August 20, 2011, to August 27, 2011
Estee Lauder plans to open more retail outlets in China, adding five more cities to the 38 it currently has. It also indicated it will launch ecommerce channels in the country which is now the world's third-largest market for cosmetics and toiletries. Estee Lauder's sales grew 13 percent in 2010, with China accounting for a large part of the jump in sales. Chinese consumers no longer look at cosmetics as luxury items are and increasingly are able to purchase a wide range of products in the country rather than overseas. The market is increasingly competitive and other cosmetics companies are expected to follow Estee Lauder's move.
Eco-friendly household and personal care products maker Seventh Generation has named consumer products branding specialist Joey Bergstein as its new chief marketing officer. Bergstein most recently was senior VP of Diageo, where he built the Captain Morgan rum brand, and has been a VP at Canadian brewer Molson. Bergstein is explicit about his mission at Seventh Generation, a company with a great team and a brand with untapped potential. Seventh Generation, he says, lacks “innovative brand strategies and new marketing programs that will drive the kind of exponential growth its products are more than capable of achieving.”
Several US companies have introduced sustainable packaging technologies for cosmetics and personal care products in 2011. Notable examples include Eco Vision that received a US patent for its Eco Jar biodegradable packaging for cosmetics, Pantene that launched the Pantene Pro-V Nature Fusion line of hair care products with bottles made mainly from plant-based plastic and Colbert Packaging which improved the design of its EnviroGuard consumer product packaging that includes no plastics.
August 13, 2011, to August 20, 2011
Pallet and container pooling solutions provider CHEP says it has renewed a contract – and 15-year relationship – with Procter & Gamble. The company said it works closely with P&G to support retail supply chain activities like sustainability and standardization. CHEP’s returnable and reusable pallets are used to transfer numerous consumer goods, fresh produce, beverages and automotive products. Customers besides P&G include Sysco, Kellogg's, Kraft, Nestlé, Ford and GM.
Unilever PLC CEO Paul Polman has overhauled his company's management structure, reorganized the "innovation team" that develops new products and production processes, and implemented a major cost-cutting campaign as he seeks to double sales and reduce Unilever's environmental footprint. The economic slowdown that began in 2008 helped Polman in implementing changes at Unilever, which is forecast to grow its sales from €39.8 billion in 2009 to more than €45 billion in 2011. Polman has continued his predecessor Patrick Cescau's "One Unilever" campaign to unify and rationalize the company's workforce and address issues created by Unilever's history as a collection of merged companies, particularly the lack of centralized management. Polman aims to enhance Unilever's ability to compete with rival Procter & Gamble, his former employer.
The natural cosmetics market in the Middle East is forecast to grow 20% in 2011, according to the Middle Eastern Market for Natural Cosmetics study by Organic Monitor. Natural products make up a small share of beat sales in the Middle East – just 0.1% compared to over 3% in North America and Europe. Worries about political and social unrest have failed to dampen the market, with sales growing fast in several countries. United Arab Emirates accounts for more than half of total market revenues, while demand in other countries is focused mainly in major cities. Rich consumers and tourists create most of the demand for natural and organic cosmetics in the region, the report says.
August 06, 2011, to August 13, 2011
Procter & Gamble Co. added $700 million, or 8 percent, to its global advertising budget, which reached $9.3 billion for the fiscal year ending June 30, 2011. A sluggish economy and rising commodity prices made this ad spending more significant, setting unprecedented records in terms of value and in share of sales (11.3 percent) for P&G. The company performed better than Wall Street forecasts for sales and earnings per share, with organic sales growing 5 percent for the fourth quarter and 4 percent for the year. P&G plans to increase its ad spending in line with sales which are expected to grow 5 percent to 9 percent.
Consumer packaged goods companies are learning that promoting their Facebook and Twitter accounts in online ads, especially within the ad so users do not need to click away from the site they are on, leads to higher response rates. For example, Mrs. Meyers recently ran an online ad that posted consumer-interaction data much better than the industry's average figures, with 35 of every 1,000 online users clicking the ad's Learn More button, which leads to the brand's Web site, about 35x the average rate. Hyperlink seller Kontera designed an online ad for Kraft that highlights the food company's promotion deal with the TV program "Glee." Adding Facebook and Twitter content transforms online ads into something more alive, according to marketing expert and author Andy Smith.
