P&G Sales Soar as Retiring CEO Extols Marketing Spend by Ds entertainer CONSUMER PACKAGED GOODS P&G Sales Soar as Retiring CEO Extols Marketing Spend

 

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P&G Sales Soar as Retiring CEO Extols Marketing Spend by Ds entertainer  P&G Sales Soar as Retiring CEO Extols Marketing Spend

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s Procter & Gamble reported fiscal year 2021 net sales of $76.1 billion ending June 30 and fourth quarter net sales of $18.9 billion, both up 7% from 2020, outgoing president/CEO David Taylor defended the company's marketing expenditures, which increased $850 million (11.6 percent) to $8.18 billion in the fiscal year.

“You have to assist people understand what the product is, how to use it, and then help drive awareness and trial,” Taylor said of P&G's top-line growth over the last five years, which has risen from 2% to 6% yearly. And it's thanks to these investments that we've been able to do so.”

Taylor cited its European laundry detergent Ariel's new "Every Degree Makes a Difference" campaign, claiming that the educational push about the environmental benefits of lower washing machine temperatures had "helped contribute to Global Fabric Care's 1.2 percent value share growth over the past 12 months."

P&G's increased marketing spending is expected to continue. “We haven't reached the point where these investments are yielding decreasing returns,” said chief financial officer Andre Shelton, “so we will continue to invest at around...8% of sales.”

Based on "the shift into digital media, improved targeting capability with first' or third-party audiences," and "the ability to sharpen our focus, even on TV audiences with our own data," Shelton predicts "significant" productivity improvements in media spend effectiveness "to improve quality and quantity of reach." We're also working to reduce manufacturing expenses and streamline the agency structure.”

“We're bringing certain media planning work in-house to achieve greater cost efficiency, while also enabling us to place advertisements with higher precision based on more granular analytics to decrease waste and boost effectiveness,” Taylor explained.

Ariel isn't the only brand included in P&G's earnings report and following earnings forecast.

— SK-II cosmetics, a luxury skin-care brand founded in Japan that is also distributed in the United States, whose disproportionate rise “due to pandemic-related travel difficulties in the base period” helped the beauty sector reach a 6% organic sales increase. Y to Y— Vicks Nyquil Honey and Day Qull Honey, both of which debuted last summer, with the former being dubbed the "#1 new item in the United States respiratory market" by Taylor.

“Despite the lackluster market due to a very weak cough/cold season,” Taylor added, P&G's Vicks stock grew 0.9 percent in the past year.

 

— Oral B io Power Brush, which debuted last summer and contributed to a 2 12 point increase in "brushing segment power share" over the previous year, with io accounting for more than half of the increase in P&G's US power brush category, according to Taylor.

— Crest Whitening Emulsions, which debuted in September and is expected to contribute to organic sales growth of more than 20% in P&G's tooth whitening businesses in 2021, accounting for two-thirds of all whitener growth in the United States.

 

— Ninjamas, which debuted in September 2020 and helped P&G's Baby Care category grow by 12% in the bed-wetting segment.

Prior to issuing the earnings report, P&G announced that Taylor will step down Nov. 1, to be replaced by Jon R. Moeller, vice chairman/chief operating officer and former chief financial officer.

Shailesh Jejurika, currently chief executive officer of P&G’s Fabric & Home Care sector, will replace Moeller as chief operating officer a month earlier.