Jamie Matusow, Editor10.01.14
Update: Procter & Gamble ranks at #4 on our latest report Top 20 Global Beauty Companies 2021.
Cincinnati, OH
www.pg.com
Corporate Sales: $84.2 billion
Beauty Sales: $20 billion
Key Personnel: A.G. Lafley, chairman, president and chief executive officer; Melanie L. Healey, group president, North America and global hyper, super and mass channel; Deborah A. Henretta, group president, P&G global beauty, Joanne Crewes, president-global prestige; Colleen Jay, president-global retail hair care and color; Adil Mehboob-Khan, president-global salon professional.
Major Products: Cover Girl, Max Factor, Olay, Old Spice, Safeguard, Secret, Head & Shoulders, Herbal Essences, Nice’ n Easy, Pantene, Rejoice, Lacoste, Pert, Sebastian, Gucci, Hugo Boss, SK-II, Wella, Head & Shoulders, Olay, Pantene, SK-II, Wella.
New Products: Cover Girl Outlast Stay Brilliant, Clairol 5in1, Pantene Pro-V Anti-Oxidant Technology, Vidal Sassoon Pro Series ColorFinity Collection, Gillette Body, Old Spice grooming collection, Dolce & Gabbana Dolce, Old Spice Re-fresh body sprays; Pantene Expert Collection Age Defy Advanced Thickening Treatment.
Comments: In a year marked by corporate leadership change, uncertain global economic conditions and fierce market competition, Procter & Gamble’s overall sales rose 1% in fiscal 2014 (down from 3% in the previous year), but still reaching a record $84.2 billion.
Beauty, the consumer goods manufacturer’s second largest unit, accounted for about 24% of net sales, but earnings for the year were down 2% from the previous year. Volume grew low single digits. “Beauty segment organic sales were flat with gains from market growth and product and commercial innovation in hair care, deodorants, and personal cleansing offset by sales decreases in salon professional and skincare from competitive activity and market contraction,” according to the company.
Making Adjustments
When A.G. Lafley took back the reins of P&G last year, he readjusted the company’s business units once more to focus on and improve key industry areas. Global Beauty now encompasses Beauty Care (Antiperspirants and Deodorants, Cosmetics, Personal Cleansing and Skin-care); Hair Care & Color; Prestige (fragrances and prestige skincare); and Salon Professional.
With five billion- dollar brands in the Beauty unit—Head & Shoulders, Olay, Pantene, SK-II and Wella—P&G says that Olay is the top facial skincare brand in the world with approximately 10% global market share. In hair care and color, P&G claims a 20% global market share thanks to Pantene and Head & Shoulders. In the prestige channel, the company’s leading contenders are prestige fragrances and the SK-II brand.
Dolce & Gabbana, Gucci and Hugo Boss prestige fragrance brands top the global market.
In the 2013 annual report, Lafley acknowledged that much progress had been made as far as rebuilding the sluggish sales, but there was more to be done. Similar to the case with other of our Top 20 companies, he said, “We are focusing our resources on our leading, most profitable products, categories and markets.” He said they would also zero in on core markets, such as the U.S., as well as investing in the most promising categories and countries. The consumer products giant also initiated—and kept at the forefront—a number of comprehensive cost-saving steps covering areas including cost of goods sold, marketing expenses and overhead.
One thing P&G says it has not cut back on is innovation, which it calls its ”lifeblood.”
Targeting Beauty Sales
Despite the lag in 2013 sales, Lafley remains positive, saying, “I’m as confident as ever that P&G has what’s needed to win—with consumers, customers and shareholders.”
At the end of January, following the company’s lackluster second quarter, Beauty proved to be the weakest of P&G’s business segments, as category sales had declined 2.2%, to $5.28 billion from $5.4 billion. Skincare sales were hurt most.
Even in the highly competitive hair care business, P&G said there had been pockets of strength, such as double-digit growth in Europe, the Middle East and Africa for the Head & Shoulders brand.
