| News for the food, beverage and consumer packaged goods industry | December 15, 2010 |  | |
 | | | Looking Back at the Year | | - An interview with the CEO of Clorox
 | | | Don Knauss,
Chairman and CEO, Clorox | Don Knauss has been the chairman and CEO of Clorox since 2006.
As economic recovery begins, consumers are still pinching pennies and retailers are demanding that manufacturers increasingly offer greater value and quality. What must successful CPG companies do in 2011 to reignite growth?
To be successful, companies must maximize consumer value. That means carefully managing price gaps versus retailer brands, while maintaining a keen focus on innovation that solves simple consumer problems.
Innovation is critical. If Apple can sell $800 iPads in this economy, we ought to be able to figure out how to sell more bleach and trash bags, but it takes innovation. For example, two of our recent new products -- Glad ForceFlex trash bags with a stretchable drawstring and Glad Odor Shield trash bags with Febreze odor-neutralization technology -- offer consumers more benefits for a better value and are helping us grow market share. In fact, Glad ForceFlex trash bags grew U.S. market share in our most recent fiscal year, solidifying leadership in the premium trash bag category, and sales for the first four months of our new fiscal year were up in the low double digits -- this in a category that's essentially flat.
Innovation is critical in the CPG world, but many companies fall short. What key steps are industry leaders missing?
Consumers are looking more to value channels like club and dollar to meet their needs and budgets. In addition, there's a sweeping demographic change under way in the U.S. that affects whom we want to reach. We're reshaping our portfolio toward higher-growth categories, channels and countries, and focusing on retail channels that focus on value and higher growth consumer segments like U.S. Hispanics. For example, our Pine-Sol brand recently commissioned an in-depth Hispanic consumer segmentation study. We've already used those insights to develop new advertising that drives brand awareness among Hispanics. This work dovetails with the brand's innovative African-American-targeted marketing.
Research firm Mintel has released its trend predictions for 2011. What trends stand out to you, and what will you be keeping an eye on in the coming year?
In addition to the enduring trends around value and affordability and an increasingly multicultural marketplace, there are two key trends we're continuing to focus on. First, infection prevention is a global issue that will continue and could worsen. Our infection-prevention platform, which focuses on providing effective products to kill germs that can lead to illness, leverages our disinfecting strength and creates competitive advantage.
Second, we're continuing to focus on sustainability and consumers' personal environments. Our Green Works and Burt's Bees brands address consumers' growing interest in using naturally derived personal-care and home-care products. By addressing a growing desire for natural products that perform as well as or better than traditional ones, we're helping attract more consumers to these categories. Despite the challenging economic environment, growth in the natural-personal-care category has accelerated. And although the natural-home-care category is still flattish to slightly down, we're seeing some improvement. I believe as the economy improves, this category will turn disproportionally to the positive.
The Grocery Manufacturers Association recently announced that it would work with the Food Marketing Institute to develop labeling standards for the front of product packages. What other health and wellness initiatives will you and your business be keeping track of in 2011?
One area we're focusing on is acute infection prevention across multiple categories, such as disinfecting products and vitamins. We're working with key retail partners on bringing acute infection prevention to life with compelling programs that address consumer interest in staying healthy in the present and near future.
We'll also continue to invest in our "Ingredients Inside" program, which informs consumers what's in Clorox Company products. We believe people have a right to know so they can make informed choices when it comes to products they use in and around their homes. We introduced our product ingredient communication program nearly three years ago with the Green Works brand, and about a year ago launched a website with the ingredient listing of all our household and commercial cleaners and disinfectants in the U.S. and Canada. Recently, we expanded the site to provide a comprehensive glossary to help consumers understand the function of each ingredient. We offer the information in French Canadian, and plans are under way for Spanish translation.
You said one question on the minds of many CPG companies is, "How long will this economic environment go on?"
We need to be prepared that the economy could continue to be a drag on the growth of our categories. Meanwhile, we believe staying focused on affordability, value and innovation is critical to success in our sector. We're aggressively managing competitive price gaps, and continuing to invest in the health of our brands with strong consumer communications, innovation, support for new products and a focus on bringing value to the consumer. I believe these are the right things to ensure we're in a strong position to continue winning in the marketplace, and to strengthen our categories as the economy eventually returns to health.
Did you miss Part 1 of the GMA SmartBrief Year-End Report? Read it here. | | | | |
| Your Predictions |  | | | - What do you view as the biggest CPG product trend of 2010?
| sodium/sugar/HFCS reduction |  29.90% | | private labels |  28.32% | | "natural" claims |  23.37% | | convenience |  14.65% | | other |  3.76% | - What initiative will your brand give the most focus to in 2011?
| health and wellness | 45.33% | | in-store marketing | 21.53% | | social media | 19.26% | | sustainability | 10.20% | | other | 3.68% | - What do you predict will be the biggest topic for the CPG industry in 2011?
| health and wellness | 50.40% | | food safety | 32.72% | | sustainability | 11.35% | | other | 5.54% |  | 33% name confidentiality as top social-media barrier. Over 6,000 execs participated in SmartBrief's original research on social media for business. Develop and implement a targeted social-media strategy with sound data and insights into business trends and best practices. Get The State of Social Media for Business for 15% off the list price. | | Upcoming Events | | | | | | | 
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