Procter & Gamble believes it is “well positioned to serve the heightened needs and new behaviours of consumers” thanks to the groundwork it laid ahead of the crisis and its ongoing investment in innovation.
Speaking on a call with analysts following its Q3 results, CFO Jon Moeller said: “We will manage what could be a volatile short- to mid-term, consistent with the strategy we’ve outlined many times again this morning, and against the immediate priorities of ensuring employee health and safety, maximising availability of our products to serve cleaning health and hygiene needs, and helping society overcome the challenge of this crisis.”
The FMCG giant said its strategy to focus on “superiority, productivity, constructive disruption and improving P&G’s organisation and culture” is helping deliver “balanced growth” and create long-term value.
Moeller bullishly stated P&G has “raised the bar” in all aspects for “superiority” against rivals, pointing to work done on product packaging, brand communication and retail execution of value across categories.
“Superior offerings delivered with superior execution drive market growth. Leading category market growth and superior offerings mathematically builds market share and builds business for our retail partners. We continue to invest in and behind superior offerings,” he said.
We’re stepping forward not back, we’re doubling down to serve our consumers and our communities.
Jon Moeller, P&G
The company has invested in refreshing packaging of existing products and launching new ones, for example, and Moeller said the FMCG giant is focused on boosting daily use product categories where “performance plays a significant role in brand choice”.
He said innovations contributed to more than 35% market growth for certain categories online.
As an example, P&G improved the absorbency and comfort of its Pampers nappy range, which is communicated to consumers via packaging and in-store displays.
“We’re stepping forward not back, we’re doubling down to serve our consumers and our communities. We’re doing this in our interests, in society’s interests and the interests of our long-term shareholders,” he added.
P&G noted ecommerce sales were up by about 50% and now represent 14% of global sales. Despite the bright spot ecommerce proved to be, Moeller argued bricks-and-mortar stores are still critical to ensure its brands remain competitive in markets that are loosening Covid restrictions.
But the company said it will continue innovating in ecommerce to ensure it maintains an edge.
“We need to tailor offerings in a way that best serve ecommerce and digital commerce. An example of one of the things we’re working on is packaging, particularly for liquid products, ensuring those products survive the journey to a consumer’s home,” said Moeller.
Net sales for the quarter grew 5% year-on-year to $18.1bn (£13bn), driven by organic sales increasing by 4%.
Beauty products were the highest driver of sales, with a growth rate of 9%, which itself was driven by P&G’s super-premium brands and innovations in them, as well as increased pricing.
Its fabric and home care division grew by 8% due to increasing demand for cleaning products under stay at home orders.
“We’re growing the top line of 5%, we’re growing the bottom line in high singles. We’re very strong with the current strategy, a portfolio of leading brands in daily use categories for performance-driven brand choice. [We’re] a very effective, highly competent organisation, executing against that strategy,” concludes Moeller.