The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble.[2] It specializes in a wide range of personal health/consumer health, and personal care and hygiene products; these products are organized into several segments including Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine, & Family Care. Before the sale of Pringles to Kellogg's, its product portfolio also included food, snacks, and beverages.[3] P&G is incorporated in Ohio.[4]
In 2014, P&G recorded $83.1 billion in sales. On August 1, 2014, P&G announced it was streamlining the company, dropping and selling off around 100 brands from its product portfolio in order to focus on the remaining 65 brands,[5] which produced 95% of the company's profits. A.G. Lafley—the company's chairman, and CEO until October 31, 2015—said the future P&G would be "a much simpler, much less complex company of leading brands that's easier to manage and operate".[6]
David S. Taylor is the current chairman and CEO of P&G.
Origins
Candlemaker William Procter, born in England, and soapmaker James Gamble, born in Ireland, both emigrated from the United Kingdom. They settled in Cincinnati, Ohio, initially and met when they married sisters Olivia and Elizabeth Norris.[7] Alexander Norris, their father-in-law, persuaded them to become business partners, and in 1837 Procter & Gamble was created.
In 1858–1859, sales reached $1 million. By that point, about 80 employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products.
In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floated in water.[8] The company called the soap Ivory.[8] William Arnett Procter, William Procter's grandson, began a profit-sharing program for the company's workforce in 1887. By giving the workers a stake in the company, he correctly assumed that they would be less likely to go on strike.
The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well, and in 1911 began producing Crisco, a shortening made of vegetable oils rather than animal fats.[8] As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs.
International expansion
The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Thomas Hedley Co.,[8] based in Newcastle upon Tyne, England. After this acquisition, Procter & Gamble had their UK Headquarters at 'Hedley House' in Newcastle upon Tyne, until quite recently, when they moved to The Heights, Brooklands. Numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced Tide laundry detergent in 1946[9] and Prell shampoo in 1947.[10] In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as Crest.[8] Branching out once again in 1957, the company purchased Charmin paper mills and began manufacturing toilet paper and other tissue paper products. Once again focusing on laundry, Procter & Gamble began making Downy fabric softener in 1960 and Bounce fabric softener sheets in 1972.[11] From 1957 to 1968, Procter & Gamble owned Clorox, the leading American manufacturer of liquid bleach; however, the Federal Trade Commission challenged the acquisition, and the U.S. Supreme Court decided against P&G in April 1967.[12]
One of the most revolutionary products to come out on the market was the company's disposable Pampers diaper, first test-marketed in 1961, the same year Procter & Gamble came out with Head & Shoulders.[13] Prior to this point, disposable diapers were not popular, although Johnson & Johnson had developed a product called Chux. Babies always wore cloth diapers, which were leaky and labor-intensive to wash. Pampers provided a convenient alternative, albeit at the environmental cost of more waste requiring landfilling. Amid the recent concerns parents have voiced on the ingredients in diapers, Pampers launched Pampers Pure collection in 2018, which is a "natural" diaper alternative.[14]
Further developments
Procter & Gamble acquired a number of other companies that diversified its product line and significantly increased profits. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton's Old Spice, Max Factor, the Iams Company, and Pantene, among others. In 1994, the company made headlines for big losses resulting from levered positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions that they were not capable of understanding. In 1996, P&G again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Also known by its brand name 'Olean', Olestra is a lower-calorie substitute for fat in cooking potato chips and other snacks.
In January 2005, P&G announced the acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place.[15] This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight,[16] and Gillette's Rembrandt toothpaste line to Johnson & Johnson.[17] The deodorant brands Right Guard, Soft and Dri, and Dry Idea were sold to Dial Corporation.[18] In 2001, Liquid Paper and Gillette's stationery division, Paper Mate, were sold to Newell Rubbermaid. The companies officially merged on October 1, 2005. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.[19]
P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study.[20] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another.[21]
On August 25, 2009, the Ireland-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3.1 billion.[22]
P&G exited the food business in 2012 when it sold its Pringles snack food business to Kellogg's for $2.75 billion after the $2.35 billion deal with former suitor Diamond Foods fell short.[23] The company had previously sold Jif peanut butter, Crisco shortening and oils, and Folgers coffee in separate transactions to Smucker's.
