Procter & Gamble (P&G)

Procter & Gamble Co. (P&G) is a leading global household and personal care products company. At one time it encompassed nearly two hundred brands, but in 2015 scaled back to focus on about sixty-five product lines. Many of its brands have become household staples such as Tide, Crest, Pampers, and Tampax.

The company, which has headquarters in Cincinnati, Ohio, sells products in more than 180 countries. In 2024, P&G had approximately 108,000 employees and net sales of nearly $84 billion. In addition, the company conducts research on numerous products in its laboratories around the globe.

History

English candle maker William Procter and Irish soap maker James Gamble may have never met had they not married sisters. They combined their business efforts at the suggestion of their father-in-law and officially founded P&G in Cincinnati, Ohio, on October 31, 1837, with assets of about $7,000.

By 1859, P&G had eighty employees and more than $1 million in sales. The US Civil War boosted the company's growth when the Union army employed it to supply items to troops. In 1879, Gamble's son James Norris Gamble, a chemist, created a white soap, which Procter's son Harley T. Procter dubbed Ivory. It became one of the company's best-selling items.

P&G became the first company to develop a profit-sharing plan, created by Procter's grandson, William Cooper Procter, in 1887. The program—which proved long-lasting—gave employees a stake in the company. In 1890, Procter's son William Alexander Procter, became head of P&G. He died in 1907, and his son William Cooper Procter became the new head of the company.

The company introduced the first vegetable shortening, Crisco, in 1911. Four years later, P&G became an international company with its first plant in Canada. However, by 1920, the company saw a lag in production. Instead of laying off employees, it changed the way it sold items to retailers. In 1924, the company became one of the first to add a market research department to study consumer trends.

William Cooper Procter, the last member of the Procter and Gamble families to run the company, stepped down in 1930, and Richard R. Deupree became the new head. In the early to mid-1930s, P&G introduced Dreft, its first synthetic detergent, and Drene, its first shampoo. P&G celebrated its one-hundredth anniversary in 1937 with sales of more than $230 million.

In 1945, P&G introduced Tide, which became the top-selling detergent in the United States. During the next few years, the company focused on developing new products, including shampoos, toothpastes, and cleaning items. Neil H. McElroy became the new head of the company in 1948. By the mid-1950s, P&G had operations in Asia, South America, and Europe. It introduced Crest toothpaste in 1955. The new type of toothpaste was made with fluoride, which helped to prevent cavities.

In 1957, the company purchased paper products company Charmin Paper Mills, further expanding its line of products. The company introduced Downy fabric softener and Pampers disposable diapers in the early 1960s. It acquired the Folgers company in 1963—its first food product company. In 1973, P&G expanded to Japan, and Ed Harness took over the company the next year. By the end of the 1970s, the company expanded into pharmaceuticals.

P&G's sales reached $10 billion in 1980, and John G. Smale became head of the company in 1981. For the next few years, the company focused on expanding its pharmaceuticals and personal health care products. It released Always/Whisper, a feminine product, which became one of the top brands in the world by the mid-1980s. At the end of the decade, P&G introduced Pert Plus/Rejoice, a two-in-one shampoo and conditioner, and acquired Noxell, which made CoverGirl and Noxzema products.

The 1990s saw a new leader with the appointment of Edwin L. Artzt and the expansion of products geared toward men, including Old Spice. In 1992, P&G introduced Pantene Pro-V, which became the fastest-growing shampoo line in the world. The following year, the company's sales reached more than $30 billion—with international sales accounting for more than half. It continued to acquire brands such as Duracell batteries and Tambrands feminine products, and introduced new products such as Febreze and Swiffer.