Pantene was credited as the “biggest opportunity” in hair care, and high hopes were placed on its new Old Spice brand hair care products.
Further betting on the men’s market, P&G attempted to stretch the value of its billion-dollar Gillette brand with the launch of a new line of male grooming products called Gillette Body.
Two additional new product ranges for women also emerged: Pantene Pro-V Anti-Oxidant Technology, Pantene’s first clinically tested solution to oxidative damage, and Vidal Sassoon Pro Series ColorFinity Collection, which is said to lock in long-lasting color.
To boost Olay’s skincare story and to highlight the line’s new reformulation, Olay Regenerist partnered with Dr. Omar Torres, a renowned dermatologist and author.
In July, P&G announced a new hair care product, just launched in the UK, which it said aims to “revolutionize the hair care market.” Clairol 5in1, billed as “the multi-benefit family-tailored solution,” offers five key hair care benefits including cleansing, softening, nourishing, perfuming and detangling.
The Prestige fragrance market has proved to be a winning one with P&G—reportedly generating about $2.5 billion a year in sales—so the manufacturer is pursuing options here, too. P&G Prestige signed a licensing agreement to manufacture and distribute women’s scents under the James Bond 007 name.
The launch will be coordinated with the release of the next James Bond movie in 2015. P&G also signed with designers Stella McCartney and Alexander McQueen to develop new fragrances, and released a new Dolce & Gabbana scent, Dolce, in March.
Brand Cuts Ahead
However, these profitable brands may not be enough to propel the CPG manufacturer to where it wants to be in Beauty—or otherwise. In the last couple of months, P&G has announced an ambitious—and aggressive—plan to restore greater sales and higher profitability, as well as market expansion. It all stems back to focusing on its key, most dynamic, best-selling brands and cutting under-performers. Up to 100 of its brands (half of its holdings) may be headed for the selling block—even Ivory soap, its first branded product in the U.S. market more than 135 years ago.
Simultaneously, P&G, which also owns Pampers, announced plans to enter the adult diaper market, counting on baby boomers to generate another billion-dollar brand.
Cincinnati, OH
www.pg.com
Corporate Sales: $84.2 billion
Beauty Sales: $20 billion
Key Personnel: A.G. Lafley, chairman, president and chief executive officer; Melanie L. Healey, group president, North America and global hyper, super and mass channel; Deborah A. Henretta, group president, P&G global beauty, Joanne Crewes, president-global prestige; Colleen Jay, president-global retail hair care and color; Adil Mehboob-Khan, president-global salon professional.
Major Products: Cover Girl, Max Factor, Olay, Old Spice, Safeguard, Secret, Head & Shoulders, Herbal Essences, Nice’ n Easy, Pantene, Rejoice, Lacoste, Pert, Sebastian, Gucci, Hugo Boss, SK-II, Wella, Head & Shoulders, Olay, Pantene, SK-II, Wella.
New Products: Cover Girl Outlast Stay Brilliant, Clairol 5in1, Pantene Pro-V Anti-Oxidant Technology, Vidal Sassoon Pro Series ColorFinity Collection, Gillette Body, Old Spice grooming collection, Dolce & Gabbana Dolce, Old Spice Re-fresh body sprays; Pantene Expert Collection Age Defy Advanced Thickening Treatment.
Comments: In a year marked by corporate leadership change, uncertain global economic conditions and fierce market competition, Procter & Gamble’s overall sales rose 1% in fiscal 2014 (down from 3% in the previous year), but still reaching a record $84.2 billion.
Beauty, the consumer goods manufacturer’s second largest unit, accounted for about 24% of net sales, but earnings for the year were down 2% from the previous year. Volume grew low single digits. “Beauty segment organic sales were flat with gains from market growth and product and commercial innovation in hair care, deodorants, and personal cleansing offset by sales decreases in salon professional and skincare from competitive activity and market contraction,” according to the company.