Procter & Gamble reported fourth quarter earnings of $0.84 a share, an increase of 18 percent, “driven by sales growth and operating margin expansion.” For the fiscal year, earnings were $3.93 a share, up 11 percent thanks to sales growth and a lower effective tax rate. Net sales grew 10 percent to $20.9 billion for the fourth quarter and five percent to $82.6 billion for the fiscal year. CEO Bob McDonald said the growth in earnings per share, plus five percent growth in organic sales (excluding the impact of acquisitions, divestitures and foreign exchange) were “delivered … in a challenging environment.” The company said volume growth was led by high single-digit growth in baby care and family care.
July 30, 2011, to August 06, 2011
Western consumer packaged goods companies are investing in consumer research to adapt their marketing campaigns to local conditions in Russia. Reckitt Benckiser spends around 12 percent of its $440 million revenue from the former Soviet countries on consumer research and marketing, an investment that helped the company launch a successful advertising campaign for its Calgonit dishwasher tablets after research found that Russian women spend inordinate amounts of time on washing dishes because dishwashers are not common in Russian homes. The company also found success in marketing its Clearasil anti-acne treatment although Russian teenagers had been using soap and water until ten years ago. Unilever signed up Russian celebrity Vera Brezhneva to endorse its Rexona deodorant after research showed majority of Russian women viewed her as their ideal of a perfect woman.
Analysts believe that Unilever plans to sell its food division to finance reported plans to acquire a home and personal care company. Such an acquisition would help improve the company's performance in the stock market, where concerns about skyrocketing materials costs and declining consumer spending have hammered Unilever shares recently. Letting go of its food unit will enhance the company's growth potential, while an acquisition in the home care segment will strengthen the company's profile in that category. Some investment analysts advise clients to buy shares of Unilever, which is reportedly looking at Reckitt Benckiser as a potential takeover target.
A study by Spanish scientists has found that certain polyphenol compounds (flavonoids) extracted from grapes can reduce the formation of “reactive oxygen species” (ROS) in human skin cells exposed to long-wave (UVA) and medium-wave (UVB) ultraviolet radiation. UV rays activate ROS compounds, which in turn oxidize macromolecules such as lipids and DNA and stimulate certain reactions leading to cell death. The polyphenols in grapes, however, inhibit formation of ROS compounds, thus protecting the skin from the sun’s ultraviolet radiation. The scientists say their findings support the use of grapes or grape derivatives in sun protection products.
July 16, 2011, to July 30, 2011
Procter & Gamble deodorant brand Secret has launched a supportive Facebook community to help women stand up to what it calls “stinky behavior”: bullying. The “Mean Stinks” program involves the participation of several partners, including actress Amber Riley of the TV show Glee, relationship expert Rachel Simmons, and PACER's National Bullying Prevention Center. Secret's program is based on data collected from a survey of 1,000 women ages 16-21 that showed that bullying extends beyond grade school and has intensified with the explosion of cyber-bullying. Forty-eight percent of college-age students have experienced or have witnessed bullying or mean behavior at college or in the work environment, the survey found.
Unilever held a ground-breaking ceremony for the Unilever Four Acres, the company's proposed global leadership development center in Singapore. The company said the planned center highlights Unilever's commitment to emerging markets, particularly in Asia, which accounts for more than half of the company's total turnover. Unilever expects the center to help the company develop a global pool of management talent and help fuel its growth efforts.
Avon Products reported second-quarter operating profit of $317 million, an increase of 19 percent from last year, on revenue of $2.9 billion, up nine percent from last year. The operating margin was 11.1 percent, up 100 basis points year over year, and adjusted operating profit was up six percent. Constant-dollar sales rose two percent in the second quarter as foreign exchange contributed seven percent to growth. CEO Andrea Jung said the company expects mid-single digit revenue growth in the second half of this year, driven by a “major global field activation program” in conjunction with its 125th anniversary. Beauty sales increased eight percent year over year (one percent in constant dollars). Fragrance and personal care grew 11 percent, color eight percent, and skincare three percent.
