P&G Delays Tide Pods Launch Until 2012, Citing Heavy Demand Forecasts
Procter & Gamble Co. is putting its high-profile launch of Tide Pods liquid laundry tablets, originally set for September, on hold until early next year, saying it needs extra time to meet strong projected demand for what it bills as the biggest new thing in laundry in a generation.
The move should allow P&G to avoid production bottlenecks and rationing that in recent years have kept launches such as Gillette Fusion ProGlide from realizing their full potential as fast as they would have. P&G this spring has ramped up spending on ProGlide after slowing it down late last year in the face of production constraints.
"We have experienced unprecedented demand for distribution of Tide Pods, and since we would like to be sure that all our consumers and customers will have instant access to the breakthrough product as of the launch date, we have adjusted our launch timing," a P&G spokeswoman said in an email.
Production is proceeding well, she said, but it was the strength of demand that led to the decision to hold off distribution.
The move also means P&G will be shifting spending on what was expected to be a $150 million launch from the third and fourth quarters into the first quarter of 2012. Publicis Groupe 's Saatchi & Saatchi, Digitas and Starcom MediaVest Group handle advertising, digital and communications planning, and media buying, respectively, for Tide.
Retailers, the P&G spokeswoman said, "were disappointed to hear that news as they have high expectations on the product launch potential but at the same time they were understanding of the situation."
P&G already had convinced some retailers to change category resets from their usual August time frame to September, according to people familiar with the matter.
In an interview last month, P&G VP-North American Fabric Care Alex Keith said Pods had gotten the highest consumer satisfaction scores ever in testing for a laundry product.
"We've seen phenomenal after-use results" in consumer testing with Pods, Ms. Keith said, with 25- to 40-percentage-point increases from pre- to post-use in satisfaction scores on such factors as "provides a deep-down clean, removes difficult stains" and "provides excellent results with minimal time and effort." On that last point, P&G saw a 40-point improvement to 97% of consumers tested agreeing with the statement, Ms. Keith said.
But pushing distribution back another four months or so opens a window for competitors, who weren't planning similar products this year, to launch simultaneously or even before P&G.
One person familiar with the matter said contract manufacturers that specialize in producing water-soluble tablets for dishwashers, and whose lines could be adapted for similarly configured laundry products, have been seeing stepped-up interest from P&G competitors.
Sanford C. Bernstein analyst Ali Dibadj said he expects such companies as Church & Dwight Co. (marketer of Arm & Hammer), Henkel (marketer of Purex) and Unilever-backed Sun Products (maker of All, Wisk and a wide array of private labels) to speed up plans for competing entries and possibly even try to beat Tide to market.
P&G, Henkel and Unilever already sell similar highly condensed liquid-filled laundry tablets in Western Europe, though they're formulated differently than the three-chamber Tide Pods. Results from the U.K., where such products have helped tablets top 30% of the category, led P&G to project Pods could spawn similar results -- and a multi-billion-dollar market -- in the much-bigger U.S.
January and February are months when several other P&G personal-care product categories also generally have launches, which could spread the company's resources thinner at a time when competitors, who unlike P&G mainly operate on a calendar fiscal year, have fresh marketing budgets.
Mr. Dibadj said the move seems to signal some "overconfidence" at P&G about its ability to meet demand and raises questions about whether the company, in an effort to control costs and cash, has been investing too little in manufacturing capacity.