Procter & Gamble disclosed in an earnings call this morning that it plans to divest or shed 90-100 of its brands, in an attempt to streamline and focus on its more successful brands.
“Less will be much more,” P&G CEO A.G. Lafley said. “We are going to create a faster growing, more profitable company that’s far simpler to operate.”
The announcement is the latest attempt by P&G to trim back, following the sale of P&G pet food brands Iams, Eukanuba and Natura to Mars Inc. for $2.9 billion in cash in April, and the sale of Pringles to Kellogg Co. for $2.7 billion in 2012. P&G reported a net sales increase of only one percent last quarter, which Lafley saying the company “could have and should have done better.”
Obviously, the move will effect the agencies working on P&G’s brands, including Publicis Groupe’s Publicis, Leo Burnett and Saatchi & Saatchi and WPP’s Grey. As Adweek points out, “Although these agencies work on big brands like Tide and Crest that won’t be affected by the divestiture, they also handle smaller, regional brands that collectively represent significant chunks of revenue from the world’s biggest marketer.” Last year P&G spent over $9.7 billion on advertising worldwide.