It's probably fruitless to try to keep track of how many brands Procter & Gamble Co. sells. Chairman John G. Smale said in a recent interview that he thought there were 83 or 84 P&G brands; company literature shows well over 100, and there are always a few new things in test markets around the country. And that doesn't even begin to take into account the permutations caused by the many sizes and flavors many P&G products come in.
The company is constantly tinkering with its products and product mix, looking for new successes, attempting to revive faltering brands or breathing new life into old favorites.
Here are four Procter & Gamble products that are in various stages of the development and marketing life cycle:
Like so many other significant discoveries, Olestra came about by accident.
A Procter & Gamble researcher, exploring how the body absorbs fat, was trying to come up with a product with increased fat content to nourish premature infants. Instead, he found something that did quite the opposite.
Olestra is a sucrose polyster that can mimic virtually any edible fat, with one big difference -- it passes straight through the body's digestive system, leaving behind no calories or cholesterol -- indeed, it is believed, it takes some of the body's cholesterol with it.
In short, a dieter's dream.
"From a product development point of view, I'm not amazed by many things, but I am amazed by this stuff," said Robert A. Greene, associate director of Procter & Gamble's food product development division, which is putting the finishing touches on Olestra.
Imagine low-calorie pies and cakes that taste like the real thing. Mayonnaise with a fraction of its current calorie content. Diet french fries and milkshakes at McDonald's. The mind boggles.
"If you could imagine that you could use a product that was a fat -- whether it's a salad dressing or a cooking oil or something that you bake cookies with or fry french fries in or fry potato chips in, and it has significantly fewer calories," Smale said, "then that's got to be conceptually a pretty attractive idea."
Indeed. Wall Street analysts have begun pushing their long-term outlooks for P&G stock higher in anticipation of Olestra, even though it may be two years or more away from market. P&G submitted Olestra to the Food and Drug Administration for approval in May, and though company officials decline to estimate how long the process might take, analysts guess it will be at least a year, perhaps two, possibly more.
Procter & Gamble can afford to wait. If approved, Olestra is expected to be the kind of once-in-a-lifetime product that consumer-product companies dream of, with potential annual sales in the billions. For P&G, which has faltered on some major new product introductions in recent years, a big win from Olestra would be just fine.
Olestra demonstrates the strength of P&G's product-development labs, which some analysts believe are somewhat underrated. Virtually every other major food company has been chasing a formula similar to Olestra's, but Procter & Gamble seems to have taken a big lead.
Conceptually, Olestra actually is a fairly simple recipe -- several fatty acids attached to a sucrose molecule. By varying the composition, P&G scientists have been able to replicate many kinds of fats, right down to the elusive quality known as "mouth feel" -- the way humans perceive food as they eat it. "We believe that Olestra can have the same taste and mouth feel as the fats in your diet," Greene said. "It looks like fat, it behaves like fat, it has the greasy aspects of fat... . Your visual reaction to a food made with Olestra is, 'This is a fatty food -- yummy, tastes good.' "
Few people outside P&G have tasted Olestra. The company has been doing tightly controlled clinical tests on it for several years, which will broaden as the FDA tests begin. Because of the large number of potential uses for Olestra, the tests have covered a wide variety of situations. "There are a remarkable number of circumstances you've got to deal with," said Geoffrey Place, the company's vice president for research and development. "You're dealing with old people, you're dealing with young people, etcetera, etcetera. You're dealing with people who are sick, you're dealing with people who are normal. You're dealing with all sorts of situations, from high-temperature cooking to not cooked."
So far, P&G claims, it has found no side effects, aside from a diarrhea problem caused when early versions of the formula went through the body a bit too quickly. That has since been corrected. "At this point, we don't know of any real downsides," Greene said.
Still, some outside observers are wary. They worry whether even a minute amount of the material is absorbed by the body (P&G says it has found no evidence to indicate that there is any absorption), and what the long-term effects of eating Olestra may be (P&G says there aren't any). Still fresh in everyone's mind is the experience of the last major low-calorie product, aspartame, which was approved after a protracted FDA review and still is the subject of controversy about possible side effects.
Procter & Gamble is acknowledging the skepticism, and hedging its bets accordingly, in its plans for the introduction of Olestra. The company's petition for FDA approval asks that the okay be given only for somewhat limited usage of the product -- as a 35 percent replacement for the fat in shortening and oil made by the company, and as a 75 percent replacement for commercial frying oils used by restaurants and in snack foods like nuts and potato chips. If the product proves healthful and successful, P&G is then expected to ask permission to broaden its use. The product is expected to be priced, on average, slightly higher than equivalent natural fats.
