Tide Pods seem to be very good for Procter & Gamble, but some observers believe they're killing the rest of the detergent industry.
Naturally, P&G seems quite happy with how the pre-measured Pods are gobbling up market share in the U.S. detergent business, with expected fiscal-year sales of $500 million this year meaning that Tide Pods are well on their way to becoming yet another of the dozens of $1-billion-plus brands in the CPG giant's portfolio.
Moreover, this is a segment that P&G invented, as AP has noted, taking "eight years, 450 product sketches, 6,000 consumer tests and hundreds of millions of dollars." Despite imitators, Tide essentially has the category all to itself so far, with a market share of about 75 percent of unit doses, drawing customers from rivals without the technology. No wonder P&G plans to take Pods to Europe in the coming months.
It's also no wonder that P&G CEO Bob McDonald likes to wax about Tide Pods, which represent "the ultimate perfect dose" of laundry detergent, as he told the Wall Street Journal.
And therein lies the problem, at least if you're a P&G competitor. Total U.S. sales of laundry detergents fell by more than 2 percent in the 12 months ending in March, according to Nielsen per the Journal, and are down more than 5 percent in dollar terms compared with the pre-pod era three years ago.
The reason, analysts have concluded, is that the carefully measured pods keep consumers from overdosing compared with conventional liquid and powder detergents that many pour in excess into their laundry loads. "Pod is killing the laundry detergent category," said James Craigie, CEO of Church & Dwight, which sells low-price detergents under the Arm & Hammer and Xtra brands, at an industry conference in February, according to the newspaper.
The previous major innovation in the category, concentrated detergents, actually boosted sales as American consumers persisted in over-dosing their loads despite the fact that they could effectively use less of the more expensive stuff.
Of course, if you're not competing against P&G in detergents, there are plenty of reasons to like pods. Presumably they're an environmental plus and they offer convenience factors such as being portable for away-from-home laundry.
However, P&G is still having trouble with the issue of toddlers mistaking brightly colored pods, in their transparent container, for candy; ingesting them and getting sick enough for the emergency room.
Part of P&G's response has been to help establish a Safe Home consumer-education campaign (including the laundry safety video below) with the American Academy of Pediatrics to help kids avoid household cleaners, and over-the-lid resealable stickers to child-proof Tide Pods tubs.