“This would be an entirely new product category for P&G. And we know that P&G have a commitment to only developing Billion Dollar Brands!”
You may be right in that assumption. Back in June 2014 Jon Moeller, CFO at Procter & Gamble made these comments
P&G set to enter 'new category' June 18, 2014, Jon Moeller, CFO of Procter & Gamble, said the company will enter a new categoryin the next six months.
Procter & Gamble Co. plans to enter a new consumer product categorywithin six months. While a significant upfront investment has been required, it could pay off by “moving the needle” on sales, CFO Jon Moeller announced today.
Moeller, speaking during the 11th annual Deutsche Bank Global Consumer Conference in Paris, wouldn't provide details of the product category. P&G is known for brands such as Tide laundry detergent and Crest toothpaste.
P&G’s brands span 35 categories of products in North America, and the new category is expected to align with its core categories – which include baby care, feminine care and men’s grooming.
He did say the new category would exemplify the Cincinnati-based company’s "commitment to innovation," which Moeller said is key to improving P&G’s performance as well as creating value for shareholders, retail partners and consumers.
“When you enter a new category, you’re typically investing a fair amount of money,” Moeller said. That’s something “you wouldn’t be doing unless you expected to be able to move the needle.”
Pouring money into the development of the product wouldn’t “materially affect our ability to deliver on our commitments,” Moeller said. “It would be a reinvestment of some of the productivity savings” that P&G began under former CEO Bob McDonald and has continued with new cost-cutting measures implemented by current CEO A.G. Lafley.
P&G has spent yearsworking on the new product category, Moeller said.
“Innovation, generally, in the consumer products base is a longer endeavor than most investors probably would appreciate or understand,” Moeller said. “I don’t know the exact period of time that the specific category entering (product) has been in the pipeline, but it’s certainly been multiple years.”
Moeller added that refinements to existing household products are also in the works at Procter & Gamble
“We’re pleased with the innovation progress we’re making and are excited about what follows,” Moeller said. “While it’s too early to name them, we will, in the next six months, enter a new category for P&G, introduce a new and far superior method of addressing a chronic consumer issue, and will improve existing offerings in meaningful ways that cumulatively build consumer preference. …
“We’re looking at both the entry of new categories as well as the creation of new categories as a way to build our business,”Moeller said. “And that’s particularly important and relevant in an environment of slow market growth.”
Although this isn’t conclusive proof that the “New Category” relates to OBJ’s technology I have wondered if the new category “is” OBJ’s technology “related”. And if this is the case we are in for one hell of a ride. A new category specific – could only happen with P&G
OBJ Price at posting:
9.1¢ Sentiment: Buy Disclosure: Held
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