In the depths of winter it’s hard to believe spring will ever come, but stay positive, it will soon enough! When spring does arrive, it marks the start of the peak season for suppliers and retailers of household cleaning and laundry products.
The biggest company in the household cleaning and laundry market both here and worldwide is Procter & Gamble, who recently set out their vision for 2017, as detailed by John Drake, P&G’s Head of Channel for Discount, Drug, Pharmacy, Wholesale and Convenience.
Founded in Cincinnati in 1837, P&G has led since the start with its first advertising campaign a year later, a dedicated R&D set up from the early days and its first patent in 1847. These days P&G’s portfolio straddles other markets beside the household cleaning and laundry products this feature is concerned with, but in this category P&G’s brands have been familiar to shoppers for generations. The UK is P&G’s biggest market in Europe, which represents 26% of P&G’s global business.
After 80 years in the UK P&G’s purpose here is still very much the same – supplying branded products, offering superior quality and value, improving consumers’ lives now and for generations. In our omnichannel era consumers weigh up value wherever they shop – online, in c-stores and supermarkets. For P&G, like other cleaning product manufacturers the challenge is to make sure their brands are available everywhere, offering retailers longterm sustainable models.
John Drake says his company spends $2bn annually on R&D across their portfolio, twice the nearest competitor, and won’t put out products they don’t think are superior. The statistics are impressive – P&G have 20 brands in the top 20 household brands and every UK household buys 7 P&G brands and 29 P&G packs every year. Talking in early 2017 John Drake concedes the future is uncertain – Brexit is a challenge but P&G have seen much of this before and believe strongly that collaborating with retailers is the way to go.
Inflation is expected to rise but P&G offers products at different price tiers, creating environments where all consumers can win. John talks of a combined strategy of innovation, simplification and creating value. Suppliers mustn’t be distracted by Brexit but should instead be bold, and P&G is leading the way by cutting out 30% of SKUs across its portfolio in its Shelfhelp scheme. There is a clear profit benefit with less to be moved and stocked: 20-30% less products mean 10% more sales.
This is a market where all retailers can do well – online, c-stores and supermarkets and the discounters have room to grow too. John Drake says they are taking on more brands and could, in time, be 15% of the market. He concedes Brexit will see more imported brands and the exchange rate will certainly have its effect but P&G’s domestic-made brands will remain strong.