A. G. Lafley
Hide Caption

Procter & Gamble (PG) looking to sell under-performing business units

Analyst: Pet care division will be first to go

a a a a
Share this story
Show Related Headlines
Related Articles
P&G: Pet food recalls won't deter growth
P&G expands pet food recall
New pet care mirrors human medicine

CINCINNATI - Procter & Gamble Co. is looking to sell under-performing business units, CEO A.G. Lafley told analysts Wednesday morning.

“Already been through the portfolio in detail, already discussed with the management team, already discussed more than once with the directors and board. We’re on it,” Lafley said at the Barclay's Back-to-School Conference in Boston. “We know what doesn’t fit strategically and what does. We know what’s under performing and what's performing."

Also during the call, Lafley announced that P&G's Tide brand will launch a new lower-priced version of its liquid detergent.

Tide Simply Clean and Fresh will be launched in February and will be priced in the mid tier of laundry products, where Lafley said P&G is "underdeveloped with a 30 percent share."

Tide is the nation's largest laundry brand, with annual sales of $4.5 billion. Critics have complained that Tide lost share to cheaper laundry products during the recession because its products carried premium prices. Lafley said the new lower-priced Tide will cost about 25 percent less than its premium products. It's a strategy that P&G used successfully to gain market share with Bounty Basic and Charmin Basic lines.

"Consumers have different needs and wants," Lafley said. "We aim to meet their needs with brands and products they prefer and can afford."

On the divestiture issue, Lafley declined to name any business units that could be sold, but said they will involve products that on a combined basis represent less than 10 percent of P&G sales.

“Most of our businesses that we developed in the last 10 or 20 years are now core and probably represent 90 plus percent of what we have and we’re looking at the rest,” he said. “There will be a few moves that will be obvious and we’ll announce them when it’s the appropriate time and there are always a few businesses that are on what I would call a watch list.”

Analysts have long speculated on possible divestitures at P&G, including Duracell batteries and its Iams and Natura brands of pet care products. The pet care division is the last business unit that produces food at P&G. As WCPO has reported, the pet care division has endured a string of product quality issues, including several recalls of dry pet food because of possible salmonella contamination.

Other products, including Jif peanut butter, Pringles potato chips and Folgers coffee, were long ago pruned from the portfolio.

Bernstein Research analyst Ali Dibadj thinks pet care is the mostly likely divestiture, but he considers Duracell batteries, Braun shaving products and consumer tissue brands to be candidates for sale.

"Pet has done badly," said Dibadj, who predicts it will be sold "as soon as they can get a good price."

Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Print this article

Comments

Hmm... It looks like you’re not a WCPO Insider. or Subscribe now to contribute!

More P&G News
WCPO Analysis: Tax bills of Cincinnati companies
WCPO Analysis: Tax bills of Cincinnati companies

WCPO asked S&P Capital IQ to help us analyze how much Cincinnati companies pay in taxes. How much did your favorite company pay? The…

Choremonster launches new app and strategy
Choremonster launches new app and strategy

Choremonster is launching a new version of its app, which parents can use to give their kids rewards for doing household chores.

Protesters likely got in via auxiliary building
Protesters likely got in via auxiliary building

Procter & Gamble says it is improving security after a simple entry set off an elaborate, well-orchestrated demonstration on the…

From Greenpeace to PETA: Why P&G is targeted
From Greenpeace to PETA: Why P&G is targeted

Activists describe what it's like to engage the Ivory Empire in a public relations battle.

Cincinnati companies on a buying binge
Cincinnati companies on a buying binge

Some experts are predicting a breakout year for mergers and acquisitions. Cincinnati-based companies have no intention of missing out. 

P&G raising Tide prices in stealthy way
P&G raising Tide prices in stealthy way

P&G is increasing the cost on some fancier Tide varieties by as much as 25 percent to compensate for the introduction of a lower-end…

The next place to tattoo: Your hair?
The next place to tattoo: Your hair?

Fourteen months ago, Procter & Gamble promised "disruptive solutions" would emerge from a retooling of its research and…

P&G brand puts new twist on Super Bowl ad hype
P&G brand puts new twist on Super Bowl ad hype

Did you hear about the Old Spice Super Bowl contest? P&G brand puts a new twist on Super Bowl commercial hype.

P&G introduces dessert-flavored toothpastes
P&G introduces dessert-flavored toothpastes

Combining dessert and oral hygiene might not seem like an ideal pairing, but Procter & Gamble Co. would disagree.

Hey ladies: New P&G beauty products aimed at you
Hey ladies: New P&G beauty products aimed at you

Procter & Gamble is starting the year with a host of new beauty products, aimed at reversing a slump in market share and sales growth.

Market Summary
The Dow Jones Industrial Average SM is proprietary to and is calculated, distributed and marketed by Dow Jones Indexes, a licensed trademark of CME Group Index Services LLC and have been licensed for use. "Dow Jones(r)", "Dow Jones Indexes" and "Dow Jones Industrial Average SM" are service marks of Dow Jones Trademark Holdings, LLC. "CME" is a trademark of Chicago Mercantile Exchange Inc. All content of the Dow Jones Industrial Average (c) CME Group Index Services LLC 2010.