A CEO Summit

By Tom Branna, Editorial Director | March 1, 2012

The American Cleaning Institute relied on its own star power to entertain and inform its members during the annual meeting in Orlando last month.

When you have the big guns, use them. The American Cleaning Institute (ACI) did just that when it invited Procter & Gamble CEO Robert A McDonald and Sun Products CEO Jeff Ansell to address members at its recent annual meeting and industry convention. The ACI annual meeting, which returned to Orlando, Jan. 29-Feb. 3, attracted 700 attendees from 150 companies and 25 countries. It marked the second year in a row of that attendance rose at the annual meeting.

Together, P&G and Sun dominate the US laundry care sector with P&G controlling the premium space and Sun being a key player in the value sector. In a far-ranging session, moderated by financial news personality Alexis Glick, McDonald and Ansell tackled issues such as innovation, sustainability and providing value around the world.

Ansell noted that US consumers are still spending 6% below pre-recession levels. They want value and innovation and they’re finding just that in Sun Products’ portfolio, which includes Surf, All, Wisk and a raft of private label brands.

“We offer quality at a lower price,” he told the audience.

But at the same time, Sun is deeply committed to sustainability that does not compromise performance or price. Ansell noted that since All Small & Mighty debuted in 2005, more than 10 million pounds of plastic have been kept out of the waste stream. More recently, it rolled out single-dose All Mighty packs, which use 80% less water than standard detergent. That kind of innovation is needed to get the category growing again, insisted Ansell.

“Sales are flat to declining because household growth has slowed and Baby Boomers are retiring and are being frugal,” he told the audience. “(As a result) it’s been the slowest growth in wash loads in years.”

Successful companies, according to Ansell, will use a three-pronged strategy for future expansion. “Value, sustainability and innovation will drive growth,” he said.

Converging Markets

Together, P&G and Sun dominate the US detergent segment. Left to right, Sun’s Jeff Ansell, financial news personality Alexis Glick and P&G’s Bob McDonald.
While consumers in established markets such as the US, Western Europe and Japan understand the hygienic benefits of soap, laundry detergent and other cleaning products, McDonald noted that the majority of people around the world rely on just one, two or three products to perform most cleaning tasks.

“There is still a lot of work to do around the world,” he told the audience.

To improve lives around the world, P&G relies on three areas—sustainability, innovation and education. Sustainability is built on three keys including compaction, cold-water washing and 100% renewable material and energy. A concentrated product is good for the environment, saves on transportation costs, reduces shelf space for retailers and is preferred by consumers, according to McDonald.

Big sustainability gains can also be realized when consumers switch to cold-water washing. According to P&G estimates, if every US household relied on cold water for wash loads, the savings would be reach 33 million megawatt hours, which is equivalent to the annual energy use in 4.4 million households.

Tide Pods, which began rolling out last month, represent a convergence of sustainability and innovation efforts, according to P&G executives. (To find out more about the launch, as well as P&G’s innovation methods, read Tide Pods Have Landed on p. 82 in this issue.) Finally, McDonald urged attendees to do more about educating consumers.

“There is so much noise out there that isn’t science based,” he observed. “We have to convince (consumers) that the products we make improve people’s lives.”

During the session, ACI honored Jane M. Hutterly, recently retired from SC Johnson, with its Elva Walker Spillane Distinguished Service Award. Hutterly served on the ACI board for a decade and served as chair and vice chair. ACI also took time out to honor Dennis Griesing, with the Theodore E. Brenner Award for distinguished service. Griesing retired after serving the Institute for 22 years as its chief lobbyist in Washington, DC.

New Board Members

Jane Hutterly is the 2012 recipient of the Elva Walker Spillane Distinguished Service Award. She’s shown here with ACI chairman Bob Chouffot and ACI president Ernie Rosenberg.
Also during the annual meeting, ACI elected six executives from major cleaning product manufacturers and suppliers to its board. During the annual meeting, ACI welcomed the following new directors, who will serve two-year terms: Dirk Buengel, SVP-care chemicals and formulation technologies, BASF; David Del Guercio, global SVP&GM, Evonik-household care business line; William Krueger, VP&GM, Gojo; John Smyth, VP-EMEA, performance products division, Huntsman; William Littlefield, president & CEO, Phoenix Brands; and R. Alexandra Keith, VP-fabric care, North America and brand franchise leader, fabric enhancers, Procter & Gamble.

