P&G Brand Divestitures Will Be Bigger Than Original Targets

Company Says 'Like A Girl' Super Bowl Ad Boosted Always Sales 6%

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Procter & Gamble Co.'s brand divestitures will come bigger and faster than originally anticipated, with the company today projecting they will total 14% of sales, or around $11.5 billion. That's up from the original plan for 10% or $8.2 billion announced in August.

Jon Moeller
Jon Moeller

In a presentation today at the Consumer Analyst Group of New York annual conference in Boca Raton, Fla., P&G Chief Financial Officer Jon Moeller said the company hopes to have "negotiated or announced" the balance of its brand divestitures or discontinuations "as early as this summer, roughly one year from our announcement" and to have completed the of selling, merging or spinning off brands by July 2016.

To date, P&G has announced divestitures or discontinuation of 35 of the 100 brands, from big ones such as Duracell and Iams to much smaller ones, such as the Avril Lavigne fragrance license or the MDVIP concierge physician service.

Those brands have annual sales estimated by analysts at under $6 billion, so the balance of the brand culling could amount to another $6 billion or so.

"The businesses we're exiting are not bad businesses," Mr. Moeller said. "Most simply do not play to our strengths."

Analysts have pointed to brands such as Wella and salon hair care, prestige fragrance, Braun and Scope among candidates for divestiture.

While Mr. Moeller, as has been his habit, talked about the efficiency of digital media, which "in general," he said, "delivers a higher return on investment than TV or print," he said P&G had also seen strong returns by expanding its "digitally enabled" #LikeAGirl campaign from online video to TV via a 60-second Super Bowl ad.

In all, the Always Super Bowl ad generated nearly 4.5 billion free impressions as the brand that got the most tweets and Facebook conversation from the game, he said. It was seen by 50% of the brand's target audience of consumers between the ages of 12 and 24, and had a major impact on sales and retailer support, with in-store promotion by retailers representing 80% of the brand's sales. Always pad weekly sales were up 6% over the average week in the current fiscal year after the ad ran, Mr. Moeller said.

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