In April 2014, the company sold its Iams pet food business in all markets excluding Europe to Mars, Inc. for $2.9 billion.[24] It sold the European Iams business to Spectrum Brands in December 2014.[25]
Restructuring
In August 2014, P&G announced it was streamlining the company, dropping around 100 brands and concentrating on the remaining 65, which were producing 95% of the company's profits.[5]
In March 2015, the company divested its Vicks VapoSteam U.S. liquid inhalant business to Helen of Troy, part of a brand-restructuring operation. This deal was the first health-related divestiture under the brand-restructuring operation. The deal included a fully paid-up license to the Vicks VapoSteam trademarks and the U.S. license of P&G's Vicks VapoPad trademarks for scent pads. Most Vicks VapoSteam and VapoPads are used in Vicks humidifiers, vaporizers and other health care devices already marketed by Helen of Troy.[26]
Later that same year in July, the company announced the sale of 43 of its beauty brands to Coty, a beauty-product manufacturer, in a US$13 billion deal. It cited sluggish growth of its beauty division as the reason for the divestiture.[27][28][29] The sale was completed on October 3, 2016.[30]
In February 2016, P&G completed the transfer of Duracell to Berkshire Hathaway through an exchange of shares.[31]
In December 2018, Procter & Gamble completed the acquisition of the consumer health division of Merck Group (known as EMD Serono in North America) for €3.4 billion ($4.2 billion) and renamed it as Procter & Gamble Health Limited in May 2019.[32][33]
In November 2018, P&G unveiled a simpler corporate structure with six business units that will be effective from July 2019.[34]
Brands
As of 2015, 21 of P&G's brands have more than a billion dollars in net annual sales.[51] Most of these brands—including Bounty, Crest, Always, and Tide—are global products available on several continents. P&G's products are available in North America, Latin America, Europe, the Middle East, Africa, Asia, Australia, and New Zealand.
In 2018, P&G's fabric and home care division accounted for 32% of the company's total net sales, the highest of all its divisions. The division includes Downy, Gain, Tide, Febreze, and Dawn.[52]
According to Advertising Age, Procter & Gamble spent $4.3 billion advertising their various brands in the United States in 2015, making it the top advertiser in the country.[53]
Manufacturing operations are based in these countries:
Radio and television production
Procter & Gamble produced and sponsored the first radio serial dramas in the 1930s. As the company was known for detergents, the serials became known as "soap operas". With the rise of television in the 1950s and 1960s, most of the new serials were sponsored, produced and owned (20 series) by the company (including The Guiding Light, which had begun as a radio serial, and made the transition to television lasting 72 years).[61] Though the last P&G-produced show, As the World Turns, left the air in 2010,[61] The Young and the Restless, produced by Sony Pictures Television and broadcast on CBS, is still partially sponsored by Procter & Gamble; as of 2017, it is the only remaining daytime drama that is partially sponsored by Procter & Gamble.
These past serials were produced by Procter & Gamble:
Procter & Gamble also was the first company to produce and sponsor a prime-time serial, a 1965 spin-off of As the World Turns called Our Private World. In 1979, PGP produced Shirley, a prime-time NBC series starring Shirley Jones, which lasted 13 episodes. They also produced TBS' first original comedy series, Down to Earth, which ran from 1984 to 1987 (110 episodes were produced). They also distributed the syndicated comedy series Throb. In 1985, they produced a game-show pilot called The Buck Stops Here with Taft Entertainment Television in 1985, hosted by Jim Peck; it was not picked up. Procter & Gamble Productions originally co-produced Dawson's Creek with Sony Pictures Television but withdrew before the series premiere due to early press reviews. They also produced the 1991 TV movie A Triumph of the Heart: The Ricky Bell Story, which was co-produced by The Landsburg Company,[citation needed] and continue to produce the People's Choice Awards[61] until the show was sold to E! channel in April 2017.[62] In 2007, PGP teamed up with the now-defunct Cookie Jar Group to produce the Flash-animated children's series Will and Dewitt, which features the character Dewitt, the mascot for the Pampers baby product line's former sub-brand, Kandoo.
The attempted with Walmart the Family Movie Night on broadcast networks in 2010–2011[63] then the Walden Family Theater on the Hallmark Channel in 2013.[64]
In 2013, PGP rebranded itself as Procter & Gamble Entertainment (PGE) with a new logo and an emphasis on multiple-platform entertainment production.
P&G funded a six-episode series, Activate, on National Geographic in 2019 focusing on extreme poverty, inequality and sustainability in conjunction with not-for-profit Global Citizen and production company Radical Media.[65] The company agreed to a longform series deal with Stone Village Television in January 2020. In February 2020, P&G joined Imagine Documentaries' five project slate including Mars 2080, the project closest to production.[66]