Below is a look at the company's 2020 highlights, recent acquisitions, best-selling brands, and latest innovations.
- David S. Taylor, chairman of the board, president and chief executive officer
- Jon R. Moeller, vice chairman, chief operating officer and chief financial officer
- R. Alexandra Keith, chief executive officer, Beauty
- Markus Strobel, president Global Skin & Personal Care
- Head & Shoulders
- Herbal Essences
- Old Spice
- Olay Premium Body Wash with Collagen
- Nutrient Blends collection
- Herbal Essences bio:renew collection
- SK-II Pitera Treatment Essence
- Aussie Total Miracle and Miracle Moist conditioners and sprays
- Secret Essential Oils deodorant
With several of the world’s leading Beauty brands—Olay, Pantene and Head & Shoulders—as well as an array of necessities such as deodorants and cleaning products, diversification paid off big for Procter & Gamble, whose stock hit an all-time high in 2020.
During the pandemic, the company had one of their best years ever, reporting fiscal year 2020 net sales (ended June 30, 2020) of $71 billion, an increase of 5% over the prior year. Everyday staples and trusted brands helped to easily propel the global manufacturer through the first six months of Covid, as orders for items such as shampoo, detergents and cleaners soared. Net sales increased 1% to $67.7 billion on a 3% increase in unit volume.
According to David S. Taylor, chairman of the board, president and chief executive officer, “We expect to grow through this crisis and come out even stronger on the other side,” Taylor stated in the company’s annual report. “We delivered strong, balanced sales and profit results in fiscal 2020, both pre-Covid and through the balance of the year, meeting or exceeding each of our going-in targets, demonstrating the commitment and agility of P&G people and the robustness of our strategy.”
In 2019, P&G reorganized its global business units into five categories, with Beauty now a standalone. It includes Hair Care (Conditioner, Shampoo, Styling Aids, Treatments); Skin and Personal Care (Antiperspirant and Deodorant, Personal Cleansing, Skin Care).
Beauty sales were up 4% over the prior year, recording $12.9 billion, with the Skin & Personal Care category growing in mid-teen digits. Hair Care and Skin & Personal Care accounted for 19% of net sales. In Hair Care, volume increased low single digits. Volume in Skin and Personal Care increased high single digits. P&G said the category experienced “disproportionate growth” including the super-premium SK-II and premium Olay Skin brands which have higher than segment average selling prices.”
P&G’s Olay brand is feted as one of the top facial skin care brands in the world with nearly 6% global market share. P&G also claims to be the global market leader in the retail hair care market with over 20% global market share, primarily behind their Pantene and Head & Shoulders brands.
Packaging—the whole package—is an important criterion at P&G. The global powerhouse says their holistic strategy starts “with noticeable superiority across all elements of our consumer proposition—products, packaging, brand communication, retail execution (in-store and online), and consumer and customer value. It takes into account that consumers don’t focus on one element of a brand only. Consumers interact with the whole brand—the product, package, what we say and how they feel about the brand, how they experience it in the store or online and whether it truly creates value over alternatives.”
Take Olay Cellscience for example. P&G says Olay Cellscience’s super-peptide formula and prestige-inspired packaging was specifically designed for China’s discerning beauty consumers. This consumer-led innovation helped Olay deliver two consecutive years of strong double-digit organic sales growth in China.
In January, P&G acquired women’s D2C Beauty & Grooming Co. Billie—a subscription-based, direct-to-consumer female body care company focused on women’s shaving supplies and premium body care products. Their current product portfolio includes razors, shaving cream, body wash and body lotion.
P&G continues to innovate on the sustainability front. By 2030, P&G Beauty’s brands have committed to using 100% recyclable or reusable packaging while reducing the use of virgin petroleum plastic by 50%. On April 20, 2020, in celebration of the 50th Anniversary of Earth Week, P&G Beauty announced that Old Spice and Secret are the first major brands to introduce all-paper, plastic-free deodorant packaging. The two brands tested “the first all-paper tube package” for select Old Spice and Secret aluminum-free deodorants in May at 500 Walmart stores in the U.S.
The paper tube package, made of 90% recycled paper, is certified by the Forest Stewardship Council and features a “push up” design that would replace some of P&G’s plastic stick deodorant cannisters. P&G, which is completing the second phase of recyclability testing on the new package this fall, hopes to learn how consumers respond to the design. If successful, P&G will expand the new package across more of its line-up.” The manufacturer has also trialed refillable packaging for Olay.
Net sales in the fourth quarter of fiscal year 2020 (ended June) were $17.7 billion, an increase of 4% versus the prior year. Beauty segment net sales remained flat versus a year ago. Skin and Personal Care organic sales decreased low single digits primarily driven by negative product mix due to double digit decline of the super-premium SK-II brand driven by pandemic-related travel disruptions. This was partially offset by increased volume in Personal Cleansing. Hair Care organic sales increased high single digits driven by strong innovation and retail execution in North America and China, increased pricing due in part to a reduction in promotional activity and retailer inventory restocking.
The company expects fiscal 2021 all-in sales growth in the range of 1-3% versus the prior fiscal year. This includes an estimated 1% negative impact from foreign exchange. The company is targeting organic sales growth in the range of 2-4%.
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