P&G underwent major changes in the 2000s and experienced stock declines. A.G. Lafley, the new head of P&G, promised to refocus the company and by the mid-2000s, it grew by 40 percent, doubled profits, and increased stock margins. P&G merged with Gillette Co. in 2005. More products followed, and the company continued its global reach. Lafley retired in 2009, and Robert McDonald became the new head. However, Lafley came back to the company in 2013 to help turn around its sales. In 2014, P&G restructured its product line to focus on its best performers. A further sell-off of brands followed in 2015.

In 2016, within a year after David Taylor took the helm as CEO, P&G reported growth once more, which Taylor attributed to a combination of the renewed focus on consumer favorites as well as innovative new products, such as Febreze air fresheners for cars. At the same time, its Gillette brand continued to suffer as facial hair continued to remain more in style amidst fierce competition. In 2018, however, the company announced plans to acquire the consumer health assets of the German firm Merck Group in a deal worth approximately $3.9 billion.

In 2021, businessman Jon Moeller was named president and CEO of the company.

Controversies

In its long history, P&G experienced numerous product recalls, lawsuits, and scandals. Despite these, the company has survived and continues to grow.

In 1980, P&G had several lawsuits filed against it for its Rely tampons. Courts found P&G negligent of selling a defective product after the tampons were found to increase the chance of toxic shock syndrome among users. P&G stopped selling the tampons later that year.

The company received much criticism for testing its products on animals. Over the years, it took efforts to reduce using animals to test its products, reporting that it had invested millions of dollars to research and develop alternatives. Today, it uses these alternatives to test more than 99 percent of its products.

In 2011, the European Union fined P&G and competitor Unilever for price-fixing on laundry detergents. P&G paid more than $200 million in fines for not reducing its prices even though it cut product sizes.

In 2017, the P&G ad "The Talk," featuring Black mothers talking about racial bias with their children, was accused by critics of being anti-police and anti-White. Despite such backlash, many viewed the ad positively, and it received a 2018 Emmy Award.

Despite such controversies, in the early twenty-first century, P&G frequently featured on media lists of top companies and most desirable employers. It worked to maintain a positive image in the public mind, emphasizing its social and environmental responsibility efforts.

Bibliography

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Beer, Jeff. "How P&G Found the Insight Behind Its Emmy-Nominated Ad 'The Talk.'" Fast Company, 18 July 2018, www.fastcompany.com/90203740/how-pg-found-the-insight-behind-its-emmy-nominated-ad-the-talk. Accessed 11 Dec. 2024.

Blum, Sofia. "One Year Later: How P&G Has Changed under New CEO David Taylor." CNBC, 27 Oct. 2016, www.cnbc.com/2016/10/27/one-year-later-how-pg-has-changed-under-new-ceo-david-taylor.html. Accessed 11 Dec. 2024.

"Company Found Negligent in Toxic Shock Disease Suit." The New York Times, 20 Mar. 1982, www.nytimes.com/1982/03/20/us/company-found-negligent-in-toxic-shock-disease-suit.html. Accessed 11 Dec. 2024.

Ng, Serena. "P&G to Shed More than Half Its Brands." The Wall Street Journal, 1 Aug. 2014, www.wsj.com/articles/procter-gamble-posts-higher-profit-on-cost-cutting-1406892304. Accessed 11 Dec. 2024.

"Our Commitment To #BeCrueltyFree." Procter & Gamble, us.pg.com/cruelty-free/. Accessed 11 Dec. 2024.

"P&G History." Procter & Gamble, us.pg.com/pg-history/. Accessed 11 Dec. 2024.

"Procter & Gamble." Forbes, 11 Dec. 2024, www.forbes.com/companies/procter-gamble/. Accessed 11 Dec. 2024.

Steinhauser, Gabrilie. "EU Fines Unilever, P&G for Detergent Price-Fixing." USA Today, 13 Apr. 2011, usatoday30.usatoday.com/money/world/2011-04-13-eu-fines-companies.htm. Accessed 4 Feb. 2015.

"Who We Are." Procter & Gamble, us.pg.com/who-we-are/. Accessed 11 Dec. 2024.