P&G's packaging initiatives are driving billion dollar sales success: innovation in package design enhance product performance

Food & Drug Packaging, July, 2004 by William Winkler

Procter & Gamble is a recognized leader in the development, distribution and marketing of superior Fabric & Home Care, Baby Care, Feminine Care, Family Care, Beauty Care, Health Care and Snacks & Beverages products.

With contributions from: Jim Monton, Director of Beauty Care Science: Paul Sheppard, Associate Director, Cosmetics & Fragrances; Cheri Stevenot, Associate Director; Deodorants & Personal Cleansing,; Rich Baginski, Associate Director; Skin Care Packaging & Development

Q: What were your top achievements in 2003 in business and packaging?

A: Beauty care has been extremely strong across all units--hair care, skin care, cosmetics, personal cleansing and deodorants--contributing to total company sales of $50 billion, which is a 27% increase since 2001.

In Beauty Care, over the last several years, we've sustained double-digit growth in volume sales and earnings. This suggests how well we're winning with the consumer. Last year we added a $1 billion brand, Olay, and this year Head & Shoulders is our newest $1 billion brand. Pantene has just surpassed $2 billion. So we're really proud to have a stable of brands that are showing sustained growth.

Over the last 15 years we took Pantene, which was a niche brand, and built it into a global powerhouse. The new package, introduced in 2000, is a global package design that has allowed us to leverage that brand's equity and growth.

Our Pantene Japanese business has experienced significant growth this past year. This is due in part to the new packaging. We used the same package, but dialed up the pearlescent color to a bright white with gold accents and that really made it stand out on the shelf and achieve a new image. We've also added refills, which are popular in Japan. That has also added to the line's growth.

The most recent addition is the Relaxed and Natural line, targeted for African-American consumers. We took the same package and delivered it in a different set of colors to that target group. It has exceeded expectations. We've also introduced the Daily Moisture Renewal and Full and Thick Lines, building off the same package but leveraging gold and black graphics.

Herbal Essences, very familiar to North American consumers, has sustained wonderful growth in Europe, China, Southeast Asia and, most recently, Japan. We acquired that from Clairol and it's just a terrific packaging design that has allowed us to leverage it around the world with sustainable growth. Herbal Essences has really set the trend for packaging on the shelf over the last five years.

Our newest $1 billion brand, Head & Shoulders had a wonderful expansion in Korea and is now the #2 brand in the country. Again, we're expanding solid global packaging designs, both aesthetic and technical.

The relaunch of Aussie, another Clairol acquisition, really stands out on the shelf with its bright violet packaging. It has sustained nice growth this past spring and we're very proud of it.

In Skin Care, Olay is our crown jewel. This past year we launched Regenerist, which builds on the previous success of Total Effects and creates a multi-tier line. The package design and graphics have really helped make Olay the #1 facial moisturizer and cleanser.

Cosmetics has also had nice initiatives in the packaging arena. Max Factor Lipfinity and Cover Girl Outlast Lipsticks have both had new primary and secondary packaging, which have really helped build those brands, also complemented by Fantastic Lash mascaras.

Deodorants have really perked up over the last few years, a lot due to packaging. Old Spice High-Endurance Invisible Solid uses co-injected packaging technology to leverage the male design on that brand. Our Secret brand is also quite innovative. Secret Platinum Peach Simmer uses holographic labeling and it's really targeted towards teens. We also have new ergonomic roll-on packaging for the Latin American market.

In the Personal Cleansing category, we've now got Olay Moisturinse, a moisturizing body rinse in the shower. We're trying to expand the personal cleansing market and that's doing very well.

Q: What industry issues concern you and why?

A: The clutter and confused shelf is high on our radar screen. Shopping is difficult for the consumer. It's hard for them to find what they want and break through the clutter. Our challenge in packaging is to reinforce our equity, stand out on the shelf and be transparent--that is, easy to find, easy to understand.

Behind the scenes, our customer distribution systems are another concern. They're getting increasingly sophisticated, higher speed and lower cost and, because of that, they can be more damaging to our packaging. The damage rate is becoming an increasing problem. We're working hard with our customers on this.

Q: What are the trends in your market and how is your packaging addressing them?

A: A.G. Lafley, our chairman, repeatedly says, "Innovation is the life blood of any business but especially the beauty business. The consumer is the real boss and the end users of our brands. P&G and retailers can collaborate a lot more to deliver a better shopping experience. At P&G, we are choosing to work with leading retailers to reinvent the beauty shopping experience."