P&G's next $1 billion brands

P&G's next $1 billion brands

P&G's next $1 billion brands

 

Two years ago, the Fusion brand of battery-powered, hand-held razors didn't exist. Last week, Procter & Gamble's top executives said Fusion was poised to become the fastest P&G brand ever to reach the $1 billion sales mark.

That the brand grew so quickly, and that P&G's top executives highlighted it during the third-quarter earnings call was a nod to a primary tenet of the Procter & Gamble corporate religion: the billion-dollar brand. Chairman and CEO A.G. Lafley has emphasized the power of the billion-dollar brand during his nearly eight-year tenure.

Of the nearly 300 labels the company sells worldwide, 23 account for $1 billion or more each in annual sales; 18 others, including Fusion, are on the cusp with sales between $500 million and $999 million a year.

Those 41 brands represent the current and future most important marques for the world's largest consumer-products company, whose revenues were $76.5 billion last year.

By contrast, Kimberly-Clark, a P&G rival focusing on paper products which had annual revenues of $18.3 billion last year, lists four brands with annual sales of $1 billion or more on its Web site.

"You want as high a percentage of your sales to come from as small a group of brands as possible," said Linda Bolton Weiser, an analyst with Caris & Co. in New York.

"You get more efficient production runs, more efficient media buys. It's like the business concept of leverage."

How does a product go from concept to one of the largest in P&G's portfolio? The Enquirer asked P&G brand executives to explain the trajectory of Fusion and five other brands nearing $1 billion in sales. Some were conceived inside the company's Cincinnati headquarters, while others grew out of ideas Procter sought from outside companies, and still others were acquired. Some, like Fusion, have grown quickly; others have taken more than a decade. All of them are growing both in the U.S. and in developing markets around the world.