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Alex Keith on Reviving P&G’s Beauty Business

The company is taking more risks and dabbling in incubation.

Alex Keith is re-energizing Procter & Gamble’s beauty business — now comprised mainly of legacy drugstore brands — to better compete in the mass market, which is becoming increasingly fragmented due to the rise of naturals and niche.

“Procter & Gamble’s goal is to improve people’s lives, and we put a twist on that for beauty,” said Keith, the group’s president of global hair care and beauty. “Our products have staying power…At our core, we want to create products she notices, she feels a difference and she really loves them.”

Keith took on her current position last summer as the company’s beauty business had at a critical point — sales across its core brands, including Olay, Herbal Essences and Pantene, were in the midst of a consistent slump.

“My team in China looked at me and said, ‘Olay is dead,’ and I said, ‘Well, that’s a good place to start,'” said Keith. “There had been a series of compounding bad choices…the brand was hard to shop [and] we had proliferated offerings that didn’t deliver on our promise of products that make a noticeable difference.”

In efforts to turn Olay around, Keith has eliminated 20 percent of its sku’s and upgraded the brand’s packaging. Olay has also become more active on social media and with influencers under the direction of Markus Strobel, who leads P&G’s skin-care business.

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Keith credits Strobel with reviving SK-II’s stagnating business and turning it into a key sales driver for the company.

Hair care has proven to be especially challenging for P&G. “We have the number-one and two brands in the categories in which we compete, and there was a moment when that was sufficient — that moment has passed,” said Keith. In regards to the acceleration of natural hair care in the mass market, she admitted P&G has “missed some of that happening.” To make up for it, the company has acquired two brands in the natural space — Native Deodorant and Snowberry Skin Care. Keith also revealed a partnership with Kew Gardens that is meant to help P&G speed up the pace of natural innovation by identifying active botanical ingredients it can cascade across its brand portfolios.

She noted that P&G is dabbling in brand incubation. “Part of why I think Procter & Gamble beauty went wrong is that we were so focused on our big brands, we thought they needed to meet every consumer need in the world,” said Keith, who noted that the company has recognized that its core brands can’t be what they are not. “It’s hard to make Olay a natural brand because Olay is for people who want meaningful science and products that make a difference on your skin,” she said.

The company is also dabbling in incubation, said Keith, noting that P&G is in the “early days” of cultivating brands internally to balance the existing portfolio. Said Keith, “Our incubation work is focused on those spaces that are meaningful, growing and probably where our core brands can’t stretch.”

As P&G sharpens its beauty strategy, Keith said the core focus will likely remain on the categories it currently plays in. “Never say never,” she said of another entry into makeup, though she reminded the audience that the company’s decision to exit the makeup category was a strategic one.

But Keith is not shying away from the prestige market. “SK-II has been successful for us and in the marketplace — that retail channel and price tier is very interesting to us, and so I think for sure we’re there and will continue to want to be there,” she said.

It is not just the company’s beauty strategy that is being rejuvenated, but the internal corporate culture as well. Keith noted she and Strobel are empowering their beauty teams to take more — if calculated — risks, and are also forming smaller teams to enable that. “We’re trying to start from the top with more gutsy, intuitive choices. P&G is a very data- and science-driven company. If all decisions are made of art and science, we tend to be 95 percent science and 5 percent art,” said Keith. “We’re trying to pull that continuum more towards the middle, because in beauty that is super important — it’s that gut feeling of what she wants and needs that makes a difference.”