Re-elected to two-year terms on the board were: Robert Margevich, president and managing director, surface chemistry, AkzoNobel; Catherine Ehrenberger, VP-R&D, quality assurance and regulatory, Amway; Steve Tanner, president & CEO, Arylessence; Steven Cugine, EVP-global new product innovation, Church & Dwight; Benno Dorer, SVP-cleaning division and Canada, Clorox; Noel Wallace, president, Colgate US and global sustainability, Colgate-Palmolive; Kevin Gallagher, president, Croda; James Jackson, president, DeSoto; Eunice Heath, GM, Dow home & personal care, Dow Chemical; Larry Berger, SVP & CTO, Ecolab; Eric Schwartz, GM, laundry & home care, Henkel Consumer Goods; Cynthia Bryant, director of business development and marketing, household care division, Novozymes; Paul Ferrall, Jr., president, PQ Americas, PQ; Richard Conti, COO, North America markets, SC Johnson & Son; Tom O’Brien, GM, organics, Sasol Olefins & Surfactants; Robert Chouffot, GM, higher olefins and derivatives, Shell Chemical; John Venegoni, VP&GM, surfactants, Stepan; Craig Slavtcheff, SVP, R&D, quality, regulatory, Sun Products; and Francine Glick, president, Water Journey. Board members also re-elected the following officers to serve one-year terms: chairman Robert Chouffot, Shell Chemical; vice chairman Catherine Ehrenberger, Amway; treasurer Tom O’Brien, Sasol Olefins & Surfactants; president Ernie Rosenberg, ACI; and secretary Joanne Thelmo, ACI.

Regulatory Issues

The issues briefing session gives attendees the chance to hear the latest word from ACI Committee chairs.
While recognizing its own new corp of leaders, the Institute is also keeping a close eye on local, state and federal governments. For now, Congress is gridlocked, states have been abnormally slow in rolling out new legislation and environmental groups haven’t griped about too many issues. Still, ACI is closely monitoring several regulatory situations in the US and around the world for its members, who are pleased with ACI’s efforts. In his opening remarks, ACI chairman Bob Chouffot of Shell Chemical noted that in a 2011 performance survey of its members, 89% noted that the Institute provided “good” or “great” value for the supply chain. Chouffot urged ACI members to become involved with the Institute to ensure that their voices are heard, regardless of their sales.

That value was evident in the presentation by ACI board members who followed. BASF’s Mike Heltzer explained how the ACI is working to get the Toxic Substances Control Act (TSCA), which has been in effect since 1976 and must be modernized. ACI’s position is that modernization is necessary, but the industry must maintain its ability to innovate and speed products to the marketplace, “whatever Congress comes up with,” said Heltzer. Hearings and stakeholder meetings are being held within the Democrat-controlled Senate, while in the Republican-controlled House, there’s been no formal action, although industry is engaging in education activities.

Specifically, the industry has proposed several building blocks to TSCA Modernization, which include:
• Strengthening consumer confidence in the US chemical management system;
• Promoting innovation;
• Establishing priority chemical approach;
• Providing for adequate use, exposure and toxicity information — risk-assessment;
• Updating the safety standard; and
• Clarifying risk management tools.

With Congressional gridlock the norm in 2012, ACI doesn’t expect much movement on TSCA reform this year. Once the election is over, however, the issue could move to the forefront. But while the world waits for TSCA Reform, Heltzer warned that California, Washington and other states are considering their own versions of chemical management action, while activists are targeting 28 states on their own.

To ensure that the industry’s voice is being heard on TSCA Reform, ACI is a steering committee member on the American Alliance for Innovation. Heltzer also warned that there is growing concern that Extended Producer Responsibility (EPR) may one day impact the cleaning industry.

“If it works in other product categories, it could come to us,” warned Heltzer.

