Procter & Gamble’s got its hands in just about every brand category on earth, but the company’s pulling 100 brands off the shelves in an effort to consolidate its financial focus going forward.
According to Procter & Gamble, 80 brands are bringing in 95% of company profits, so it makes sense that nearly as many brands that aren’t doing so hot would be the firsts to get pulled. Procter & Gamble CEO A. G. Lafley said in a telephone call with P&G investors that “This new streamlined P.&G. should continue to grow faster and more sustainably, and reliably create more value. Importantly, this will be a much simpler, much less complex company of leading brands that’s easier to manage and operate.”
We don’t yet know what brands Procter & Gamble will eliminate, but we’ve heard from analysts that brands such as Tide, Pampers, Gillette, Olay, Pantene, and Cover Girl, other brands such as children’s toothpaste Zooth, beauty brand Graham Webb, and Asian detergent brand Trojan may be some of the firsts to depart. While it may seem easy to think that P.&G.’s strategy is all about profit, it’s also about what products fit best with the company’s overall image and perception. Some brands may be excellent at profit but be a stretch when lined up against other brands that, though not making as much, fit more with the company’s long-term goals.
One area that economic experts say Procter & Gamble may examine closely is the beauty field. Olay, Pantene, and Cover Girl seem to be doing well for the company, but they’ve not been enough to help the company rise to the current trend of beauty products economically. The beauty business has increased corporate sales by 2% in the last quarter – but Procter & Gamble’s beauty profits declined by 3%, a sign that maybe beauty’s not where it’s at for the company.
Procter & Gamble reported on Friday that its profit increased by 38% due to cost savings, with $11.6 billion in profit as opposed to $11.3 billion a year ago. Procter & Gamble’s shares are now at $4.01 as opposed to $3.86 a year ago.
Procter & Gamble’s also responsible for other brands from the ones mentioned above, such as Scope mouthwash, Braun, Bounty, Charmin, Crest, Dawn, Duracell, Head & Shoulders, Vicks, Oral-B, and Febreze.
