Darshan Gala:
Gillette concall notes(latest)
Business:
They are growing and creating value through a strategy that drives growth and value creation through five integrated choices:
- A portfolio of daily use products, where performance drives brand choice
- Superiority across product, packaging, brand communication, retail execution and value
- productivity to fund this superiority
- Constructive disruption of the entire value chain to future proof our business
- A highly efficient and effective organization structure
The model is dynamic and sustainable
Products :
Gillette guard is their most affordable system razor designed in India for india, especially for rural consumer’s. It is designed keeping in kind the context that these household’s may not have access to running water and couple with their aspiration of confidence and dignity, they have continued to upgrade their product. Has the highest share in rural market this year
Orbal B- with their power oral care tooth brushes they have been able to provide their consumers with the most power packed brushing experience -A smarter way to brush that gives up to 100% more plaque removal, whiter teeth, improved gum health and with 3D technology, visible pressure sensor and a 2min professional timer. Along side this they are also educating their consumer’s on oral health practice’s.
In apr/may/june qtr saw the fastest fmcg consumption they have seen in the last 6 qtrs
Inflation is softening and volume growth is finally returning. the 7.5% volume growth in the qtr is great news for industry even the rural growth turned positive by 1.4% volume growth in the non food sector after four qtrs of significant volume decline.
Cautiously optimistic is the term is what describes their situation
Expanded direct reach by over 65% vs where it was 5 years ago
They have started smart distribution. They have developed in house data science engine powered with artificial intelligence (AI) and advanced machine learning models (ML), which enables it to equip it’s diverse store network with a customized range of product offerings, bases on the demonstrated preferences and needs of the consumer’s in the vicinity of these stores. The innovation aims to help kirana store owners in efficiently optimizing their stock inventory, significantly reducing non-moving stock, and enhancing business operations by serving consumer’s better.
Their market share for Gillette is at highest ever level upwards to 60%
This year brought products like Mach 3 Charcoal, Venus swirl and Braun BT5 launches. And Introduction of Oral B sensitiveX - a premium sensitive toothbrush, and a relaunch of Gillette fusion as a styling tool. They continue to upgrade their propositions, including Gillette guard, Oral B criss cross and Oral B kids electric toothbrush.
A substantial portion of their sales is locally manufactured locally and they are always on the lookout to bring more parts of their biz under local manufacturing.
As per capita income rises in the nation, discretionary spending rises accordingly, which is when consumer’s are able to pay higher for product superiority, a phenomenon theh summarise as premiumization
The premiumization trend has been positive for Gillette as well as Oral B, as they have seen per capita incomes rise in the country and consumer’s willing to pay for superiority. This is reflected in their growth of premium products.
There is alot more room for premiumization in oral care
Braun today has the world’s best tech when it comes to shaving and trimming
The royaly agreement is towards the use of intellectual property of the parent that they use in India.
Female hair removal is actually a large market, but razors compete with creams, in-home waxes and salons. Their focus has been on the in-home hair removal segment. In the last 3 years, razors as a sub segment have seen fastest growth.
Venus India has grown 10X in P10Y. Most recently, in their quest to provide the best possible shaving experience, we introduced Venus Swirl. This is a 5-bladed razor – 1st in the category with a rotating head that helps provide a
Darshan Gala:
clean, smooth shave.
Management:they are also making headway with what we call SMART distribution. An in- house developed artificial
intelligence and machine learning algorithm that analyzes consumer behavior and pattern to
customize a range of P&G products at a store level. With this, we have transitioned from a cluster-
based planning to a store/neighborhood-based planning. This win-win model is helpful for the
consumer in making their desired products available and helpful for the store owners, helping them
optimize inventory and significantly reducing non-moving stock. This is how we are improving
The strategic need to keep investing in superiority, the short-term need to manage through a very
challenging cost environment and the ongoing need to drive balanced top- and bottom-line growth,
including margin expansion, underscore the importance of ongoing productivity.
We have developed a strong productivity muscle over the years. Productivity is now fully embedded
in our operating model and is embraced in every part of our operation. Specifically, last year, through
our productivity interventions, this company achieved savings of over Rs. 55 crores.
Their organization structure is designed to focus our human, technical and financial resources on our
biggest opportunities for growth. The structure yields an empowered, agile and accountable
organization with very little overlap or redundancy - flowing to new demands, seamlessly supporting
each other to deliver against our priorities in the communities.
Therefore, they keep upgrading their bouquet of policies and programs to cater to our diverse workforce
so that every single person can bring their whole authentic selves to work every day. For example,
Their Lead with Care program offers a holistic and support to employees who are caregivers to children
with disabilities and special needs, including neurodevelopmental, cognitive, behavioral or physical
impairments. The program includes medical coverage, specialized and trained day-care support via
certified partners, and an employee assistant program( EAP) available 24X7 to all employees and their
families to navigate this journey.
Our longstanding commitment to education is also a way of contributing to the social development
of the country brought to life via our flagship CSR program, P&G Shiksha.
P&G Shiksha is a holistic educational program that addresses critical barriers to achieving universal
education. Over 18 years, Shiksha has helped reach thousands of schools in communities, impacting
over 35 lakh children.
Environmental sustainability has been embedded into P&G’s business practices and we consistently
strive to minimize our environmental impact, encouraging consumers and suppliers to do the same.
Their goals:
• We have committed to accelerated efforts to combat climate change as part of ambition 2030.
• We have committed to be Net-Zero by 2040.
• Our global water strategy aims to restore water in water-stressed areas around the world.
• Today, we are collecting back more plastic packaging waste than we put out in India and
leverage renewable energy in our operations.
• Our brands are incorporating sustainability in serving consumers with superior products, for
instance, by leading the use of recycled plastic.
Management expects volume consumption growth within FMCG category to be in the mid single digits over5-7years.
There are several other category where consumption is underdeveloped, whether they look at the potential to further improve and impact consumer lives, or if they compare to other countries with similar per capita income. They see an opportunity to grow these categories double digit. To make this a reality, the role they see companies like P&G play is to continue to drive
awareness and education, make our products available to consumers at varied price points and retail
channels, and continue to delight them with superior propositions at the right value.
Expect oral care as a category to demonstrate market growth of mid single digits, in line with FMCG market growth,
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