“This group has the ability to change the world; we’re incredibly important to making the world a better place,” he told attendees at the recent World Conference on Fabric and Home Care.
A nice opening line or two, but Polman wasn’t about to sugarcoat his message to the 500 cleaning industry executives who were in Singapore for the biannual event. Polman allowed that the home cleaning industry is a tough business, noting, that since he became CEO nine years ago, Procter & Gamble has gone through four CEOs.
Back in 2007, the business world was in crisis of morality—stocks rose 7-8% a year, and industries relied on debt and overconsumption by the few, while too many lived in poverty. Well, it’s been 10 years and not much has changed; global debt is up and mature economies have stalled. And the world is weighed down by gluttony, according to the Unilever CEO.
“We dig it out, produce it and dump it back in the ocean,” he charged. “One billion people use 75% of the stuff and six billion people want to be like that one billion.”
If something doesn’t change and change fast, the global economy will be destroyed, he warned, noting that the world has been around for 4.5 billion years, (but) the Industrial Revolution for just 200 years.
“We treat the earth as if it is a patient on life support.”
Save the Earth!
What to do? According to Polman, two issues, climate change and poverty, demand immediate action. Climate change affects the poor, he told the audience. According to the World Bank, 100 million people will fall into poverty due to climate change.
Is the cleaning industry part of the solution? Hmm, maybe. Home cleaning product marketers and their suppliers have shown a partial commitment to the Roundtable on Sustainable Palm Oil—but certified palm oil only accounts for 20% of the total used by the home care industry. Elsewhere, regarding greenhouse gas emissions, Polman said that home care products are responsible for 40 metric tons of the stuff annually.
“Yes, we’ve lowered water temperatures, but it’s just a pimple. We need to do more. It’s in our interest to work together (on the issue),” he insisted. “It takes courage to do that.”
Next, Polman turned his attention packaging waste, noting that just 10% of home care packages get recycled.
“In 30 or 40 years, we’ll have more plastic in the ocean than fish!”
And, while on the topic of oceans or more specifically H2O, Polman said water should be No. 1 or No. 2 on the industry’s priority list. He pointed out that India is suffering through a two-year drought; one that impacts hundreds of millions of people as, according to one estimate, about 700 million of the country’s 1.3 billion residents are connected to agriculture. The US Department of Agriculture projects that wheat production will tumble so far that India will import one million metric tons of the grain. Polman warned that more conflicts will be fought over water in the future.
“I didn’t do a lot of due diligence on the Seventh Generation deal,” he confided to the audience, referring to Unilever’s recent acquisition of the environmentally-friendly, fast-moving consumer goods marketer, which had sales of more than $200 million in 2015 and has posted double-digit growth, year-on-year, for the past decade. “I liked their mentality to think seven generations ahead—that’s the mentality we need to solve the world’s problems.”
It’s a mentality that is popular with some of Unilever’s competitors, too.
According to a Bloomberg report, Unilever’s recent moves have put pressure on the world’s biggest household products company to make some acquisitions in the green cleaning space. Philip Gorham, an analyst at Morningstar Inc. speculated that buying a brand like Honest Co. or Method Products could help P&G appeal to younger consumers.
“The consumer products industry is going niche,” he told Bloomberg. “Any number of the multinational consumer product manufacturers would want companies like Honest Co. and Method Products in their portfolio.”
Keep It Clean
Green is a priority, but hygiene, too, is a major problem in much of the world. According to Polman, 1000 kids die every day from poor sanitation. But some organizations are making progress. Polman lauded the efforts of the World Toilet Organization (WTO), a global non-profit organization committed to improving toilet and sanitation conditions worldwide.
“It’s the only WTO that works in this world,” he quipped.
WTO focuses on toilets instead of water, which receives more attention and resources under the common subject of sanitation. Founded in 2001 with 15 members, it now has 151 member organizations in 53 countries working toward eliminating the toilet taboo and delivering sustainable sanitation. WTO is also the organizer of the World Toilet Summits and World Toilet Expo and Forum, and initiated the World Toilet Day, which takes place on Nov. 19.
Polman also took time to promote Global Handwashing Day, which is celebrated annually on Oct. 15—noting that it fits perfectly with the industry’s business model.
“Eight million kids don’t make it past five years old, due to poor hygiene,” he reminded the audience. “We spent billions looking for a plane, and yet, (the equivalent of) seven 747s full of children crash every day! What are we doing?”
He asked the audience if the industry’s goal was just to be “less bad” than other industries or to make real change.
“It takes courage, but isn’t it worth it?” he asked. “We can’t outsource responsibility!”
Or launch its way to prosperity. According to Polman, there were 5,900 home care product launches in 2015—91% of which made some sort of environmental claim.
“My personal favorite is a laundry detergent that makes a gluten-free claim,” he deadpanned. That unscented liquid laundry detergent, is also billed as being vegan, kosher and nut-free.
“We’ve gone off the rail,” he charged. “We have to think about transparency.”
Luckily, for consumers and the world, things may be changing. Observers say The Paris Agreement, which will mitigate greenhouse gas emissions beginning in 2020, represents a real turning point. The Agreement, forged within the United Nations Framework Convention on Climate Change, went into effect on November 4. At press time, nearly 200 members had signed it, including China, the US, the EU and India.
The Agreement has 17 Development Goals, several of them with ties to the home cleaning industry. They are: no poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry innovation and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; life below water; life on land; peace, justice and strong institutions; and partnerships for the goals.
