Tag Archives: Procter & Gamble

An iconic soap with two weird claims to fame — “It floats” and it’s “99+44⁄100% Pure”


New York
CNNBusiness
 — 

Walk into a Walmart, Target, any drugstore chain in your neighborhood or a corner bodega for New York City dwellers, and chances are you’ll find an Ivory Soap bar, or a pack of 10 bars for under $5, sitting on the shelf.

This iconic cake of soap, invented almost 150 years ago, has become a part of Americana largely by advertising its two strange merits: “It Floats” and it’s “99+44⁄100% Pure.”

The original product is a no-frills, plain white, mild-scented bar soap with the name “IVORY” etched into it in script. Impressively, it has stayed exactly that way for 143 years – barring the addition of an Aloe scented variety, and is also still around.

Ivory soap’s longevity flies in the face of a notoriously fickle market for personal beauty products where new trends can appear and disappear in a flash.

So why has Ivory Soap stood the test of time? One theory is because of its clever advertising and branding. Ivory Soap packaging famously, and relentlessly, touts the attributes of purity and buoyancy.

“That’s brilliant execution,” said David Placek, founder of Lexicon Branding, a branding expert who has helped name such popular consumer products as “Swiffer,” “Blackberry” and “Dasani.”

“Just think about it. How many other soaps can you think of that tout an attribute that’s analogous to “It Floats?” said Placek. “I can’t think of another. It makes you remember it because it also makes you think about other soaps that don’t float.”

Because Ivory Soap’s taglines have remained consistent and endured for over a century and through generations of consumers, they’ve seeped into the subconscious, said Placek.

“Even if you’ve not used Ivory Soap you know about it and you remember it,” he said.

Ivory Soap is the brainchild of Procter & Gamble. Not the huge multinational consumer brands conglomerate that it is today, but of two individuals – Harley Procter (son of P&G cofounder William Procter) and James N. Gamble (son of P&G’s other cofounder, James Gamble).

It was in the late 19th century, a period when river bathing was prevalent among large swaths of the population. Now imagine losing your grip on a bar of soap when you’re immersed waist-deep in murky water.

But what if there was a soap bar that could float?

An AdAge article about Ivory Soap’s invention explained how Gamble at the time was trying to create a new type of gently formulated soap. The R&D process inadvertently created a batch of soap that was found to float because air bubbles got trapped inside.

Gamble, according to P&G’s website, recognized the “floating soap” could revolutionize the washing experience in more ways than one.

He initially thought the floating soap could be used both for laundry and for washing up. Over time, the soap bar primarily became a bath soap.

Naming the soap was another story.

According to P&G legend, Harley Procter same upon the word “ivory” while attending church and thought it perfectly fit the new soap’s look and feel and both men adopted “Ivory Soap” as the name.

P&G launched the soap in 1879 hyping it not only as a soap bar that floated but for its purity.

That claim, according to the company, hinged on a study of the soap by chemistry professors at the request of the inventors. One study showed the soap had only a small amount of impurities – 56/100 of a percent – of a non soap material in it.

So they decided to play that up in Ivory Soap’s advertising, rounding it up to create its second iconic tagline – “99 and 44-100% pure.”

P&G maintains that while it continues to innovate its Ivory Soap, the product is still made with a simple formula free of dyes and parabens meant to gently cleanse the skin.

It has, however, extended the brand to other products.

In the 1950s, according to the AdAge article, P&G launched a light-duty dishwashing detergent under the Ivory brand, followed by liquid hand soaps in the 1980s and moisturizing body washes in 1996 with the introduction of Ivory Moisture Care. Today, the Ivory personal care portfolio also includes baby care products, hair and body washes and deodorant.

Ivory soap has become so iconic that in 2001 P&G donated a collection of its Ivory Soap artifacts to the Smithsonian Institution, including its earliest advertising and a bar of unused soap from the 1940s.

Lexicon Branding’s Placek said Ivory Soap is a product way ahead of its time. “It was ‘pure’ before pure, clean and simple products became as popular as they are with consumers today,” he said.

