Monday, March 16, 2015

Procter & Gamble Banks on New Brands for Global Growth

While the U.S. represents about 35% of Procter & Gamble’s sales and over 40% of its profits, the company is looking to increase business around the world by leveraging an impressive product portfolio. Among those brands are three newcomers: Pampers Pants, Flexball and Always Discreet.

“The work we are doing to simplify and strengthen the portfolio will enable us to focus resources even more on the biggest opportunities in our core businesses in core countries and markets,” said Alan Lafley, Chairman, President and Chief Executive Officer. He outlined global prospects as part of an wide-ranging presentation in Boca Raton, Fla. at the annual conference of the Consumer Analyst Group of New York.

Lafley said P&G built Pampers into the leading baby diaper in the U.S. and in the world despite the absence of a consumer-preferred pant-style diaper. But the consumer products giant is now going to market with Pampers Pants, which he said provides exceptional dryness and skin comfort in an underwear-like design.

P&G just introduced Pampers Pants in Russia, and recently launched pants into China and Brazil. Plans call for launching into markets in Latin America and Asia later this year
“Initial Pampers Pants product test results in North America show a significant consumer preference versus the competition,” said Lafley. “Achieving fair share of the global diaper pant market represents up to a $2 billion sales growth opportunity for our company.”

In the grooming category, he is bullish for global sales of the “big obvious consumer preferred” Gillette FlexBall. P&G is now expanding the razor to Europe, Middle East, and Africa.
  
“We’re extending the Flexball product innovation to women with Venus Swirl, which began shipping in the U.S. this month. Women and men are telling us they significantly prefer these better performing products, and it looks like FlexBall and Swirl could be the biggest new shaving system innovations ever introduced by Gillette.”

P&G is accelerating the growth of the adult incontinence category with Always Discreet. In the U.S., the category growth rate is more than doubled to around 9%. Shipments to the U.K. began in July and to Canada and France in August. Always Discreet will launch in Germany, Switzerland, and Austria the first quarter of 2015.

“Our results have been improving in the U.S. market,” he said. “We are now growing share in about 60% of our sales, but there is still a lot of opportunity ahead. Growing the P&G U.S. business modestly ahead of market growth could improve the company’s top line by as much as $800 million.”

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