Wal-Mart Persuades P&G, Others to Try Smaller Packaging

Sustainability May Save Money, but Could Hurt Product Performance

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CINCINNATI (AdAge.com) -- Retail behemoth Wal-Mart Stores has decided small is beautiful-and is using its clout to get detergent marketers to see things the same way.

Laundry heavyweight Procter & Gamble Co. is preparing to test doubling the concentration of its flagship Tide and other detergents, thereby cutting package sizes in half, in a move that industry executives and analysts believe stems largely from Wal-Mart's push for environmental "sustainability" -- an effort that could lead to sweeping reductions in packaging throughout the industry.

Spiraling costs
But while Wal-Mart's push ultimately should save marketers and retailers substantial money by cutting now-spiraling energy and packaging costs, it's not a move easily undertaken. And having double and triple concentrates in the market threatens to confuse consumers facing an already dizzying array of detergents on the shelf.

Detergents aren't being singled out by Wal-Mart. In a research note June 5, Banc of America Securities noted that the retailer's executives told shareholders recently that all marketers need to "right size" their packaging and shift to reusable/recyclable materials within two years or risk losing shelf space.

P&G will test the double concentrates across its whole liquid detergent portfolio, which also includes Cheer, Gain and Era, starting in October in Cedar Rapids, Iowa, followed by a national rollout next year, a spokeswoman said. She cited P&G's own sustainability efforts, consumer convenience and retailer interest for the move. The test, she said, will look at how best to market such a major category-wide change to consumers.

Triple concentrates
Unilever's triple-concentrated All Small & Mighty launched late last year, and it's taking a similar step with Wisk this year. That followed the 2004 rollout of the industry's first triple concentrates by stylish Target-oriented household brand Method.

But while a broader industry move has been rumored to be coming for more than a year, people familiar with the industry say it has been hard for P&G to come up with more concentrated versions that maintain the same level of fabric protection.

The P&G spokeswoman said it would be hard to maintain performance with triple concentrates, but that P&G's double concentrates should be as good as or better than existing detergents.

'Consumer confusion'
A Unilever spokeswoman said All and Wisk have sacrificed no performance with their triple concentrates. P&G's decision to move to double instead of triple concentrates could "create some consumer confusion," she said, alongside Unilever's triple concentrates.

Method's concentrates have caught on mainly at Target, and appear to have lost some share since small All hit the market. And some retailer executives say All Small & Mighty hasn't been a big seller. But it has been a big hit with Wal-Mart CEO Lee Scott, who displayed the brand on his desk during an interview with The New York Times last year and has held it out as an example of the sort of sustainability efforts he wants from marketers.
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