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Procter & Gamble Aims to Rejuvenate Pantene

As the world's biggest hair care brand, all eyes are on Pantene

Procter & Gamble Co. is throwing a life preserver to the floundering hair care category with the May overhaul of its $3 billion global Pantene brand.

As the world’s largest hair care brand, Pantene accounts for 13.1 percent of the food, drug and mass market dollar share (excluding Wal-Mart), making it the industry driver. Retailers and competitors alike are counting on the P&G powerhouse to drive some excitement into the flat-to-down category.

The planned reinvention of Pantene is part of P&G’s previously announced crusade to boost innovation by 30 percent in core corporate categories and markets. The overhaul aims to yield more colorful shampoo and conditioner containers and metallic styling bottles, and will slash the stockkeeping unit count by 25 percent (165 pieces to 120) and product collections by 61 percent (14 collections to eight) to make shopping the cluttered hair care aisle — and the brand — more simple. Also of note is Pantene’s change in approach to developing products, from one that for the past 10 years was based on helping women achieve a desired end look to one that will target four distinct hair types (medium-thick, fine, color-treated and curly). Styling products will for the first time be merchandised alongside hair care, too.

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The result, said Bob McDonald, chief executive officer of P&G at the Consumer Analyst Group of New York conference Feb. 18, “is a new line of Pantene products not only much better than before, but also cheaper. New formulas include 13 new ingredients never used before by Pantene, including several new, what we call, smart polymers created in partnership with our external suppliers and academic institutions. We’ve cut the cost of the polymers roughly in half, saving over $50 million a year. The savings were reinvested to improve other product attributes including perfumes and packaging.”

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The project reflects P&G’s commitment to boost innovation in core brands and that for Pantene, “better and cheaper is an innovation strategy. Consumers demand value and value comes in product performance and price,” said Craig Bahner, P&G’s vice president and general manager, North America Hair Care and Color.

Perhaps most important is how the overhaul looks to impact the shopping experience.

“When the consumer walks into the store, once we have reset the shelves, she will see, for example, a shelf for fine hair and collections within that and also styling. The entire hair care regimen for her hair type will be on one shelf.”

While there will be 25 percent fewer sku’s, Bahner said Pantene has held onto its real estate, which varies from retailer to retailer, but inarguably takes up more of the aisle than any other brand.

“It’s about the line up and it’s more spaced out and there’s holding power for the weekend so there’s no empty spaces.”

Proving that Pantene’s new items are more than a new, pretty bottle is Jeni Thomas, a senior scientist for Pantene, who explained the more specific structure design called for different formulas that would perform well on certain hair types. Products for fine hair, for example, contain a new polymer that is included to boost the cleaning power of the surfactant system to help get hair as clean as it can be without stripping it of natural oils, she said.

The new Pantene architectures include Fine Hair Solutions, which offers three versions: Flat to Volume, Dry to Moisturized and Fragile to Strong. For medium-thick hair, there’s Medium-Thick Hair Solutions in four versions: Frizzy to Smooth, Breakage to Strength, Dry to Moisturized and Flat to Volume. For curly hair, there’s a Curly Hair Series in two versions: Curls to Straight and Dry to Moisturized. For color-treated hair, there’s Color Hair Solutions in six versions: Color Preserve Shine, Volume, Smooth, Blonde Expressions, Highlighting Expressions and Brunette Expressions.

Prices will remain the same, from $3.99 to $5.99 for shampoo, conditioners, stylers and treatments. A new ampoule item will sell for $7.99.

Retailers saw what the new range would look like months ago when last September P&G outfitted a 48-foot trailer complete with a 20-foot planogram and 10,000 bottles of Pantene so buyers could visualize the new displays, packaging and merchandising in person. The trailer traveled 20,000 miles across the country to 15 different retailers, P&G said.

“Sometimes there are things you can share with power point slides and sales samples. The reinvention of the brand and that [approach] was not sufficient,” said Bahner.

Pantene’s last revamp occurred in 2007, when containers got a facelift, along with new ads and a new logo. While Bahner contends the 2007 effort “was a refresh, not a reinvention,” retailers said at the time they were disappointed with the effort.

“When they did a revision the last time, it was such a disaster. They did smaller sizes at higher prices, but Wal-Mart kept it at lower prices and to remain competitive many [other] retailers had to keep it down in price,” said a former retailer.

Overall, the industry said it is ready for something new from the category’s biggest player. And Pantene’s performance could use a boost, too. According to Information Resources Inc., for the 52-week period ended Jan. 24, excluding Wal-Mart, many of Pantene’s shampoo sku’s that have been on shelves at least a year show declines, including Color Revival, Full and Thick and Ice Shine. Performing well is Beautiful Lengths, with a 39 percent sales increase. Pantene also claims the third best-selling shampoo sku ranking, Moisture Renewal, behind Suave Naturals and private label, respectively, reflecting the impact the economy has had on how consumers spend money on a commodity beauty item such as shampoo.

According to one hair care expert, Pantene needs help.

“Walgreens has a private label hair care line, called BioInfusion, and that will outsell Pantene this year,” the expert said.

Pantene, often regarded as the “hair care brand for all,” is also feeling competition by some of the category’s much smaller players who make a tighter consumer focus.

TRESemmé, for one, is an industry favorite, most notable for its success in the styling segment. Owned by Alberto-Culver Co., TRESemmé is positioned as affordable professional hair care with its eye on the twentysomething, savvy, fashionable consumer. Jamie Schwab, marketing manager for TRESemmé, said by practicing marketing in its core sense the brand’s philosophy is getting out in messaging.

“Be it with integrations, four seasons of ‘Project Runway,’ sponsorships at fashion week, consulting with our style teams, we are constantly getting our message out,” Schwab said.

But it wasn’t always easy for the brand, Schwab said. “Over the years, there was more of an awareness problem. Awareness was lower than where we wanted it to be.” But IRI data shows that today TRESemmé hair sprays are far and away the top performers in the segment, and the brand holds the number-one styling sku spot in the category. Overall, TRESemmé is number four in hair care, Schwab said. “We have been on a steady rise. We have set ourselves up as someone to watch.”

Eyes are also on Organix, the fastest-growing hair care brand in food, drug and mass, according to IRI data. Ross Reback, the ceo of Vogue International, Organix’s parent, said it’s really the responsibility of the big players who dominate the shelf space to create some excitement since “they determine the way the wind blows for the category.”

Organix, said Reback, had at first been turned down by Walgreens, Rite Aid and CVS because it was dubbed a “shelf hog” due to its round bottle, and that organics overall “won’t be that big” and that “no one cares whether a formula contains sulfates.” Now, Organix is sold in 50,000 stores nationwide, as well as in international markets. “They have all been proven wrong,” said Reback. For the 52-week period ended Dec. 27, Organix grew 47 percent. Its recent partnership with the new “Alice in Wonderland” movie is getting the brand into the limelight, too.

“Hopefully this effort will work,” said a former retailer, who is now a consultant. “What is so frustrating is that the hair care industry is watched very closely, but it has literally been very flat, going on three years. And then something new comes along, but nothing lifts it up. The category may be just too confusing.”

Styling, the consultant added, contributed the biggest growth to the category over the past several years, starting with John Frieda’s Frizz Ease more than 12 years ago.

“I think it is a wait and see situation. Pantene has done some amazing advertising, like with the Salon Challenge teaser last year,” said the consultant. “You can tell they put a ton of money into that. But in the end they will make it work no matter what it costs. That’s the way it feels.”