Procter & Gamble (P&G) faced several challenges in the past year, mainly influenced by ongoing economic and geopolitical turbulence, particularly in China. Despite these hurdles, the company managed to achieve modest gains in its beauty segment, reporting a 2% growth in organic sales. This increase was supported by slight improvements across various brands and regions, indicating a resilient demand for P&G’s beauty products. The beauty division, while encountering headwinds, showcased its strength in adaptability as it navigated the complexities of the global market.
Within the global hair care segment, P&G’s portfolio saw organic sales increase in the mid-single digits, with contributions from nearly all regions, although China lagged behind. Popular brands like Pantene and Herbal Essences performed especially well, achieving high-single digit growth. The innovative launch of Bare, a minimalist anti-dandruff shampoo under the Head & Shoulders brand, played a crucial role in enhancing sales as consumers increasingly gravitate towards products with simpler ingredients. Additionally, premium brands such as Ouai, Native, and Mielle thrived in North America, reflecting a strong consumer preference for quality and effective hair care solutions.
P&G’s personal care division also shone brightly, boasting double-digit growth driven by brands like Old Spice, Secret, and Native, along with personal care products from Olay and Gillette. Notably, Native made significant strides among Gen Z consumers, showcasing the brand’s ability to resonate with younger demographics through targeted marketing and appealing product offerings. This growth trend in personal care indicates a broader shift towards personal grooming products as consumers prioritize self-care and convenience in their daily routines.
In contrast, P&G’s skin care performance faced a challenging trajectory, primarily attributed to the premium brand SK-II. The brand struggled as geopolitical tensions led to a consumer boycott of Japanese beauty products in China, particularly in light of the controversy surrounding the discharge of treated wastewater from the Fukushima Daiichi Nuclear Power Station. However, SK-II made a notable recovery in the latter part of the fiscal year, thanks to the introduction of super-premium innovations and increased consumer engagement during significant sales events, such as the 11/11 shopping festival. This renewal helped SK-II’s sales in Greater China to grow by 5% during the fiscal second quarter ending December 31.
Innovation played a crucial role in P&G’s growth strategy, particularly with the launch of Olay Melts—water-activated cleansing squares available in three specially formulated varieties: hyaluronic acid, vitamin C, and retinol. This innovative product has positioned Olay to gain more market share in the competitive U.S. mass cleansing category, appealing to consumers who seek quality and convenience. Such innovative efforts underline P&G’s commitment to staying ahead of market trends and consumer preferences.
Amid these developments, P&G saw a shift in its leadership within the global skin and personal care divisions as Markus Strobel, the former president of global skin care and personal care, retired in August 2024. In a strategic move, Freddy Bharucha was appointed as the new president for global personal care, while Sue Kyung Lee was elevated to the role of president for global skin care. These leadership changes are indicative of P&G’s effort to revitalize its strategies moving forward. Additionally, on April 30, 2024, the company finalized the sale of its Vidal Sassoon brand in China to Henkel, reflecting a realignment in focus as P&G continues to streamline its portfolio and address the ever-evolving demands of the beauty and personal care landscape.
Overall, Procter & Gamble’s performance in the beauty sector illustrates a complex landscape marked by both challenges and opportunities. The company’s strategic approach, focusing on innovation and adapting to consumer preferences, has allowed it to maintain modest growth in a year of external pressures. As they navigate these evolving dynamics, the leadership transitions and strategic realignments hint at a robust future for P&G and its esteemed portfolio of beauty and personal care brands.