“We have enough projects to invest in and we have more money than we know what to do with, but we can’t get them together,” he moaned. “A $1 investment in nutrition has a $17 return and $1 invested in sanitation has a $7 return.”
Despite all these targets, too often government, corporations and their researchers work in isolation. Instead, individuals and companies should put aside their personal ambitions and goals and work toward the common good.
“In 15 years, let’s meet at the UN in New York City and proclaim we did it,” Polman concluded. “I have to be an optimist—it’s too late to be a pessimist.”
If Polman provided a dark view of the current state of the cleaning industry, other industry executives painted a decidedly brighter picture of the industry’s future. Shailesh Jejurikar, president, global fabric care and brand building organization, P&G, noted that the world is moving at a fast pace, with plenty of problems, but plenty of opportunities, too. Taking a look back, Jejurikar noted that it took 150 years for the UK GDP to double following the Industrial Revolution, the US GDP doubled in 100 years, but China and India GDP each doubled in just 15 years.
“Change will never be as slow as it is today, ” he warned. “We always scale and launch; now we must launch and scale. We must run scared toward a lighthouse of innovation.”
Too often, targets move during product development, that’s why researchers must rely on disruptive innovation based on guesstimates of where markets and consumers are heading not where they’ve been.
“Disruptive innovation helps change and improve consumers’ lives,” Jejurikar insisted.
This is especially true in the world of cleaning. But how to create disruptive innovation? The P&G executive suggested a three-point plan:
- Extract insights from trends;
- Build an ecosystem; and
FMCG companies may never be sure where consumers are headed, but there is a plethora of experts who are willing to point executives in the right direction. Craig Vogel, president, Live Well Collaborative, noted that women make more than 90% of decisions on key issues such as home ownership, home furnishings and vacation, as a result the female-led economy represents a one trillion dollar opportunity for marketers. Another key group are aging consumers, who, now more than ever, are aging in place, rather than retiring to retirement homes.
“We live longer; now, how can we live better?” Vogel asked. More importantly, how can the home cleaning industry help women and older consumers live better? He explained that yoga has become a $27 billion industry in the US and that consumers are looking for products that keep their yoga outfits and mats clean. The Live Well Collaborative was formed in 2007 at the University of Cincinnati to help companies innovate for the 50+ consumer.
“What do your products do to enrich people’s lives?” he asked.
Household cleaning product marketers would argue that their formulas do plenty to enrich consumers’ lives—reduce infection, improve health and even boost self-esteem. Last month, the Centers for Disease Control reminded visitors to its website (www.CDC.gov) that cleaning and disinfecting are part of a broad-approach to prevent infectious diseases. The CDC urges consumers and maintenance staffs to clean and disinfect surfaces and objects that touched often as well as perform routine cleaning and disinfecting procedures correctly.
The cold and flu season is underway in the Northern Hemisphere, which could provide a lift for the ailing spray disinfectant category, according to Information Resources Inc., Chicago, sales of these products in multi outlets fell more than 3.6% to $288 million for the 52 weeks ended Sept. 4, 2016. Nearly every major player recorded a decline, but Clorox’s spray disinfectant share plunged more than 33%, according to IRI (see chart).
Overall, IRI puts household cleaning products sales in US multi-outlets at more than $3.3 billion, a slight decline over the previous year. But some categories performed better than others. For example:
- Abrasive tub/tile cleaner fell 4.3% to $111.5 million;
- All purpose cleaner/disinfectant rose 2.3% to $1.1 billion;
- Chimney cleaner/soot remover rose 2.0% to $495,702;
- Drain cleaner rose 2.6% to $300.7 million;
- Glass cleaner/ammonia fell less than 1% to $233.8 million;
- Lime/rust remover rose 2.6% to $47.6 million;
- Nonabrasive tub/tile cleaner rose less than 1% to $410.8 million;
- Oven/appliance cleaner rose 1.6% to $179.9 million;
- Specialty cleaner rose 5.4% to $109.3 million; and
- Toilet bowl cleaner rose 2.3% to $520.6 million.
But to that list of retailers that includes food, drug, mass, club and dollar stores, IRI may want to add Amazon. The one-time bookseller is determined to make a big splash in home care, according to Torsten Pilz, VP-global specialty fulfillment. Pilz’s prediction shouldn’t be taken lightly. Since its founding in 1994, the company has grown into a $13 billion retailer with 245,000 employees and 125 fulfillment centers holding 100 million items. But the e-commerce giant is not above taking on traditional retailers, too. Just last month, Amazon announced plans to open convenience stores!
“We don’t know how the world will go,” Pilz admitted in a nod to the future. “But people will never ask us to raise prices, reduce selection or move slower.”
Hmmm—sounds an awful lot like Walmart’s mantra from about 20 years ago. Which just proves that astute household care marketers and their suppliers should continue to search for the next big thing even as they focus on eliminating the smallest of pathogens and specks of dust.
The Consumer Specialty Products Association (CSPA) annual meeting will be held Dec. 5-8 in Ft. Lauderdale, FL at the Marriott Harbor Beach Resort. This year’s annual meeting will offer guidance on what new federal environmental legislation will mean for your company. In addition, it will provide opportunities to engage directly with retail partners, it will provide a platform for discussions regarding ingredient disclosure and other critical issues, according to the Association.
The meeting gets underway on Dec. 5 with a keynote by Alison Levine, team captain of the first American women’s Everest Expedition and author of “On the Edge: Leadership Lessons from Everest and Other Extreme Environments.”
More info: www.cspa.org