September 15th, 2011

Hola: P&G Seeks Latino Shoppers

Wall Street Journal

Expect more Spanish on your tube of Crest toothpaste.

Procter & Gamble Co., looking for ways to boost its sluggish U.S. business, is accelerating its efforts to win over Hispanic shoppers. Using insights turned out by its army of researchers, P&G is tweaking products, retargeting its marketing, changing its mix of celebrity spokeswomen and making greater use of Spanish on its products.

The motivation is simple: Hispanics accounted for more than half of the gains in the U.S. population from 2000 to 2010, according to the U.S. Census Bureau, and their younger, bigger families are a good fit for the maker of Pampers diapers and Tide detergent.

P&G added exotic fragrances to its Febreze air fresheners; is pushing Gain for hand-washing dishes over dishwasher detergent Cascade; lavender-scented Downy tested well with Hispanics.

But P&G has some catching up to do. Its penetration of that growing group of buyers lags in key areas like toothpaste, where rival Colgate-Palmolive Co. has leveraged its strength in Latin American markets to build a dominant position in the U.S.

“You’ve got to consistently shift your business model to target where the growth is,” says Melanie Healey, P&G’s group president of North America.

The U.S. has been the bane of the P&G’s results lately. More American shoppers remain reluctant to spend, hampering sales growth for P&G’s brands and the overall household-products industry. Sales in emerging markets, where P&G is aggressively expanding, are growing briskly, but it still depends on the U.S. to deliver the biggest share of its sales and profit.

Sales in the U.S. Hispanic population, however, are showing better growth. In the past decade, the demographic’s spending on laundry, household-cleaning supplies and personal-care products grew nearly three times faster than non-Hispanics’ outlays, according to market-research firm Packaged Facts.

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