P&G readies European invasion for Tide Pods

CINCINNATI - Procter & Gamble Co. will start in western Europe for a global expansion of its unit-dose laundry product, known in the U.S. as Tide Pods.

CEO Bob McDonald told analysts in a conference call Friday that the company built a manufacturing plant to deliver Ariel Pods to European customers starting in April. It’s also upgraded production facilities in the U.S. to the point where it will have “relatively unlimited capacity” here, McDonald said.

Tide Pods is one of P&G’s best product launches in years, grabbing a 6 percent value share of the U.S. laundry market in less than 12 months. Sales in the current fiscal year are projected to reach $500 million.

“It’s gaining consumers from up and down the income spectrum, so even though it might be priced as a premium on a per-wash basis, you've got consumers who would buy lower price brands trading up to that innovation,” McDonald told analysts. “You can just imagine the sales and earnings potential of just that one discontinuous innovation as we expand it around the world.”

BMO Capital Markets analyst Connie Maneaty called the European launch an “encouraging” development because it “suggests you’ve come up with a solution to capacity constraints in the U.S.”

By launching Pods on its Ariel brand in Europe, P&G is playing from strength. Ariel is P&G’s third-largest brand, with global revenue of $4.1 billion, according to a November report by Deutsche Bank.