1. Procter & Gamble
Cincinnati, OH
www.pg.com
Beauty Sales: $27.8 billion (includes beauty products and grooming)
Corporate Sales: $83.5 billion for the fiscal year ended June 30, 2008

Key Personnel Corporate: A.G. Lafley, chairman of the board and chief executive officer; Susan E. Arnold, president-global business units; Robert A. McDonald, chief operating officer; Clayton C. Daley, Jr., vice chairman and chief financial officer.

Key Personnel Beauty: Edward D. Shirley, vice chairman-global beauty and grooming; Charles V. Bergh, group president-global personal care; Christopher de Lapuente, group president, global hair care; Juan Pedro Hernandez, president-Braun; Virginia C. Drosos, president-global personal beauty; Robert Jongstra, president-global professional care; Hartwig Langer, president-global prestige products.

P&G offers a dizzying array of top-selling beauty brands, including eight that each reach $1 billion a year in sales.

Products/Brands: Cosmetics, fragrances, hair care, antiperspirants and skin/beauty care marketed under such brands as Pantene, Olay, Head & Shoulders, Wella, Cover Girl, Clairol Herbal Essences, Max Factor, Hugo Boss, Secret, SK-II, Zest, Safeguard, Vidal Sassoon, Clairol Nice ’n Easy, Old Spice, Ivory, Sure. Personal grooming products include Gillette Braun and Fusion.

New Products: Olay Definity Color Recapture Moisturizers, Clairol Perfect 10 At-Home Hair Color, Cover Girl Lash Blast Mascara, Gillette Hair Care Line for Men, Pantene Beautiful Lengths Shampoo and Conditioner, Head & Shoulders reformulated lineup with new packaging and Sebastian Professional Hair Care reformulated lineup with new packaging.

Comments: Innovate and grow! If there’s one word, Procter & Gamble would use to describe itself, it would likely be innovation. P&G reports that sales growth in fiscal 2008 came from a diverse mix of businesses and was driven primarily by innovation. Fiscal 2008 was P&G’s seventh consecutive year of organic sales growth at or ahead of its long-term target range, and according to company CEO A.G. Lafley, brand and new product innovations, particularly in developing markets, accounted for virtually all of it. Despite the wavering economy, rising energy and commodity costs, corporate sales rose $7.5 billion over last year’s figures. For the fiscal year ended June 30, 2008, P&G reported net sales of $83.5 billion. Fourth-quarter profits surged 33%, with sales continuing to meet P&G’s goals of 4-6% growth per year.
  
Integral to P&G’s growth plan is to accelerate growth in developing markets and among low-income consumers. This proved successful with developing market sales up 18% per year and more than one-third of total company sales growth coming from developing markets. P&G claims to have produced five of the 10 best-selling new products in 2008, including the new Herbal Essences line of products and Olay Definity skin care products. Growth was broad-based across all geographic regions, with mid-single-digit sales growth in developed markets and double-digit sales growth in developing markets.
  
P&G implemented a change in corporate structure, redefining its global business units. The beauty division now incorporates personal grooming, accounting for the huge leap in comparable sales over last year’s figures. Beauty accounted for 33% of 2008 net sales. A portion of the growth was due to the removal of feminine care from the category and the addition of grooming by way of Gillette. Beauty products accounted for 23%, while grooming had a 10% share.
  
Thus, P&G’s beauty sales (including grooming) increased by 9% (4% organic growth), to $27.8 billion. Beauty net sales (without grooming) increased 9% in 2008 to $19.5 billion. Skin care volume was up mid-single digits driven by growth on Olay behind the Definity and Regenerist initiatives. P&G’s share of the global skin care market grew slightly. Volume in prestige fragrances was up low-single digits and organic volume was up high-single digits behind new product launches from Dolce & Gabbana and Hugo Boss. Retail hair care volume was up mid-single digits. P&G also recently acquired high-end hair care brand Frederic Fekkai & Co.
  
P&G estimates the global beauty market at  $230 billion, and claims the lead in hair care (over 20% of the global market share); in skin care (primarily with the Olay brand, the top facial skin care retail brand in the world); and in prestige fragrances (primarily with the Gucci, Hugo Boss and Dolce & Gabbana fragrance brands).
  
Grooming net sales increased 11% to $8.3 billion in 2008. Gillette Fusion became P&G’s 24th billion-dollar brand. The most recent addition to the billion-dollar brand club, Fusion went from launch to billion-dollar stature in just two years, the fastest in P&G’s 171-year history.
  
A third of these 10-digit brands fall into P&G’s impressive beauty category, which boasts Head & Shoulders, Gillette, Mach3, Fusion, Braun, Pantene, Olay and Wella. Since the beginning of the decade, P&G has more than doubled its brands that generate over a billion dollars in annual sales—from 10 to 24. In addition, 20 P&G brands now generate between $500 million and $1 billion in annual sales. Of these, nearly a third are beauty brands: Max Factor, CoverGirl, SK-II, Hugo Boss, Venus and Herbal Essences.
  
P&G recently announced the purchase of Nioxin Research Laboratories, Inc., a leader in the scalp care professional hair care segment. Concurrently, P&G announced the sale of its iconic skin care brand Noxzema to Alberto-Culver, maker of Alberto VO5 shampoo and St. Ives lotion.
  
To review Beauty Packaging’s in-depth report on P&G, please go to www.beautypackaging.com/ articles/2008/01/pg-our-company-of-the-year.php)