P&G defends "white space"

CINCINNATI: Procter & Gamble, the FMCG giant, is seeking to defend "white space" categories in its home market of the US, which are receiving heightened attention from international rivals.

"What we are seeing is a lot more intensity of competition in North America," Jon Moeller, the company's chief financial officer, said, as reported by the Cincinnati Business Courier.

"This is a market which is viewed as white space, and very profitable white space, for some of our internationally domiciled competitors."

Among the diverse range of firms that are aiming to enhance their position in the region is Unilever, based in the UK, and which recently launched the new Clear shampoo brand locally.

Unicharm, a Japanese operator, is also expected to ramp up its US activity, targeting categories from diapers to feminine products. L'Oréal, the French beauty group, and Reckitt Benckiser, the British household goods expert, are also direct rivals.

"This level of competitive activity is generally a good thing for markets," Moeller said. "It's accretive to markets. It builds awareness. It builds usage.

"But it's something we have to watch out for from a share standpoint and that's part of the reason why we're trying to become more productive so we have more financial resources available to ensure that we can go head to head with our competitors as they try to enter our major markets."

Moeller also suggested that most big players had followed Procter & Gamble's example by raising prices, enabling the firm to generate $3.5bn in revenue without risking its market share.

As a side benefit of this process, its primary rivals are unlikely to pursue disruptive shifts in approach while sales figures remain robust.

"Their top line results were very strong, which I take encouragement from because if you're sitting in my chair in one of those companies you don't have a reason to question your strategy. It's generally working," Moeller said.

While emerging markets are necessarily attracting attention, as demonstrated by P&G's recent decision to move its cosmetics and personal care unit to Singapore, its base in Cincinnati remains vital.

"If you look at baby care as an example, 80% of the babies that are being born in the world are in the combination of Asia and Africa. So having our baby care leadership kind of in the middle of that we feel is very important," Moeller argued.

"But our predominant home base will continue to be Cincinnati, Ohio. We still have very large organisations that are managing our North American business and many of our global brands are managed here as well."

Data sourced from Cincinnati Business Courier; additional content by Warc staff, 1 June 2012

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