11:51 AM
One of the most influential marketers in the world, Procter & Gamble, executed a big shift in its organization this week. On July 1st, its entire marketing function relaunched as “Brand Management” in a sweeping reorganization that gives a broader purview for brand-centric marketing and thinking.
The move comes as P&G's former CEO, Bob McDonald, is in the news after President Obama nominated to him to take over and make over the troubled Veterans Administration.
With P&G now led (again) by A.G. Lafley, the company's brand-led restructuring, announced by the company in February, is aimed at creating “single-point responsibility for the strategies, plans and results for (each) brand,” a spokesperson told Ad Age.
The shift away from "marketing" towards "brand" changes titles and locks down broader responsibilities for hundreds of marketing directors and associate marketing directors at the world’s biggest advertising spender, now officially brand directors and associate brand directors. Eliminating "marketing" from titles doesn't mean marketing is a thing of the past, however.Continue reading...