Money Matters: 4 CPG Giants Make Sales Gains
August 19, 2009 - While the majority of sales in the consumer packaged goods (CPG) market continue to be negatively impacted by the global economic environment, four of the top grossing public CPG companies reported gains in the second quarter of 2009. Here, company executives reveal what they did differently to deliver growth:
Unilever: The maker of Knorr soup, Dove soap and Sunsilk beat consensus forecasts with a 4.1 percent rise in second quarter underlying sales and was encouraged by a 2 percent rise in volumes, with all regions seeing growth. Unilever Chief Executive Officer Paul Polman says, "More of our brands are improving share again behind strong innovations, greater consumer value, increased marketing support and better execution. We continue to focus on restoring volume growth while protecting margins and cash flow for the year as a whole."
Reckitt Benckiser: Total net revenue for this manufacturer increased 8 percent in the second quarter. And for the first half of the year, total net revenue also grew 8 percent to 3,783 million pounds, with growth across the group and its 17 "power brands". Specific product innovations included Airwick Imotion, which detects movement and delivers a burst of fragrance when a person enters the room, and Oxyaction intelligence gel, a stronger remover of greasy stains. "As a result of this strong start to the year, we are raising our fiscal year 2009 targets. We are now targeting net revenue growth of +5 percent to 6 percent (previously +4 percent, base 6,563 million pounds) and net income growth of +10 percent to 11 percent (previously +8 percent to 10 percent, base 1,143 million pounds), both at constant exchange," says Bart Becht, chief executive officer, Reckitt Benckiser.
Church & Dwight: The Arm & Hammer brand owner reported that net sales for the second quarter increased approximately 5 percent to $623.1 million. Meanwhile, organic sales grew 4.5 percent for the quarter. James R. Craigie, chairman and chief executive officer, says, "We were able to increase market share for six of our eight 'power brands' in the quarter, achieve continued strong organic sales growth in our household product line and effect a turnaround to positive organic sales growth in our personal care product line." He elaborates that organic sales growth was driven by consumer appeal for our high quality, value-oriented products and premium priced new products, carryover benefits of 2008 pricing actions and a significant increase in marketing spending, partially offset by soft sales in the specialty products division.
The Clorox Company: While the company's second-quarter sales did grow 3 percent to $1.22 billion, the bigger news here is that Clorox's fiscal sales also swelled 3 percent to $5.5 billion in 2009. Excluding the impact of unfavorable foreign exchange rates, the exit from private-label food bags and the benefit of a full year of sales for Burt's Bees products, sales increased 4 percent. "The organization delivered strong results in fiscal 2009. We made significant progress against our Centennial Strategy [Editor's Note: Named for the company's milestone anniversary in 2013, this strategy is focused on achieving double-digit annual growth in economic profit]. We drove sales growth on core businesses, including the Kingsford, Hidden Valley, Green Works, Brita and Clorox 2 brands, and we maintained our all-outlet market share. We returned to annual gross margin expansion for the year and, despite the challenging economic environment, we're continuing to invest in the long-term health of our brands," reports Clorox Chairman and CEO Don Knauss.
Unilever: The maker of Knorr soup, Dove soap and Sunsilk beat consensus forecasts with a 4.1 percent rise in second quarter underlying sales and was encouraged by a 2 percent rise in volumes, with all regions seeing growth. Unilever Chief Executive Officer Paul Polman says, "More of our brands are improving share again behind strong innovations, greater consumer value, increased marketing support and better execution. We continue to focus on restoring volume growth while protecting margins and cash flow for the year as a whole."
Reckitt Benckiser: Total net revenue for this manufacturer increased 8 percent in the second quarter. And for the first half of the year, total net revenue also grew 8 percent to 3,783 million pounds, with growth across the group and its 17 "power brands". Specific product innovations included Airwick Imotion, which detects movement and delivers a burst of fragrance when a person enters the room, and Oxyaction intelligence gel, a stronger remover of greasy stains. "As a result of this strong start to the year, we are raising our fiscal year 2009 targets. We are now targeting net revenue growth of +5 percent to 6 percent (previously +4 percent, base 6,563 million pounds) and net income growth of +10 percent to 11 percent (previously +8 percent to 10 percent, base 1,143 million pounds), both at constant exchange," says Bart Becht, chief executive officer, Reckitt Benckiser.
Church & Dwight: The Arm & Hammer brand owner reported that net sales for the second quarter increased approximately 5 percent to $623.1 million. Meanwhile, organic sales grew 4.5 percent for the quarter. James R. Craigie, chairman and chief executive officer, says, "We were able to increase market share for six of our eight 'power brands' in the quarter, achieve continued strong organic sales growth in our household product line and effect a turnaround to positive organic sales growth in our personal care product line." He elaborates that organic sales growth was driven by consumer appeal for our high quality, value-oriented products and premium priced new products, carryover benefits of 2008 pricing actions and a significant increase in marketing spending, partially offset by soft sales in the specialty products division.
The Clorox Company: While the company's second-quarter sales did grow 3 percent to $1.22 billion, the bigger news here is that Clorox's fiscal sales also swelled 3 percent to $5.5 billion in 2009. Excluding the impact of unfavorable foreign exchange rates, the exit from private-label food bags and the benefit of a full year of sales for Burt's Bees products, sales increased 4 percent. "The organization delivered strong results in fiscal 2009. We made significant progress against our Centennial Strategy [Editor's Note: Named for the company's milestone anniversary in 2013, this strategy is focused on achieving double-digit annual growth in economic profit]. We drove sales growth on core businesses, including the Kingsford, Hidden Valley, Green Works, Brita and Clorox 2 brands, and we maintained our all-outlet market share. We returned to annual gross margin expansion for the year and, despite the challenging economic environment, we're continuing to invest in the long-term health of our brands," reports Clorox Chairman and CEO Don Knauss.