Alexander Coolidge, The Cincinnati Enquirer
CINCINNATI (CINCINNATI ENQUIRER) -- Under pressure to innovate, Procter & Gamble announced Wednesday that it's launching a mid-priced version of its best-selling Tide brand detergent early next year.
Called Tide Simply Clean & Fresh, the lower-priced version will be aimed at capturing the shopper who's increasingly bypassing premium brands in favor of less pricey household products.
The trick for P&G, of course, is to also keep the loyal Tide consumer from trading down to the lower-priced line.
"We're currently under-represented in the mid-tier," P&G Chief Executive A.G. Lafley told Wall Street analysts during the Barclays Back to School Conference in Boston. The new product will hit store shelves in February, Lafley said. Pricing was not disclosed.
Lafley acknowledged risks raised by analysts, who caution a mid-priced version could erode loyalty among premium Tide shoppers. But he said: "We're confident it will be very attractive to mid-tier customers but not interesting to current Tide users."
Lafley didn't elaborate on specific differences between Tide premium and Tide Simply Clean & Fresh. P&G officials said later that it will be designed with a "level of cleaning and freshness for mid-tier consumers." They didn't elaborate, either.
"We're confident it will be very attractive to mid-tier customers but not interesting to current Tide users."
- A.G. Lafley, Procter & Gamble CEO
Lafley compared the new Tide to other mid-priced products born from P&G premium brands. Among them: Pampers Baby Dry diapers, Bounty Basic, Gillette Mach3 razors, Vidal Sassoon Pro Series hair care, Olay Fresh Effects skin care and Iams So Good pet food.
Morningstar analyst Erin Lash said the key to launching the mid-tier Tide will be making it clear to the consumer that it's a different-quality product from premium Tide offerings.
"You don't want your existing customers to trade down," she said. "You want to attract new customers."
Executives from rival Church & Dwight Co. told investors earlier in the week that lower-priced brands like their Arm & Hammer make up the only segment of the laundry detergent business that's growing. They said the share of the "value segment" of the U.S. detergent market has grown from 25.9% to 29.2% since 2009.
Premium brands remain the largest segment, however, and Lafley noted that P&G controls about 85% of that $4.5 billion-a-year U.S. market.
Wednesday's presentation before analysts was Lafley's second since his return as CEO of P&G. Lafley, who ran P&G from 2000 to 2009, returned to the helm in May after Bob McDonald retired as CEO amid criticism over the company's inconsistent profit and sales growth.
After three months on the job, Lafley has stressed no major shift in continuing a company-wide restructuring.
P&G shares declined 26 cents to $77.49 on Wednesday.
The Cincinnati Enquirer