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Procter & Gamble Co. is bet-
ting consumers are ready to PaY
a higher price to do their laun-
dry...if the chore is made easier.
This week, the consumer-
products giant is rolling out Tide
Pods-small, dissolvable packets
of detergent that will be the
company's higtrest-price laundry
detergent, costing about 25%
more per load than liquid. The
move comes after P&G worked
during the years after the reces-
sion to shore up tJre lower end of
its detergent lines to defend its
market share, as budget-con-
scious consumers switched to
cheaper rivals.
P&G's competitors are making
the same bet with similar Prod-
ucts, including Arm & Hammer
Power Pak from Church &
Dwight Co. and Purex lJltraPacks
from Dial Corp. The aim is to
move consumers up to a higher-
value product in the same way
the companies got U.S. consum-
ers to switch from Iaundry pow-
der to liquid detergent in the
1980s. Even in tough times, con-
venience can be a huge selling
point: Witnessthe populariff of
single-serve coffee pods, for
which the coffee is considerably
more expensive, even before fac-
toring in the cost of buying a
brewing machine.
That said, fetching higher
prices for something as basic as
laundry soap could be a hard
sell, especially with gasoline
prices rising. Last year, P&G
tried to raise prices for its Cas-
cade dishwasher detergents-in-
cluding the tablet form-but was
forced to retreat when some ri-
vals like Reckitt Benckiser
GroupPLC didn't follow along.
The trick will be selling the
benefits of Tide Pods.
"Instead of measuring out the
cup, filling the cup in there, you
just toss it in," says l(ris Burdis,
grocery business manager for
United Supermarkets. The re-
gional chain, in Lubbock, Texas,
is rearranging. its aisles this
week to make room for the new
pods category.
"I believe our guests will re-
spond to this, but a lot of it will
be up to the manufacturers on
Detergent
ing can changeat any time and
variesby location
Alex Keith, P&G'svice presi-
Measurefor Measure dent of its North Americanfabric -
pricesperlaundryload
Estimated carebusiness,saysthe companY,
for threetypesofTide. expectsto sell $300 million of
Tide Podsin the first year and
expectspodsas a categoryto ac-
H;5s&
countfor about30%ofthe laun-
dry-detergentmarketin the next ,
l0 years.
The companyhasaccelerated
its role on both endsof the con-
sumerspectrumsinceChiefEx-
ecutive Robert McDonaldtook
over in August 2009. To show
the companycontinuesto aim at
the high end of the market,Mr.
McDonaldpointedto launchesof
Crest 3-D Whitestrips, DownY
Unstopables in-wash scent
boostersand GilletteFusionPro-
ITDEPODS Glide styler razors, during an
r$l5'ggi*ffi^, eventlast weekin Cincinnati.
The importanceof Tide'for
P&Gis hard to overstate."The
soapsectorwas calledthe 'Ma-
retail prices;pricesmayvary
Note:Suggested
rine Corps'oJthecompany," says
SourceandPhotos:Procter& Gamble TheWall StreetJournal Bill Schultz,an assistantbrand
managerwhen liquid Tide was
launchedin f984 and now presi-
how well they advertise and children's activities. Based on dent and chief executiveof Coca-
communicate the benefits." Sun Products' research,these ColaBottlersPhilippinesInc. "Al-
The suggested retail price for moms view laundry as a chore most all the top people spent
35 Tide Pods is $9.99. P&G'sdata and would rather spend more their time in soap: It was the
show the new product will cost time with their familiesinstead biggest, most competitive,
consumers anywhere from 25-32 of doing things like measuring toughestcategory."
cents per load up from about 22 out detergent. In the secondquarter,fabric
cents per load for Tide Original ' "Consumers'livesare getting and home-care accountedfor
Liquid. Many consumers pour a little more busy," Mr. LYons $6.6billion out of P&G'soverall
more than the recommended says."They're redly focusingon $?z.Lbillion in sales.
amount of liquid detergent when spendingtime with their fami- Mr. McDonald,himselfa Tide
dorng their laundry, manufactur- lies, and there's a value equa- brand manager from 1984 to
ers and analysts say, so they are tion." 1986,calls Tide Pods the first
actually paylng more than per- evolutionin laundry detergentin
load figures suggest. the last three decadessinceTide
The average American house- liquid was rolled out.
hold washes nearly 400loads of Podsare expectedto Tide tried to roll out "Tide
laundry per year, the U.S. Envi- accountfor about30o/o Tabs"-a single-dose,powder
ronmental Protection Agency tablet-about a decadeago and
says, creatng a$7.2 billion mar- of the laundry failed because consumers
ket last year, according to San- detergentmarket in claimed it didn't dissolvewell
ford C. Bernstein's analysis of and they wantedto havecontrol
Euromonitor data. the next l0 years. over their dose, says a former
Srur Products Corp, maker of P&Gemployeewho worked on
All laundry detergent, is rolling Tide at the time. 'It wasn't even
out a similar product-All close to hitting the goals," he
Mighty Pacs-and also charging For buyersof All laundry de- says.
a premium. Michael Lyons, se- tergent at Wal-Mart,a suggested Tide spent eight yearsdevel-.
nior brand manager for All, says price of $4.91garners40loads oping the new Tide Pods and'
the company's target consumer of powderdetergent,32 loadsof tested them with more than
is a mom with children under the liquid detergent and just 24 6,000consumers.
'1thfuik consumersare willing
age of 12, whose life is getting loads of. Mighty Pacs.A Wal-
increasingly complicated by her Mart spokeswoman saidits Pric- t0 pay,"Mr. McDonaldsays.