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Inside P&G Beauty’s Modern Strategy

P&G Beauty's Alex Keith and Markus Strobel open up about consumer obsession and doubling down on sustainability.

P&G Beauty has shifted dramatically over the past decade by shedding luxury brands and then acquiring a curated portfolio of new ones.

The beauty business today is “definitely not the same rodeo,” said Alex Keith, CEO of P&G Beauty, in a conversation with WWD and Beauty Inc executive editor Jenny B. Fine, and P&G Beauty president of skin and personal care Markus Strobel.

Unlike before, when P&G beauty had brands across a broad array of categories, today, the business is focused on areas where Keith feels it has expertise. “As we looked at those categories and saw the blurring and the growth and the opportunity at different retail channels to meet different needs at different price points over and above our core beauty business, we saw a great opportunity,” Keith said.

Hence, the company’s newly minted Specialty Beauty division, which houses acquired and incubated brands including Farmacy, Tula, Ouai and First Aid Beauty.

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Keith was quick to point out that growth was also coming from P&G Beauty’s mass business, which saw both Old Spice and Safeguard grow to more than $1 billion in annual sales recently.

The new brands also have major potential, she said. “They can grow to be incredibly big, and we’re counting on the teams that have been leading them so far to deliver that growth,” Keith said.

The shift is a major one from the way P&G used to think about acquisition integration. Strobel described today’s approach as a “two-way street” where both companies learn from one another, and said that P&G Beauty doesn’t plan to overpower brands anymore, instead preferring to move into a place of “positive Procter-ization.”

The acquisitions also bring in new talent, as P&G is starting to open its eyes more to external hiring and welcoming former employees to come back, the executives said.

Strobel said the business continues to rely heavily on consumer insights, and is in #consumerobsession mode. “The hashtag is just there to make it sound a bit cool,” he said, noting that the business also has a test-and-learn approach. “You’d rather have skeletons in the closet than anything on the market, right?”

He cautioned leaders against jumping into things they don’t fully understand, including the metaverse and NFTs, and said that when it comes to livestreaming, P&G is working to get its beauty consultants ready to go.

Keith, who leads companywide sustainability efforts noted that executives sometimes project faux fluency in that arena, too. But going forward, she said leaders will need to do better.

“Someone can stand up and say, ‘scope one, scope two, scope three,’ and sound like they know what they’re talking about when they don’t know what they’re talking about,” Keith said. “It’s really important as leaders we all get to some fundamental understanding.”

P&G has been able to get its plants to a point where they are zero waste to landfill and running on renewable energy, which in the end helps consumers lower their individual carbon footprints, Keith said.

While 90 percent of consumers say they want to lower their carbon footprints, only 20 percent have made any changes to do so, she said. With P&G’s manufacturing shifts, consumers can now buy their daily-use products that have a reduced footprint without making any changes, Keith noted.

“But, in order to do that, we need to have a consumer obsession — I’m not as cool as Markus, I won’t say hashtag-consumer-obsession — but we have to get those insights and we have to very creatively solve problems,” Keith said.


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