July 09, 2011, to July 16, 2011
Johnson & Johnson brand AMBI Skincare has joined with beauty expert Mikki Taylor in a marketing initiative designed to “empower, inspire and celebrate women of color” and provide tools and resources needed “to feel beautiful inside and out.” Taylor has for many years served as beauty and cover director of Essence magazine. The campaign includes an AMBI Facebook segment featuring live chats with Taylor, providing fans “like” the AMBI brand. In addition, women can post personal stories and words of inspiration on the page. Women will also be able to interact with Taylor through "meet & greet" events around the country. At these events, “Taylor will inform and further inspire a generation of proud, flawless females,” the company said.
A German private-label manufacturer of hand dishwashing liquids illegally sold dishwashing detergents under the Magnum brand in bottles that duplicated the “shape and overall appearance” of Procter & Gamble’s Fairy brand, a market leader in the U.K., according to a lawsuit filed by P&G. The company claims that Luhns GmbH of Düsseldorf, Germany, violated P&G's intellectual property by selling the detergents to a retailer in the U.K. P&G says it welcomes competition from other detergent makers, but wants to make sure consumers are not confused by the “presentation” of competing products in the marketplace.
Procter & Gamble Co. has announced a recall of its Oral B mouthwash product in Mexico, Canada, Colombia and Chile because of potential microbial contamination at a production facility in Colombia. Two varieties of the mouthwash were recalled in Canada, followed by 600,000 bottles in Mexico. The company said it discovered the problem during an inspection at the Colombian plant. It also said there have been no reports of illness due to the possible contamination problem.
July 02, 2011, to July 09, 2011
Consumption will grow 14% in India over the next three years, according to Ambit Capital Research's "Indian Consumer: a robust operator in an uncertain world" report. Multinational companies recognize India's growth potential, as they shift their business focus from mature markets in Europe and the United States to Asia-Pacific and Latin America. For example, McDonald's India is expected to increase its contribution to McDonald's Corp.'s global business from 0.37% to 0.5%, while Unilever expects emerging markets to account for 70%-75% of its global revenue by 2020, up from the current 56%. India is playing an increasing role in multinationals' manufacturing operations, as well as in innovation.
Premium beauty product sales rebounded strongly in 2010, driving the recovery of the global beauty and personal care industry. Also fueling the recovery was “dynamic innovation activity” in skin care, the largest market category, Natural Products Insider reports. The category is expected to grow three percent a year to $100 billion in sales by 2015, one fourth of which will come from sales of anti-aging products. Thanks to the focus on innovation, technically advanced skin care formulations based on stem cell technology and aesthetic medicine are showing up in new cosmeceutical products. A major disappointment, however, has been the slow start of nutricosmetics products, which have not yet surmounted the skepticism of consumers.
Procter & Gamble has launched a new TV ad campaign for its Febreze air freshener brand whose goal is to prove to “real people around the world” that Febreze is capable of transforming the air so they can “breathe happy.” The Breathe Happy campaign will show that Febreze replaces odor with freshness in extreme odor experiments. Basing the campaign on market research findings that scent and smell are the first thing Americans notice when they walk into a room, the ads will show people’s reaction to different “odor scenarios” in everyday environments like hotels, restaurants, etc. They will then be shown how Febreze transforms the air for the better.
June 11, 2011, to July 02, 2011
Lower prices of palm oil offer India's fast moving consumer goods (FMCG) companies Hindustan Unilever and Godrej Consumer Products some relief from dropping margins. Profit margins of FMCG companies suffered from soaring prices of palm oil, a key ingredient in soap manufacturing, and other raw materials in 2010, with palm oil prices reaching record levels in February. However, prices have dropped about 18% to a seven-month low in June because of increasing inventories, expanding supplies, and falling crude oil prices. Palm oil makes up 16%-17% of HUL's total raw material costs, and 25%-28% for Godrej Consumer.
Paper products giant Kimberly-Clark will use CheckPoints LLC‘s mobile shopping app in an integrated commercial program that includes Walmart and ties its products in with the upcoming release of Disney Pixar’s Cars 2 film. The initiative is designed to push consumers to buy Kimberly-Clark products at Walmart, where shoppers can buy specially-marked K-C items and claim Cars 2 points that can be used for merchandise rewards. Products promoted during the campaign includes Kleenex facial tissue, Pull-Ups training pants, Viva paper towels, Scott paper towels, Cottonelle bath tissue and Huggies diapers and wipes.
