$11.8 billion (Beauty and Baby Care)
David S. Taylor, chairman, president and chief executive officer; Mary Lynn Ferguson-McHugh, group president, global family care and global brand creation and innovation, P&G Ventures; Henry Karamanoukian, senior vice president, go-to-market, China; Alex Keith, president, global beauty; Charles E. Pierce, group president, global grooming; Marc S. Pritchard, chief brand officer.
Aussie, Gillette, Head & Shoulders, Herbal Essences, Ivory, Olay, Old Spice, Pantene, Rejoice, Safeguard, Secret, Crest, Fixodent, SK-II, Oral-B, Scope, Art of Shaving.
Duo (Olay, Ivory and Old Spice), Old Spice Hydro Wash, Pantene Foam Conditioner, Head & Shoulders 2 in 1 Classic Clean, Art of Shaving fragrance collection.
In fiscal 2017, Procter & Gamble streamlined its product portfolio by divesting, discontinuing and consolidating around 100 “non-strategic” brands, which included four product categories spanning 43 haircare, hair styling, color cosmetics and fine fragrance lines under its beauty brand umbrella. The goal of the restructuring, coupled with newly honed marketing and advertising objectives and expenditures (cut by 50%) was to create leaner, more focused support for the company’s remaining 65 brands across 10 key categories.
Three-quarters of the way through fiscal 2017, the company saw its corporate sales fall less than 1% to just under $49 billion, with beauty sales declining 1% to $8.6 billion. Skin and personal care gains helped buoy beauty sales. One noteworthy development was the growth of Procter & Gamble’s super premium SK-II brand, which delivered consistent double-digit growth, and helped offset lower volume in its retail skincare numbers. Organic hair care sales were flat.
In an effort to jump start innovation, the company debuted DUO, a dual-sided body cleansing buffer that brings together the clean of a traditional bar soap with a skin softening body wash in one convenient package. The specially designed cleansing implement also highlights the duality, boasting one side with exfoliating microscrubbers and a soft, plush flip side. The product was born out of consumer research indicating that 34% of men and 44% of women tend to cleanse with both a bar soap and a body wash in the shower. The product iteration spans many of Procter & Gamble’s most popular brands including Olay, Old Spice and Ivory.
News of Note in 2017: P&G continues to adapt in areas it believes are most important to consumers. In a nod to increased consumer preference for product transparency, the company announced plans to pull back the proverbial curtain and disclose the ingredients for all of its fragrance products in the U.S. and Canada by 2019. The ingredients will be available for public viewing online and the initiative was said to be another step in the company’s “sustainability journey toward enabling consumers to make informed choices.”
The company is also making strides toward its overall goal for improved sustainability to “better serve the increasingly environmentally concerned shopper.” To date, Procter & Gamble has qualified 73% of its plants as sending zero manufacturing waste to landfill, completed the final stages of wind and biomass projects that will nearly double their use of renewable energy once they are fully online, and announced their first recyclable shampoo bottle—Head & Shoulders—which is made with reclaimed 25% “beach plastic.”
Looking Ahead: In his remarks to shareholders, CEO Taylor expressed that Procter & Gamble is on track to be where the company projected it would be in fiscal 2018.
“We’re making sequential progress, and we’re raising the bar in everything we do,” he said. “We’re accelerating efforts to execute and deliver on the plans we’ve put into action.”
Progress, he said, will be measured in years, not quarters, promising that the company’s commitment to investing in innovation and brand building is architected to shore up P & G’s positioning “for the next three years, five years, and into the future,” with a continued consecutive acceleration of organic sales growth expectation of 2% to 3%, core earnings per share growth of 5% to 7%, and 90% or better free cash flow productivity. That said, company executives project the ongoing tweaks to the company’s supply chain (reducing manufacturing expenses, transportation and warehousing, and raw and pack materials) from 2017 through 2022 could amount to a savings in the neighborhood of $10 billion.