2. Presentation Topics
• History
• Background
– Environmental
• Impacts
– Social
• Stakeholders involved
• Government policy
– Economic
• Corporate overview
• Industry analysis
• Solution
– Environmental
– Social
– Economic
• Challenges
3. History of P&G
• October 31, 1837, Procter & Gamble was born
– William Proctor, a candle maker from England, and
James Gamble, a soap maker from Ireland
• 1859 sales reached $1million
• 1862 supplied Union Army with soap and candles
• 1879 Ivory
• 1919 P&G sells directly to retailers
• 1920-1930 sponsor radio programs – “soap
operas”
http://www.pg.com/translations/history_pdf/english_history.pdf
4. History of P&G
• 1930 acquire Thomas Hedley in England
• 1931 Brand management is born
• 1933 Synthetic detergent
• 1946 Tide
• 1947 Prell shampoo
• 1955 Crest with fluoride
• 1957 purchase Charmin
• 1960 “Downy” fabric softener
• 1972 “Bounce” fabric softener sheets
• 1987 Celebrates 150th Year Anniversary
http://www.pg.com/translations/history_pdf/english_history.pdf
5. P&G 1987:
Repositioning Lenor Fabric Softener
Promised to
reduce
packaging on
Lenor fabric
softener by
85%
• Tight guidelines on packaging Lenor West Germany• Environmentally friendly
is the largest • 75% if West German
and promotion
• Retailers “10 commandments”
Regulations Fabric fabric softener
market in
households line-dried
their laundry
• Government
• Environmental Softener Europe • Lenor’s sales volume decline
7.5% annually and was
predicted to continue
• 4-from-one concentrate
Lenor refill • Laminated cardboard carton (similar
package to milk carton)
• Stan-alone soft plastic package
“doypack pouch”
• Waste reductio
• Less packaging
• Reusable
6. Why?
Environmental Social Economical
• Shift from defensive • Understanding their • Stem eroding sales
thinking towards customer’s needs volume and market
proactive and successful • Taking all stakeholders share
approaches into consideration
7. Once upon a time…
Increasing waste outputs
Chernobyl
Environmental concerns spiked due to…..
Dense population sizes
Scarce natural resources
Limited lands
8. Lenors’s contribution to the problem
• 5% Softening ingredients and 95% water
• Packaging in hard, high density polyethylene
plastic containers
• Focus more on Price/Scent vs Environmental
9. Then the European Nation Took
Action…
1986 survey of 11,8000 Western, 72% where
concerned about problems such as acid, rain,
landfill capacity, and the greenhouse effect
Implemented Waste Avoidance Utilization,
Avoidance, Utilization, and Disposal Act
By 1985, West Germans recycled more than ⅓ of
waste...
The Blue Angel Program was implemented
10. Lenor in Response
• Lenor applies refill pack
• Receives great responses, however questions
the popularity if implemented nationally….
• Concentrate Exist Today
16. ECONOMIC PROBLEM
Between 1984 and 1986 Lenor’s sales volume fell 7.5% annually due to:
1) Aggressive competitive pricing
2) Eroding Brand Image
3) Shrinking Market due to Environmental concerns.
17. Lenor in East Germany
• Dominated East Germany with 37% Market
Share
• Selling Lenor’s Iconic Blue 4 liter Bottle
• Consumers Differentiate product on
Price/Scent
• Price Wars drove average profit margin from
12.7% in 1984 to just 2.5% in 1986
• 98% store penetration by 1987
19. Rethinking a Titan
• New Packaging vital for P&G’s Bottom line
• Must become more environmentally sensitive
in order to appeal to the East German Market
• Implications for their 5 Billion Consumers
worldwide
22. Plastics
• Moldable type of organic polymer
• Petroleum based
• Two types:
– Thermoplastics
• Become a liquid when heated
• Can be molded & cooled many times with no degradation
• Softer than thermo-set
• Easier to recycle than thermo-set
– Thermo-set plastics
• Can only be molded once
• Bulky short molecules
• Decomposes after being re-heated
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
23. Manufacturing Plastics
Environment
• In 2007:
– 92,835 million pounds - thermoplastic
– 4,838 million pounds – thermoset
• Energy:
– Oil used to make plastics is 4% of total oil
consumption (87.2 million barrels a day)
– 4% only accounts for plastic feedstock selling
plastics
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
24. Manufacturing Plastics
Environment
• Energy:
– Plastics industry in the United States consumes about
6% of all the energy used by American industries
– In 1998, rubber and plastics product manufacturers
used 320 trillion Btu
– 320 trillion Btu is approximately $3.5 billion
• Co2 Emissions:
– In 1994, U.S. plastics industry was responsible for 4.7
million metric tons of carbon dioxide emissions.