Unilever's "Cada gesto conta" Facebook campaign has succeeded in promoting a socially responsible image for the company and its products in Brazil, according to social media monitoring company WaveMetrix. Brazilian consumers have come to see the company as ethical and caring, thanks to Facebook discussions about health and nutrition topics. WaveMetrix's analysis reveals that 79% of online discussion refers to Unilever as an ethical brand; 13% portrays Unilever as caring; and 8% sees the company as relevant.
May 28, 2011, to June 11, 2011
Procter & Gamble plans to acquire its biggest rival Unilever, according to recent rumors reported by mainstream media and by online news sites. Industry analysts and merger and acquisition (M&A) experts, however, have expressed doubt and reservation over the rumored $38 billion deal, and have raised the question of whether or not it would be allowed. Analysts also doubt the rumored merger will benefit consumers and markets, asserting that financial factors would be the companies' main priorities.
The Indian government has ruled that risqué deodorant ads are taboo on TV, the BBC reports. The country’s information ministry told TV stations that “overtly sexual” deodorant ads featuring female models offend good taste and decency and should be removed from the airwaves. The ads are “aimed at tickling libidinous male instincts,” according to the ministry, and infringe India's advertising code, which requires the “female form” to be shown in a “tasteful and aesthetic” manner. The Advertising Standards Council of India says it has investigated complaints about the ads in recent years and found some objectionable, others not. One of the ads questioned by the ministry shows a woman so captivated by a man's deodorant that she begins to disrobe.
Gartner's Supply Chain Top 25 report presents the leading companies in terms of supply chain management in 2011. The study also looks at the future directions for supply chain management. The Top 5 comprises regulars Apple, Dell, and Procter & Gamble as well as last year's new entrants Research In Motion and Amazon. New entrants this year included food companies Nestle and Kraft, as well as Starbucks. Gartner’s recommendations include developing supply chain processes to deal volatile conditions; ensuring the value chain vision is backed by strong and flexible execution; and gauging the success of the supply chain on the basis of the experiences of customers.
May 21, 2011, to May 28, 2011
Harish Manwani, Unilever chairman and president for Asia, Africa, and East and Central Europe, said, in a long and wide-ranging interview, that his company plans to increase emerging market share of Unilever’s total revenues from 53% to 70%. Unilever views developing and emerging (D&E) markets as mission critical for its future growth and plans to allocate more than 60% of research and development (R&D) and brand-development resources in D&E countries. India has emerged as one of the most important D&E markets for Unilever. At the same time, the country provides the company with a large pool of managerial talent, with some 140 Indian managers currently working in senior positions worldwide. Brazil is an equally important market at the moment, but Russia and China remain among the countries where the company is "relatively under-represented", although they are now the company’s fastest growing markets. Aside from growing its business, Unilever also intends to cut its environmental footprint by half by ensuring that 100% of its raw materials, such as palm oil and tea, come from sustainable sources. Manwani also identifies innovation as key to continuous market development but also highlighted the need to strip out costs as far as possible in order to mitigate the impact of rising commodity prices.
Hindustan Unilever Ltd (HUL) plans to develop a model for joint distribution deals with India's leading telecom companies, banks, and financial services companies to cover some 775 million consumers who live in the country's rural areas. HUL plans to base the planned model on its Project Shakti alternative distribution channel, introducing an outline called, "Gateway to Rural: Beyond FMCG." Also, HUL has begun a pilot project with the State Bank of India involving HUL's Shakti Ammas, or women who sell HUL consumer products in India's rural areas. India's banking policies requiring banks to expand their services to include rural depositors push banks to search for effective means to penetrate rural markets, which offer growth opportunities for banks, mobile telecoms companies, and FMCG companies.
Hindustan Unilever (HUL) estimates that the contribution of modern retail in India was 10% in 2010, from just 5% three years before. In the major cities, the share could be as high as 30%, and it highlights the changing consumer landscape in the country. Companies like HUL tend to gauge brand performance on their shares within modern retail, even if they continue to hold strong positions in general trade. HUL set up a dedicated modern trade account management team in 2003, one of the first FMCG companies in the country to do so. The move to modern retail shopping is being seen also beyond the big metros, in the tier-2 and tier-3 towns. PricewaterhouseCoopers estimates the Indian retailing industry at some $350 billion, and should begin a new growth trajectory as household consumption rises and global retailers arrive to meet demand, encouraged by more liberal conditions for foreign companies seeking joint ventures with domestic companies.