Even at the initial levels, the potential market is huge -- and for now, the only products in which it will be available are likely to be those made by P&G. No wonder that Hercules Segalas, a financial analyst at Drexel Burnham Lambert Inc. predicts that Olestra "is going to be the biggest thing in P&G's history."
But Procter & Gamble officials believe that the benefits of Olestra will extend far beyond the bottom line. They believe that it potentially could have a marked effect on the nation's health, by reducing those two all-American problems, calorie intake and cholesterol levels.
"I think this represents ... a pretty significant invention from the standpoint of the health of the country," Smale said. "It isn't inconceivable that the basic technology involved here, over the years ahead, as everybody gets confidence about it, can make a structural difference in the health of the American people. That's kind of high-blown, but it's very possible. ...
"It's an exciting concept, an exciting idea," he said. "We think it's real. We've done an enormous amount of work with it. We're convinced of its safety, and we're sure convinced of its performance."
Citrus Hill orange juice has been one of Procter & Gamble's more disappointing new products of the past few years. Introduced in 1982 as a premium-priced, better-tasting juice, it has run into stiff competition from industry giants Minute Maid and Tropicana, which dealt with the interloper by juicing up their taste.
Now Procter & Gamble is trying a new tack with Citrus Hill. It is marketing a reformulated version containing extra calcium, reckoning that Americans, more aware these days of the need for calcium in their diets, will choose to get it from their morning glass of O.J.
Procter & Gamble hopes the calcium gimmick will attract new customers, enabling it to push Citrus Hill's share of the orange juice market past 10 percent, by giving the product a distinctive feature to make it stand out from other orange juices. "We feel if we don't have something special to set us apart, we're going to be viewed as just another version of that commodity," said Thomas W. Gougeon, a section head at P&G's food and beverage technology division.
P&G officials say Citrus Hill Plus Calcium is an important example of the company's effort to appeal to consumers by making products more healthful. "It became clear that there was an opportunity to take some of the learning that was going on in our nutritional programs, which actually were then at that time primarily targeted at health care, and take that learning and reapply it on the calcium orange juice situation," Place said. "That highlights actually what it is possible to do in a company like P&G, where you have in-depth expertise in more than one area."
Much of Procter & Gamble's experience with calcium comes from research the company did into potential new drug products to treat bone disease. In doing so, company scientists came up with a form of calcium that is much better absorbed into the body than even the calcium contained in milk, which is the "gold standard of calcium absorption," as Gougeon puts it. The company also is seeking FDA approval to market Citrus Hill as an aid in the absorption of iron.
To give Citrus Hill Plus Calcium some extra cachet, P&G resorted to a strategy it has used in the past with Crest toothpaste and Pampers diapers: gaining endorsement of the product from a medical group, in this case the American Medical Women's Association, which represents the nation's 85,000 female physicians. Calcium deficiency is a particular problem among older women.
Touting the health benefits -- whether natural or added -- of its food and beverage products is becoming more common at P&G. It also is billing a reformulated Puritan Oil as containing less saturated fat than competing oils. "We see this as a way that we can take ourselves out of the commodity business, just the salad oil business, and tell people we're more than just a salad oil," Gougeon said.
"These are a couple of the examples of the thrust we're trying to make into value-added attributes for food," Gougeon said of Citrus Hill and Puritan. But the idea is by no means unique to P&G. Minute Maid orange juice already is fighting back by touting its own calcium content, and Gougeon conceded, "You may be setting a new standard, but it's difficult to stay in front for any period of time."
Procter & Gamble didn't invent Pepto-Bismol -- that was done back around the turn of the century by someone whose name has been lost to time. P&G didn't even own the product until about five years ago, when it picked it up as part of an acquisition of Norwich Eaton Pharmaceuticals Inc.
But Pepto-Bismol is one of the hottest products at P&G these days. The reason: company researchers have discovered it can do a whole lot more than calm upset stomachs. Like preventing travelers' diarrhea. Killing bacteria that cause other stomach disorders. And, perhaps, preventing ulcers.
"I admire whoever it was who put that formulation together 80 years or so ago, because he was a great formulator," said J. Paul Jones, director of product development for P&G's health and personal care division, which includes Pepto-Bismol. "It's an amazing brand."