Making Adjustments
When A.G. Lafley took back the reins of P&G last year, he readjusted the company’s business units once more to focus on and improve key industry areas. Global Beauty now encompasses Beauty Care (Antiperspirants and Deodorants, Cosmetics, Personal Cleansing and Skin-care); Hair Care & Color; Prestige (fragrances and prestige skincare); and Salon Professional.
With five billion- dollar brands in the Beauty unit—Head & Shoulders, Olay, Pantene, SK-II and Wella—P&G says that Olay is the top facial skincare brand in the world with approximately 10% global market share. In hair care and color, P&G claims a 20% global market share thanks to Pantene and Head & Shoulders. In the prestige channel, the company’s leading contenders are prestige fragrances and the SK-II brand.
Dolce & Gabbana, Gucci and Hugo Boss prestige fragrance brands top the global market.
In the 2013 annual report, Lafley acknowledged that much progress had been made as far as rebuilding the sluggish sales, but there was more to be done. Similar to the case with other of our Top 20 companies, he said, “We are focusing our resources on our leading, most profitable products, categories and markets.” He said they would also zero in on core markets, such as the U.S., as well as investing in the most promising categories and countries. The consumer products giant also initiated—and kept at the forefront—a number of comprehensive cost-saving steps covering areas including cost of goods sold, marketing expenses and overhead.
One thing P&G says it has not cut back on is innovation, which it calls its ”lifeblood.”
Targeting Beauty Sales
Despite the lag in 2013 sales, Lafley remains positive, saying, “I’m as confident as ever that P&G has what’s needed to win—with consumers, customers and shareholders.”
At the end of January, following the company’s lackluster second quarter, Beauty proved to be the weakest of P&G’s business segments, as category sales had declined 2.2%, to $5.28 billion from $5.4 billion. Skincare sales were hurt most.
Even in the highly competitive hair care business, P&G said there had been pockets of strength, such as double-digit growth in Europe, the Middle East and Africa for the Head & Shoulders brand.
Pantene was credited as the “biggest opportunity” in hair care, and high hopes were placed on its new Old Spice brand hair care products.
Further betting on the men’s market, P&G attempted to stretch the value of its billion-dollar Gillette brand with the launch of a new line of male grooming products called Gillette Body.
Two additional new product ranges for women also emerged: Pantene Pro-V Anti-Oxidant Technology, Pantene’s first clinically tested solution to oxidative damage, and Vidal Sassoon Pro Series ColorFinity Collection, which is said to lock in long-lasting color.
To boost Olay’s skincare story and to highlight the line’s new reformulation, Olay Regenerist partnered with Dr. Omar Torres, a renowned dermatologist and author.
In July, P&G announced a new hair care product, just launched in the UK, which it said aims to “revolutionize the hair care market.” Clairol 5in1, billed as “the multi-benefit family-tailored solution,” offers five key hair care benefits including cleansing, softening, nourishing, perfuming and detangling.
The Prestige fragrance market has proved to be a winning one with P&G—reportedly generating about $2.5 billion a year in sales—so the manufacturer is pursuing options here, too. P&G Prestige signed a licensing agreement to manufacture and distribute women’s scents under the James Bond 007 name.
The launch will be coordinated with the release of the next James Bond movie in 2015. P&G also signed with designers Stella McCartney and Alexander McQueen to develop new fragrances, and released a new Dolce & Gabbana scent, Dolce, in March.
Brand Cuts Ahead
However, these profitable brands may not be enough to propel the CPG manufacturer to where it wants to be in Beauty—or otherwise. In the last couple of months, P&G has announced an ambitious—and aggressive—plan to restore greater sales and higher profitability, as well as market expansion. It all stems back to focusing on its key, most dynamic, best-selling brands and cutting under-performers. Up to 100 of its brands (half of its holdings) may be headed for the selling block—even Ivory soap, its first branded product in the U.S. market more than 135 years ago.
Simultaneously, P&G, which also owns Pampers, announced plans to enter the adult diaper market, counting on baby boomers to generate another billion-dollar brand.