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Procter & Gamble Sounds a Warning After Strong Quarter

Procter & Gamble Co.

PG -6.18%

, maker of Tide detergent and Pampers diapers, is predicting the slowest sales growth in years as consumer belt-tightening is beginning to hit household staples.

The outlook comes after the Cincinnati-based consumer-products giant on Friday reported its biggest annual sales increase in 16 years because of the price increases that it placed on mainstays from toothpaste to toilet paper.

P&G’s organic sales, a closely watched metric that strips out deals and currency moves, rose 7% for the year ended June 30, the most since 2006. Shoppers paid substantially higher prices.

But consumers are beginning to cut back amid mounting inflation, executives said. They are using up products they stockpiled during the pandemic or holding off on replenishing supplies. Sales volumes declined 1% in the most recent quarter.

“For us, the downturn is not yet visible,” P&G finance chief

Andre Schulten

said. “We’re also not naive, we see the pressure on the consumer.”

P&G expects organic sales growth of 3% to 5% for the current year, the lowest since 2019 when the company notched a 5% increase. The company predicts consumer-goods industry growth will slow by a percentage point or more from the last fiscal year’s 5% growth.

P&G Chief Executive

Jon Moeller

said in an interview that consumers are beginning to shift to cheaper, private-label alternatives, a trend already under way in food and beverages. He called the shift small but noticeable.

Mr. Moeller said he is confident that growth, though more muted relative to the past few years, will remain solid as high employment levels coupled with healthy household balance sheets enable consumers to keep spending on necessities while they cut costs elsewhere.

“There is no inherent reason why people are just going to stop buying modestly priced consumer products, daily-use essentials where performance matters,” he said. “You have to look elsewhere to get signals of consumer stress.”

The consumer-sentiment index and the consumer-confidence index both try to measure the same thing: consumers’ feelings. WSJ explains why the Federal Reserve is keeping a close eye on consumer confidence in 2022. Illustration: Adele Morgan

P&G shares fell more than 6%.

P&G’s results and outlook largely echo the messages coming from other big consumer brands. Companies including

Coca-Cola Co.

,

McDonald’s Corp.

and

Kimberly-Clark Corp.

this week reported sales gains driven by higher prices, and executives said they would keep passing along increased costs to shoppers for now. Yet some executives also said consumers are starting to show signs of stress, trading down to cheaper brands or cutting back on how much they buy.

The world’s biggest consumer packaged goods company by sales, P&G has largely outpaced competitors amid the pandemic, especially in the U.S.

Rivals are showing signs of gaining ground.

Colgate-Palmolive Co.

on Friday said it now expects bigger-than-expected organic sales gains, predicting an increase of 5% to 7% for the calendar year, up from 4% to 6%. Last week,

Kimberly-Clark

and

Unilever

PLC also raised sales outlooks for the calendar year.

Church & Dwight Co.

Chief Executive

Matthew Farrell

said on Friday that demand is accelerating for low-cost laundry detergent, while people are giving up electric toothbrushes for manual options. “Consumers are making choices to make their budget stretch further,” he said.

A central question is how consumers and retailers respond to further price increases. P&G said Friday that it had announced to retailers another round of price increases, in mid-single-digit percentages, which will take effect toward the end of summer.

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P&G, after more than four years of market-share gains, lost share in the four-week period ended July 16 compared with a year ago, Bernstein analyst Callum Elliott said in a research note analyzing retail data. Losses are in every category except for beauty, he said.

“While prices spiral, the consumer also continues to adjust to the new reality,” he said.

Mr. Moeller said P&G continues to gain market share broadly in the U.S. and globally.

Organic sales rose 7% in the quarter ended June 30, with prices up 8% on average. P&G attributed the 1% decline in sales volume primarily to Covid-related shutdowns in China and intentional downsizing of its business in Russia amid the war in Ukraine.

P&G reported $19.5 billion in revenue for the quarter, up 3% from a year ago. Diluted net earnings per share were $1.21, up 7%.

