P&G’s New Normal Includes Record Production & 35% Growth in E-Com Sales
Fabric and home care category organic sales grew 10%, while health care was up 9% and baby, feminine and family care rose 7%.
Beauty organic sales ticked up just 1%, however, while grooming ticked down 1%, in part because of the shutdown of travel retail sales and the rise in remote working environments.
“We will serve what will likely become a forever altered health hygiene and cleaning focus for consumers who use our products daily or multiple times each day,” Moeller said. “There may be an increased focus on home, more time at home, more meals at home, more cleaning of homes with related consumption impacts.”
However, he noted, the company has also never confronted such high unemployment levels before. “We’ve never faced a complete shutdown of very important channels of commerce, whether that’s travel retail,” he added, “whether that’s the electric channel in Europe, whether that’s the specialty beauty channel. So there’s a huge amount of volatility we’re likely to experience, and we’ll learn more every day.”
He also warned of the potential of months of sporadic production suspensions because of quarantine mandates or raw material supply levels.
“It’s not just our operations that matter here,” Moeller said. “It’s those of our suppliers, of contractors and of our transportation partners. A lot must go right in a very challenging environment, and not all of it will.”
P&G manufactured and shipped a record volume of product in March, with its largest five North American plants producing and shipping 22% more cases for the month vs. the average of the prior 12 months.
Its 108 manufacturing plants and its network of external suppliers are broadly operational, Moeller said, with just a handful operating at modified capacity as a result of regulation, workforce, travel restrictions, curfews, material availability or quarantine needs.
Production of nonmedical facemasks has begun in the United States and China — with work underway in other regions — and the company expects to produce over 10 million masks per month once fully operational.
It’s also modified equipment in nearly a dozen sites to manufacture hand sanitizer for hospitals, health care facilities and relief organizations.
“Success in our highly competitive industry requires agility that comes with a mindset of constructive disruption, a willingness to change, adapt and create new trends and technologies that will shape our industry for the future,” noted Moeller. “In this environment, that agility and constructive disruption mindset are even more important.”
Procter & Gamble is No. 2 on the CGTTop 100 Consumer Goods Companies of 2019 ranking.