P&G leads the pack in personal care

Food & Drug Packaging, July, 2005 by Kate Bertrand

The No. 1 personal care packaging company on this year's "Top 200" list, The Procter & Gamble (P&G) Co., markets consumer packaged goods that include skin and hair care brands, teeth whitening products and cosmetics.

With brands like Cover Girl, Herbal Essences, Safeguard and Old Spice, the company has shifted its overall product mix in the direction of health and beauty care in recent years; today, these businesses represent almost half the company's sales and profit.

The company's attention to the personal care market is reflected in its agreement to acquire The Gillette Co., announced this January. The transaction, valued at roughly $57 billion, is the largest acquisition in P&G history. When the acquisition is completed this fall, P&G will acquire all Gillette facilities, including manufacturing.

The product portfolio of the combined company will include 21 billion-dollar brands. P&G alone has 16 billion-dollar brands, including Olay, Crest and Head & Shoulders. P&G's Pantene is a $2 billion brand.

To accommodate the recent, robust growth of its beauty and health care businesses, P&G reorganized in mid-2004 to create three business units of equivalent size: Global Beauty Care; Global Health, Baby and Family Care; and Global Household Care. Separately, in June 2005, the company closed its online cosmetics company, Reflect.com.

P&G's packaging function continues to deliver innovative designs. The expanding Olay product line provides several examples of P&G's packaging philosophy, which stresses a balance of design aesthetics, functionality and cost effectiveness.

Packages for Olay Quench Body Lotion, a product introduced in North America in early 2005, include a tottle and a pump-dispenser bottle. All the packages feature a unique sloped shoulder and periwinkle color. The Olay Quench package design "is very distinctive, but it also uses available technology and is quite cost effective," says Peter Hargraves, section head for skin care global package development at P&G. He adds that the Olay Quench packaging's "eye-catching design has helped to attract consumers. In the supermarket or drug store, within the personal care shelf sets, there are lots of small products crowded together. You need every advantage just to get noticed, even by consumers who know what they want."

Hargraves says packaging for the Olay products is representative of the P&G.increasingly design-oriented culture at The company's CEO, A.G. Lafley, has nurtured the focus on design since taking office five years ago. Previously, he had been in charge of P&G's Asia operations.

While in Asia, Lafley developed an appreciation for the important role design plays in marketing consumer goods. "A.G. Lafley came back and decoded that for P&G in the North American market," Hargraves says. "It's a different way to look at the marketing of personal care products."

Hargraves adds that today, Olay's "packaging aesthetics are approaching those of similar products sold in department stores, even though Olay is sold in the self-select market. The Olay products are presented in a way that communicates that they deliver premium performance."