The company expects diluted net earnings per share will be between flat and up 4% for the fiscal year as it faces an anticipated $3.3 billion hit tied to foreign-exchange rates and higher costs for materials and freight.

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Procter & Gamble Says Prices Will Keep Going Up

Procter & Gamble Co.

PG 3.36%

is betting the world’s consumers will remain undeterred by higher prices on household staples from Pampers diapers to Gillette razors.

The Cincinnati-based consumer-products company said sales increased 6% in the quarter ended Dec. 31 compared with a year earlier, fueled in part by the company’s largest average price increases since the spring of 2019.

Executives on Wednesday said its price increases will continue throughout 2022, and predicted higher profitability and improved margins in coming quarters even as labor, freight and raw-materials costs continue to balloon due to the global supply-chain turmoil.

“The consumer is very resilient and very focused on these categories of clean home and health and hygiene,” P&G finance chief

Andre Schulten

said in an interview.

P&G shares gained more than 3% Wednesday to close at $162.

U.S. inflation in 2021 hit its fastest pace in nearly four decades, as pandemic supply-and-demand imbalances pushed up prices on everything from used cars to household staples.

Pricing on average rose 3% in the latest quarter, P&G said, and price increases accounted for half of the company’s revenue growth in the period. Higher volumes accounted for the other half. P&G reported revenue of $21 billion for the quarter.

The added revenue helped offset soaring prices for raw materials, labor and transportation of goods, as supply-chain woes continue to weigh on almost every industry.

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P&G’s core earnings per share rose 1%, to $1.66, from the same period a year earlier. Margins fell despite the added revenues and cost cutting. The company has spent big to keep factories running and products in stock as much as possible, said Chief Executive

Jon Moeller,

who took over the company in November.

On Wednesday, executives said there is no relief in sight from higher costs for labor, transportation of goods and raw materials such as fuel, resin and pulp. “The flexibility that we’ve talked about that our supply people have generated doesn’t come for free,” said Mr. Schulten, the CFO. “When we need to shift to alternate materials, when we need to shift to alternate suppliers, all our sources of materials geographically, that comes at a premium.”

P&G, which has posted more consistent sales gains than rivals throughout the pandemic, raised its revenue forecast for the fiscal year ending June 30, even as the company said costs will be higher than previously projected.

P&G said it expects to commit $2.8 billion more to commodity, freight and foreign-exchange costs this fiscal year. The figure is about $500 million more than it forecast last quarter. Its earnings estimates remained unchanged.

As the cost of groceries, clothing and electronics have gone up in the U.S., prices in Japan have stayed low. WSJ’s Peter Landers goes shopping in Tokyo to explain why steady prices, though good for your wallet, can be a sign of a slow-growing economy. Photo: Richard B. Levine/Zuma Press; Kim Kyung Hoon/Reuters

Mr. Schulten said that in addition to absorbing higher prices, consumers also are switching to pricier, higher-end products, such as trading liquid laundry detergent for costlier single-dose pods.

A broad range of consumer-products companies, including P&G rivals

Unilever

PLC and

Kimberly-Clark Corp.

, have implemented price increases to offset higher costs amid snags in the global supply chain.

The recent rise in Covid-19 cases due to the fast-spreading Omicron variant didn’t spur the kind of hoarding behavior that led to shortages of toilet paper, cleaners and other products during previous surges, he said.

Sales jumped for products to treat respiratory issues, driving a 20% revenue increase for P&G’s personal-health unit, which includes Vicks and NyQuil brands.

P&G now expects organic sales, which strips out deals and currency moves, to grow 4% to 5% for the fiscal year, up from the previous forecast for growth of 2% to 4%.

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Corrections & Amplifications
“The flexibility that we’ve talked about that our supply people have generated doesn’t come for free,” said P&G finance chief Andre Schulten. “When we need to shift to alternate materials, when we need to shift to alternate suppliers, all our sources of materials geographically, that comes at a premium.” An earlier version of this article incorrectly attributed the quote to Chief Executive Jon Moeller. (Corrected on Jan. 19)

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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