Clorox saw stellar sales of its disinfecting products in the first quarter of fiscal 2010, but consumer demand for green introductions, such as Clorox Green Works Natural Laundry Detergent, were weakened by the recession, the company said during today's earnings call.
The company reported that its profits rose 23 percent to $157 million, compared to $128 million during the same year-ago period. Revenue, however, fell one percent to $1.4 billion.
Sales of Clorox's cleaning and lifestyle products—which include Hidden Valley salad dressings and the Burt’s Bees personal care line—grew the most. Volume growth was up 4 percent, and both segments experienced a 3 percent sales lift. Clorox disinfecting wipes and Hidden Valley salad dressings both contributed to a one-percent total volume increase, but these gains were largely offset by weak consumer demand for its Glad trash bags.
Glad remains the company’s “most challenging business,” according to Clorox. Despite recent innovations like Force-Flex trash bags that “stretch to prevent rips,” the business has come under pressure from heightened competitive activity—both from branded and private label manufacturers—and a price hike due to higher resin costs that left some consumers with sticker shock.
Clorox, however, said it’s not worried as the brand, overall, is “healthy,” and demand in the category is “soft.” The company spent $377 million advertising its brands in 2008, and $268 million through August of this year, per the Nielsen Co. (Figures exclude online spending.)
Consumers seem less likely these days to shell out extra dollars for premium green detergent. Clorox Green Works Natural Laundry Detergent, which began shipping in July, is “off to a slower start than anticipated,” Clorox said, though strong numbers from initial repeat sales trials indicate that the product has potential. Adding to Clorox’s green detergent woes is Wal-Mart's refusal to carry the brand in its channels.
(Procter & Gamble most recently shifted from premium- to value-oriented laundry detergents with the introduction of Tide Basic, a “no bells and whistles” version of its pricey Tide brand.)
Overall, sales of green cleaners are growing at a faster pace than their traditional counterparts, and Clorox maintains there is still room for growth. It is launching a new Burt’s Bees natural toothpaste in January. Marketing will tout the product as “clinically proven to improve oral health.”