Procter & Gamble (P&G) is the number-one household and personal products company in the world, with annual sales of roughly $22 billion, operating in 180 countries. It is #11 on Forbes' list of largest U.S. companies and #29 globally. Among its iconic consumer brands are Tide, Pampers, Crest, Duracell, Oral B and Gillette.
In 2007, P&G set a goal of selling $50 billion in sustainable products by 2012, 11 percent of its projected revenues. This sustainability initiative has three primary focus areas: product innovation, largely within existing brands; operations; and supply chain and stakeholder relations.
In April 2010, P&G launched 'Future Friendly' in the U.S. 'Future Friendly' is a multi-brand and multi-platform effort to encourage consumers to reduce the environmental impact of their daily lives.
GreenBiz.com's Heather King talked with Len Sauers, P&G's Vice President of Global Sustainability about the company's 9,000-member innovation team, the company's impact on Dow and Dupont, and what it takes for CEO Bob McDonald and team to get consumers to wash their clothes in cold water.
Consumer research indicates consumers are brand loyal and unwilling to make price or performance tradeoffs to capture environmental benefits. Yet, P&G increasingly encounters upstart green brands like Method and Seventh Generation. And, major retailers like Walmart have introduced sustainability mandates to suppliers like P&G. Given these factors, are consumers, competitors or retailers the more significant force behind P&G's environmental sustainability effort?
Within the past couple of years, we've noticed increased consumer interest in sustainability. The majority of the market -- 70-80 percent -- is now eco-aware. That means they want to do the right thing but they're not willing to accept tradeoffs. We have chosen to target this "sustainable mainstream."
The key is to develop products that enable this mainstream market to be sustainable without any inherent tradeoffs. There can be no decrease in performance or increase in price. With this approach, we view sustainability as an opportunity to drive top-line growth and cut costs.
Are there certain brands or market sectors that offer greater opportunity for P&G to materially change the environmental impact of its products?
All of our brands have a potential to be more sustainable. Some offer easier, faster wins. P&G is a science-based organization. We use life-cycle assessment to evaluate the environmental impact of a product or operation. The assessment showed that initially we could make the greatest improvements in our laundry and homecare lines: Ariel, Tide, and Pampers. Ultimately, to sell $50 billion in sustainable innovation products by 2012, all P&G products must get greener in their formulation and packaging.
So, P&G is reinventing all of its brand name products to deliver sustainability without asking consumers to adopt new brands or accept tradeoffs. Is this reinvention a challenge for the company?
We see sustainability as an opportunity more than a constraint. P&G has an R&D team of 9,000. They are actively developing new technologies to be sure our brands or new products deliver consumers the same benefits -- more sustainably. Innovation is central to our sustainability effort and our company growth.