Procter & Gamble on Tuesday threw its weight behind growing environmental efforts to reduce excess packaging, with plans to switch its entire $4bn (€2.94bn) North American liquid detergent output to smaller bottles of double concentrate.
The move comes as Wal-Mart, P&G's largest customer, is pushing its suppliers to cut packaging by at least 5 per cent. In Europe, Tesco and other big supermarket chains have also said they want to cut the amount of packaging.
P&G's liquid detergents, led by its leading Tide brand, dominate the US market, with a market share of more than 60 per cent. Unilever, its global rival, launched its concentrate "Small and Mighty" detergent bottles in the US in 2005, and expanded the sub-brand to Persil and Surf in the UK this year.
Clayt Daley, P&G's chief financial officer, said the company would carry out a nationwide roll-out of its new smaller packaging for Tide and other brands from September.
Mr Daley said the company expected to face higher costs with the introduction of the new products, including converting its packaging moulds, in-store materials and higher marketing costs. Its 2008 fiscal year would be "a net investment year for this project".
"We expect this to be a win for consumers, retailers, the environment, and P&G," he said.
Concentrating detergent reduces shipping and packaging costs, but requires manufacturers to spend on persuading customers that they are not spending more for the smaller packages. Unilever estimates its "Small and Mighty" bottles reduce packaging by more than 40 per cent, and water usage by about 60 per cent. The concentrate also reduces shipping volumes 60 per cent.
As it reported quarterly results on Tuesday, P&G also said it expected to face increases in commodity and energy costs in its coming fiscal year, which starts on July 1, but at a lower rate than during its current year.
The company, whose products range from Gillette razors to Pringles snacks, said its profits rose 14 per cent to $2.51bn, while net sales increased 8 per cent to $18.69bn.
Source |