The goal of EPR is to shift costs of final product and packaging disposition, such as disposal and recycling, from cash-strapped communities to manufacturers. If such measures are passed, they could cost consumer product manufacturers billions of dollars and companies that don’t comply with EPR legislation could see their products blocked from market on a state-by-state basis. States said to be considering EPR legislation include Massachusetts (HB 2003 and 2017, and SB 341), New York (AB 6293), Rhode Island (HB 5888) and Vermont (HB 74 and SB 21 and HB 218).

Finally, in an effort to take the lead on ingredient communication, the industry has expanded its voluntary Consumer Product Ingredient Communication Initiative. The move came as Rep. Steve Israel (D-NY) reintroduced ingredient disclosure legislation (HR 3457) and Sen. Al Franken (D-MN) works on similar legislation. Meanwhile, New York and California have introduced similar legislation on the state level. ACI is engaging multiple stakeholders on these and similar issues, and maintains that such legislation is detrimental to confidential business information.

As product formulations evolve and dynamic changes in chemistry get underway, ACI’s research, technology and regulation (RTR) committee is working to keep the Institute’s message heard, explained Donna Hillebold of Akzo Nobel Chemicals.

Hillebold noted that RTR engaged the California EPA over Green Chemistry Hazard Trait regulations (which were adopted in January) and Safer Consumer Product draft regulations. Aside from extensive written comments, agency meetings and industry/agency workshops, ACI took leadership positions among industry partners such as the Personal Care Product Council and the Consumer Specialty Products Association, as well as the Green Chemistry Alliance, a Sacramento-based industry coalition. Elsewhere, ACI influenced criteria developed by EPA’s Design for the Environment (DfE) for use of enzymes in cleaning products and developed publications supporting the human safety of enzyme products and related manufacturing practices.

ACI also partnered with the Personal Care Products Council to publish data demonstrating the efficacy and benefits of antibacterial handwash products, and continues to coordinate industry efforts to promote the safety and efficacy of triclosan.

Legal Matters

For the ACI legal committee, confidential business information (CBI) is the critical issue. According to Beth Hecht of Sun Products, CBI and trade secrets are under attack from federal and state lawmakers as well as NGOs. She noted that TSCA amendments would require broader release of CBI; while at the state level, proposed green chemistry regulations in California threaten to release CBI on the department’s website. To defend itself, ACI continues to support voluntary programs and more.
Regarding the High Efficiency (HE) certification program, ACI is pursuing logo registration as a certification mark in connection with the ASTM sudsing guidelines being developed by the D-12 subcommittee. Once the HE logo is approved by the workgroup, ACI will file an application with the US Patent and Trademark Office for the HE logo and the term “high efficiency.”

The biggest issue within the oleochemical committee is restoring equitable access to animal fats for oleochemical producers. Dale Steichen of AkzoNobel reminded the audience that Federal biodiesel support policies incentivize diversion of fats to fuel production at the expense of oleochemical producers. According to one estimate, 70% of ACI members use or produce oleochemicals. To remedy the situation, ACI has proposed deleting “animal fats” from the biodiesel credit and apportioning the use of “animal fats” to assure continued supply for oleochemicals based on historic use levels.

Ecolab’s Bill Phillips provided an update on ACI’s global advocacy efforts, which are designed to create a favorable business environment for its members in the US and abroad. According to Phillips, some NGOs and governments view international forums as vehicles for driving chemical management beyond current provisions. He predicted that these forums would increasingly focus on products containing targeted chemicals rather than the chemicals themselves, with the result being inhibited product innovation and fewer business transactions. For example, he noted that OSHA is implementing the Globally Harmonized System (GHS), TSCA modernization has been influenced by REACH and the DfE and the California Toxics Information Clearinghouse relied on EU and GHS criteria to classify chemical hazards.

The sustainability committee issued its first sustainability report. According to Bob Lindenschmidt of P&G, the report proved to be a hit with members and judges as it was named a finalist in the social responsibility and green/PR marketing categories in the PR News Nonprofit PR Awards. The committee completed Phase III of its Sustainability Metrics Project, which involved 22 ACI members (13 suppliers and nine formulators), up from 18 participating companies in 2010. The 22 respondents represented 79% of ACI’s dues base, but the committee acknowledged that work is needed to get more members involved.

For more on the annual meeting, visit Happi.com.

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