P&G vice chairman on innovation: ‘Superiority is an opportunity that does not sunset’
This insight comes after P&G reported a net sales rise in the second quarter (Q2) of fiscal 2021 and raised its full-year outlook as it continued its upwards trajectory despite challenges associated with the ongoing COVID-19 pandemic.
Addressing attendees at last week’s online Consumer Analyst Group of New York (CAGNY) 2021 conference, Jon Moeller, vice chairman, chief operating officer and chief financial officer of P&G, said “superior products, superior packages and superior execution” would continue to be core to company strategy as it navigated its way out of the COVID-19 crisis.
“Superiority is an opportunity that does not sunset,” Moeller said. “It is a relative measure versus the best competition in the market. It’s not a static target; there is always upside to grow categories and delight consumers.”
Superior gains made in China hair care – Pantene innovation and social buzz
There were some clear examples across P&G’s global portfolio proving that this superior strategy worked, he said, including innovations in China’s hair care market and across US oral care.
“Superiority is enabling strong results in our China hair care business, with first half organic sales up double-digits – one of the strongest growth periods in the last decade,” Moeller said.
P&G’s Pantene brand had shown particularly strong growth, with organic sales up 20% in the first half (H1) of fiscal 2021, following just 4% growth last year and flat to declining sales in the years prior to that.
“The brand addressed significant gaps across several superiority vectors, launching premium innovation in the underdeveloped segments of conditioner and treatments and improving how we communicate with consumers online,” he said.
Pantene’s Quench Intensive Shot Masks and 3-minute Miracle product launches had “successfully attracted new consumers to the brand” but also engaged existing consumers, Moeller said, overall contributing to more than 35% market growth online in the past 12 months.
Importantly, P&G had heavily invested in “driving strong social buzz” around these two premium product launches, shifting most of its advertising dollars into “quick digital engagements and influencer live streaming during major online promotional events”, he said.
Results of these efforts were “strong”, Moeller said, with both products set to deliver sales growth of over 100% this fiscal year.
Super-premium launches in US oral care – iO brush and Crest Whitening Emulsion
Superior innovation and execution had also proven valuable in P&G’s oral care business, Moeller said, notably in North America.
The launch of P&G’s Oral B iO rechargeable electric toothbrush provided “an irresistible brushing experience” for consumers, with improved efficacy and compliance thanks to its position-sensing technology, he said, and had already achieved more than 50% share of the super-premium toothbrush category in the US. The value of the superior performance of the product, he said, was clearly “evident to consumers” who widely engaged with the product, despite its premium price tag.
“Through Q2 [fiscal 2021], iO has contributed more than half of US power brush category growth and is expected to reach $200m [€164.5m] in sales in fiscal ’21.”
P&G’s Crest toothpaste brand had also demonstrated the power of superior innovation, with innovations like Gum Detoxify, Enamel Care and 3D Whitening with Charcoal all driving high single-digit organic sales growth to the company’s global toothpaste business.
In North America, Moeller said Crest Whitening Emulsions – launched in Walgreens in October 2020 – would be “the next breakthrough in teeth whitening” as the product enabled consumers to apply product up to four times a day without brushing or rinsing. Since its launch, he said the product had already achieved a 15% value share gain.
Potential for ‘superior performance’ to rise in importance post-COVID
“Superior products, delivered with superior packaging, brand communication, retail execution and value in all price tiers where we compete”, Moeller said, would continue to be crucial as P&G moved into a post-COVID world.
Many lasting consumer trends, including more time at home, the rise in e-commerce and a forever-altered cleaning, health and hygiene focus, would likely drive heightened importance towards superior performing products, he said.
“In the longer term, we believe P&G is well positioned to serve consumers’ heightened needs and changing behaviours and to serve the changing needs of our retail and distributor partners – all of which are critical to long-term value creation.
“…While we will undoubtedly experience some volatility, as and when we move to a new reality, and quarterly results will not move in a straight line, we’re optimistic about our post-COVID prospects and generally like our hand,” Moeller said.