Clorox CEO Promises In-Store 'Excitement'

Q&A: Former Coke Prez Knauss Discusses His Ad Plans for $4.6 Billion Company

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CINCINNATI (AdAge.com) - In moving from president of Coca-Cola North America to chairman-CEO of Clorox Co., Donald R. Knauss, 55, moves to a marketer that might not have the cachet or the iconic status of Coke, but is a bigger spender in measured media, shelling out $485.5 million to Coca-Cola's $471 million last year, according to TNS Media Intelligence. Coke spends more on marketing overall, when consumer, trade and event promotion is added in, and in an interview, Mr. Knauss reveals he already has plans to raise the $4.6 billion Clorox's profile through trade marketing.

One of the analyst notes last week mentioned the possibility for disruption as an outsider is brought into a company that traditionally brought CEOs up through the ranks.

Any success I've had is because I've listened to people. Any leader who creates an environment where people can debate and discuss, you're going to get better results. It's about the team. It's not about me.

At Coca-Cola, there's a history of having several agencies that change from time to time. At Clorox, there's a long and deep relationship with DDB at this point. Do you anticipate any changes based on the way Coke and Clorox have operated?

No, I don't anticipate any changes. In fairness to me and the organization and the agencies, having a chance to get on the ground and work with people and talk to the marketing organization and really understand what's going on will be critical. So I think it's just too early for me to speculate on that. If there is terrific advertising and consumer communication being developed, that's what I care about.

You have a lot of experience in sales and field marketing. Is that a very different perspective for Clorox, or has there always been a fairly strong involvement from the sales side in senior management?

I think there has been. ...When Coca-Cola calls on a retailer, you typically get access. I have a lot of deep relationships with these retailers and think that I can add value to what they already have at Clorox.

One of the things I've learned in the past few years is that involving retailers at a senior level in the innovation-thought process can really drive innovation. And getting retailers involved and exposing them to what you're thinking about 18, 24, 36 months down the road is incredibly important. I think I can bring some of that retailer interest in helping participate with us and helping us figuring out how to grow categories.

[Retailers] don't care if you swap share with the next guy. What they care about is, are you growing the category and bringing excitement to their stores and taking waste out of their supply chain? And if you're doing those things, they love you. And if you don't, you're probably not going to be on the shelf very long.

At Coke, it looks like the broader trend was toward slowing carbonated-beverage sales and a shift to other beverages that come at a higher price per ounce. Do you see a similar sort of trend for Clorox?

I do. If you look at some of the recent examples like [the Clorox] bleach pen, where you capitalize on some of these trends around [lifestyle] and broaden the footprint of these brands, you clearly have a mix play where you can drive enhanced margins. ... While volume is very important, revenue is even more important today. We take dollars to the bank. So many people are under such time pressure, that money is not the key obstacle. It's convenience. And when you've got well-respected brands like Clorox, the ability to broaden those brands' footprints is significant.

When the joint venture between Coca-Cola and P&G was proposed, you were slated to be the CEO of that operation. Is that correct?

I was slated to be CEO of the North American piece.

Any regrets on that not going through?

No. I'm not sure the combination of Pringles and Sunny Delight with Minute Maid would have been a great deal. I didn't really see the synergies there. And I think what was going on at the time at Minute Maid was that we were really starting to grow that brand by integrating it into the bottling system. It traditionally had been a warehouse-delivered take-home product. And we really started to explode the growth of it. I don't think the trends on Sunny Delight and Pringles were going the same direction. I think everyone came out in the right place on that in the end.

Where do you see growth potential for Clorox?

What excited me was the potential for growth of [Clorox's No. 1 and No. 2] brands. ... When I look at the macro trends that are going on out there with consumers around health and wellness, sustainability and convenience and also the ethnicity changes in the U.S., with the Hispanic growth, I think those brands match up very well with those trends.
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