Certain products are so integral to daily life that you hardly notice you’re using them: you reach for toothpaste in the morning, grab paper towels to soak up small mishaps, start your daily load of laundry with detergent, and chances are at least one of those items is made by Procter and Gamble.
Clean and Comfortable
Procter and Gamble (P&G) aims to improve everyday life with small comforts. The many brands that fall under the P&G umbrella can be broken into a staggering 10 categories of care: baby, fabric, family, feminine, hair, home, grooming, personal health, oral, and skin and personal care. Ultra-recognizable brands like Pampers, Tide, Charmin, Pantene, and Dawn all belong to the P&G Empire.
P&G has a well documented list of values and principles. Their five main core values are:
- Integrity — doing the right thing with honesty and authenticity
- Leadership — recognizing the way their brands rank in their industries, and handling that carefully
- Ownership — accepting responsibility and treating the company like a personal asset
- Passion for Winning — rejecting the status quo and seeking to be the best
- Trust — treating consumers and coworkers with fairness and respect
These values have largely inspired P&G efforts to make progress in sustainability, community impact, gender equality, diversity and inclusion, and being cruelty free.
Procter and Gamble may be a well-oiled machine in the world of care and comfort today, but this massive collection of brands certainly didn’t start out as a titan of industry. Rather, it began as many great American companies did: as a small operation in the heart of the country.
Starting with Soaps and Candles
In 1837, William Procter and James Gamble formed an alliance to create Procter and Gamble in Cincinnati. Procter made candles, and Gamble made soap, but both relied on animal fat as the base of their products, so Cincinnati (which was a butchering hub) was an ideal home base.
If you’re thinking that a company this old must have played an important role in American history, you’re right. Procter and Gamble even supplied the Union Army with soap and candles during the Civil War.
In 1879, James Gamble (son of the co-founder) recognized the fact that Americans were relying upon two different soaps for laundry and bathing. To simplify every family’s day to day life, he created a bar of soap that could do both, and called it Ivory Soap. This invention proved pivotal in the growth of P&G, and started them out on a long path of innovation.
P&G recognized the fact that they could be advancing modern lifestyles, and developed the first Research and Development lab at their Cincinnati headquarters, known as Ivorydale. Over the next hundred years, P&G improved upon the razor, and created or acquired such iconic brands as Tide, Oral-B, Crest, and Head & Shoulders.
Amidst all of this innovation, Procter and Gamble managed to stay a family company for generations; perhaps the most notable president of P&G was William Cooper Procter, grandson of the co-founder. While the company expanded significantly during his tenure, William is most famous as a champion for the workers. He suggested half-days on Saturdays, instituted the first employee profit sharing plan, guaranteed employees 48 weeks of work every year, pioneered disability pension plans, and originated representation for employees on the board.
Not only were these innovations an important step in labor relations for P&G, but for the entire manufacturing and labor industry as they set the tone for what progress truly meant. Procter and Gamble’s current level on innovation draws on history as a leader on this front.
Now, P&G continues to search for ways to revolutionize their industry, through efforts like ingredient transparency, creative new products, and social endeavours that mirror the ones they pioneered almost 100 years ago. Procter and Gamble is able to stay so relevant today not only because their products are so integral to modern comfort, but also because they have learned and grown from their history.
Because P&G houses such a large number of brands, it’s difficult for any company to compete on the same level. Instead, P&G competitors must be compartmentalized by brand, or at least brand segment.
Beauty care (which actually fits into the P&G category of skin and personal care) accounted for 19% of Procter and Gamble’s sales in 2018, and sees one of the most crowded fields of competition in the P&G scope. Avon, Colgate-Palmolive, and Estee Lauder are some of the largest competitors in this arena.
P&G has long dominated the grooming segment (10% of its sales) with its brand Gillette. Bic, though a strong brand with an international presence, has failed to close in on P&G success here. However, a new system of delivering grooming products presents a new threat that is still taking shape: The Dollar Shave Club, Billie, and Henry’s offer razors shipped directly to your door, and may take a bite out of P&G Grooming sales.
The largest area of P&G sales comes from fabric and home care, which accounted for about 32% in 2018. A repeating competitor, Colgate-Palmolive re-emerges here, along with Unilever, and Church & Dwight Co. In fact, these same three competitors are the largest P&G threats in feminine and family care as well (27% of sales), making them the biggest global forces with which P&G must reckon.
This competition is nothing new. Actually, Colgate-Palmolive began much in the same way as Procter and Gamble—only earlier. The soap and candle company that eventually grew into Colgate-Palmolive began all the way back in 1806, so P&G has never existed without pressure from this competitor.