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
25. Manufacturing Plastics
Economic
• Plastics facilities in the U.S. 18,585
• Employees of the plastics industry 1,130,300
– Worker wages of the plastics industry
$28,356,100,000
• U.S. plastic sales $378,830,000,000
• Exports from the U.S. $43,040,000,000
• Imports to the U.S. $37,580,000,000
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
26. Manufacturing Plastics
Social
• Health risks associated with plastics do not
come from plastics themselves but from
additives like plasticizers
– Certain plasticizers have found to be both
carcinogenic
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
28. What are they made of?
• Bioplastics are plastics made out of biopolymers
– biopolymers are polymers that come from a biological
source.
• Bioplastics can be made using plant, animal, or
bacterial sources:
– wheat, corn, rice, potatoes, barley, and sorghum.
– Natural oils from soy and palm
– Bacteria
– Genetically engineered organisms
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
29. Starch Based Bioplastics
• Account for 80% of the bioplastics market
– Pure starch can absorb water from the air and degrade.
– Organisms can also metabolize pure starch, as it is a
carbohydrate.
– The fact that starch disintegrates in liquids makes it ideal
for drug capsules.
– Used to make:
• plant pots
• drinking cups
• disposable shopping bags
• Cutlery
• coated cardboard
• diaper foil.
http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
30. Environmental Implication of
Bioplastic
Strengths Weakness
• Cheaper than plastic productions • P&G products are not well known for
• Emits less carbon dioxide. having green laundry products. Rusty
• Easily recycled since the 90s
Bioplastics
Opportunities Threats
• New green perception from customers • Gets contaminated when petro plastic mix
• Will becoming a major well known in
pioneer for using biodegradables • Has potential to effect food supply
31. Can a Packaging shift appease the economic
segment of the Triple bottom line?
THE ECONOMICS OF BIOPLASTICS
32. Current Realities
• 3.49 million barrels of oil a day are
converted into plastics.
• 99% of plastics come petroleum. Ethylene,
propylene and Styrene are extracted
directly from crude oil.
• Current rigid plastic containers such as the
Lenor 4 li. and 1 li. Concentrate will take
millions of years to biodegrade.
33. Economic Uncertainty
• Yet the environmental and social benefits are
meaningless if bio plastics are economically
unfeasible.
• PLV is 20% more expensive than current
petroleum based plastics.
34. • How will bioplastics impact dependence on
and consumption of fossil fuels?
• How will a switch to bio plastics negatively
effect primary commodity markets?
35. • In 2009 the United States Generated 30
million tons of plastic waste.
• 11 million tons was durable plastic such as
that used in the packaging for Lenor’s 4li
and 1li. Fabric Softener.
• Only 7% of all plastic waste was recovered
for recycling.
“P&G announces several majororganization changes with thecreation of category managementand a product supplysystem which integratespurchasing, manufacturing,engineering and distribution” P&G History
Before we explain the solution let’s first discuss plastic and why using it for packaging is harmful (Need to go more in depth)
Will find article for 2011Second bullet point -- not for heat, energy, and transportation used in making and selling – also, 4% is a lot in regards to the total used
Based on 2006 statistics
Starch based bioplastics are usually made from
Last bullet--Blends of starch and other plastics are