Likewise, Church & Dwight Co. was formed in the mid-1800s, and grew by manufacturing Arm & Hammer baking soda. It wasn’t until both P&G and Church & Dwight Co. moved into the realm of deodorizing and oral care in the mid-1900s that they came into direct competition, a rivalry that obviously still stands today.
Much in the same way, Unilever began in the late 1800s with soap manufacturing on the East coast. Unilever branched into many industries that don’t come into conflict with P&G, like food, but still takes a bite out of P&G global sales. While Procter and Gamble makes 65% of its money in developed markets (which are more slow growing), Unilever gets 58% of its income from developing markets.
Pretty Faces, Patents, and Philanthropy
As a company with such immense global market share in so many spaces, Procter and Gamble doesn’t need to work all that hard to remain visible—but they do anyway. One of the most famous celebrity endorsements for a P&G brand was Sofia Vergara’s long-running advertisements for Head & Shoulder. Vergara remained one of a select few celebrities P&G hired to endorse products globally following a budget cut for such practices in 2014. She was chosen as a spokesperson due to the fact that she polled above average in a significant number of markets.
P&G still invests in a number of celebrity spokespeople, but they generally depend on trends of the moment with a fleeting time limit on endorsement.
With so many profitable brands and products on the market, a certain number of patent battles is inevitable for a company like P&G, and they’ve had more than their fair share over the last few decades. Procter and Gamble has a shocking 13,223 patents, so you can imagine how keeping track of them and their possible infringements would be a fulltime job.
Such battles date back more than 40 years, but one of the most recent was over Crest Whitestrips, where P&G believed that a Canadian tooth whitening strip infringed upon their patent. The two companies eventually settled in 2018, but this has not always been the case in P&G patent fights. A 1970 case against Johnson & Johnson didn’t end so amicably for P&G, as is so often the case when these disagreements go to court.
It’s not just endorsements and complicated legalese that keep Procter and Gamble in the public eye, though. P&G has a long history of philanthropy as a means through which to connect with consumers, and demonstrate its commitment to the values it was founded under.
One of the most recent instances of such philanthropy was a considerable donation from P&G to the United State Women’s National Soccer Team in the expressed interest of closing the pay gap in professional sports. Following the U.S. Women’s Team win at the FIFA World Cup in July, 2019, Procter and Gamble donated a whopping $529,000 to the team.
Practices like these are, perhaps, the greatest asset P&G has in terms of staying visible—they’re significant resources allow them to throw their attention on causes that genuinely matter in the moment that they matter.
Controversy Comes Knocking
There’s no way around it: a company as massive as P&G is bound to face scrutiny, both deserved and contrived. Most people are of the opinion that giant corporations have a lot of skeletons in their closet, which leads activists to seek them out.
One such case came in 2014, when Greenpeace released a report alleging that P&G had participated in harmful deforestation practices that led to the deaths of a number of animals in Indonesia, including orangutans.
In response, P&G agreed to take on a new policy that removed deforestation from its palm oil sourcing practices. In effect, Procter and Gamble used this opportunity (that could have cost them public favor) to demonstrate accountability and a willingness to listen to consumer concerns.
An issue that hit closer to home came early in 2018, when teenagers began participating in the “Tide Pod Challenge.” In the challenge, teens would film themselves eating tide pods and post the videos for Internet clout. While this wasn’t exactly the fault of P&G, they still had to answer to public outcry since laundry soap obviously shouldn’t be consumed.
Procter and Gamble first took to the Internet, responding to Twitter mentions of the challenge by encouraging anyone who had taken part to contact poison control, and try to flush their system. P&G also worked with YouTube and other platforms to remove videos of the challenge, and thus de-incentivize it. Lastly P&G added a bitter coating to the pods in an attempt to further dissuade consumption.
Though these are just two examples of the sort of negative press P&G has received, there has been plenty of positive news as well, most of which stems from their philanthropic efforts.
182 Years and Counting
No matter which way you slice it, Procter and Gamble is a massive company with hugely successful brands. Fortune ranks P&G 45th in 2019, a loss of 3 spots as compared to the previous year. However, the hole that drug P&G down in 2018 seems to be disappearing with a restructuring overhaul now in effect.
Additionally, Forbes places Gillette (just a small portion of the P&G Empire) at number 37 on its list of most valuable brands. This speaks to the strength of P&G as a company, since so many of its brands perform highly year after year.
Forbes also ranks P&G at number 8 on its list of 100 companies doing right by America in 2019. Companies on this list were evaluated based on a number of criteria, including worker treatment, environment, customers, and leadership. A high ranking on this list means that the P&G commitment to community impact and public service is more than just lip service, their actions back it up.
You may not think twice about using Proctor and Gamble products on a daily basis, but should the company ever enter your mind as you brush your teeth or wash your dishes, you can feel good about supporting a long-standing vestige of American ingenuity and social responsibility.