Acquiring a product and repositioning it by use of scientific or marketing research is a time-honored practice at P&G. Many of its best-known products -- including Duncan Hines cake mixes and Folgers coffee -- came about through acquisition and repositioning. In addition to researching the way Pepto-Bismol works, P&G also is investigating its recently acquired Metamucil brand, which the company believes could be marketed as a way to reduce blood cholesterol levels in addition to its merits as a laxative.
P&G's scientists began researching Pepto-Bismol's properties after the company acquired the product and found that little was known about how it worked. Television commercials that for years showed Pepto-Bismol coating cartoon stomachs and lab beakers with a pink haze illustrated most of the scientific knowledge about the product. "It was obvious it worked and did a lot of good things, but nobody knew why," Jones said. And Smale said Pepto-Bismol "was considered a kind of snake oil, I guess. It worked, but people didn't know how it worked, or why it was working."
What the P&G researchers found out was that Pepto-Bismol not only coated stomach linings, as advertised, but that the bismuth compound on which it is based also killed bacteria in the stomach. That has a number of benefits. For instance, P&G claims that Pepto-Bismol, taken four times a day, can help prevent travelers' diarrhea by killing the bacteria that causes that dreaded malady.
P&G says the success rate of Pepto-Bismol in preventing travelers' diarrhea is about 70 percent. "That's a pretty substantial benefit," Jones said. "Even people who do get a case tend to get a milder case."
Smale said that on a recent trip with a group of business executives to Hanoi, he urged several friends to take Pepto-Bismol to ward off diarrhea. "Most of the people came down with a problem after we got out of there, but those of us who were using Pepto-Bismol did not," he said.
The company has asked the Food and Drug Administration for permission to advertise Pepto-Bismol as a medicine that prevents travelers' diarrhea. And it is looking at other potential uses for the product. It might be used, again prophylactically, to prevent infant diarrhea, a leading cause of infant death in Third World countries. It helps reduce the incidence of gastritis. And it appears to stop ulcers from forming by killing the bacteria that can cause them. The company will likely ask the FDA for permission to market Pepto-Bismol for all these uses -- thus vastly expanding its potential market.
But competition is likely to be fierce. Pepto-Bismol will have to go up against many other successful anti-ulcer medicines and other potions that help prevent gastric disorder. And it has an even more fundamental problem -- because it has been around so long, the patents on Pepto-Bismol have long since expired, making it easy for competitors to make imitation brews.
Nevertheless, P&G officials believe they can maintain an edge. With Pepto-Bismol's age comes another asset -- "brand heritage," the consumer's familiarity and comfort with a longstanding product. Said Jones: "The brand heritage will be the proprietary position."
It's one of the most famous catch phrases in the history of American advertising: "Look, mom -- no cavities!" And it turns out it was no hype.
The fluoridation of American teeth that Crest toothpaste helped spearhead has remarkably reduced the incidence of cavities among American children. When Crest was introduced in 1955, a kid without cavities was practically a freak of nature. Today, however, thanks to fluoridated toothpaste and drinking water, about 40 percent of American teen-agers are cavity-free. And the average number of fillings in young American mouths has fallen to five from 20.
For Crest's maker, Procter & Gamble, that success poses a bit of a challenge: What do you do if the problem your product was designed to solve is on the wane? Simple -- look for another problem.
P&G has kept Crest in the No. 1 position in the gigantic American toothpaste market for the past three decades by constantly modifying the product, its packaging and its marketing to meet new challenges. So Crest -- which still has fluoride -- now also is marketed to control tartar build-up on teeth. It's available in several flavors and sizes, and in a pump dispenser.
"The R&D team on Crest has had the ongoing challenge of identifying changing consumer needs in the dental area and identifying technology -- in this case dentifrice technology -- which will help them meet those needs better than the competitive products," Place said.
"We have to look at what are the new desires of people ... and try to do that sooner and better than our competition does," Jones said.
Crest is a classic case of what marketers call a "mature" product -- one well-established in the marketplace with little chance for the dramatic growth enjoyed by dynamic new products, but with potential for steady sales increases if marketed correctly. So even the slightest "new and improved" feature can be significant.
"Our goal is that these brands all have an extended lifetime," Jones said. "We're not in them for a quick payout this year."
To do that, P&G brings into play its considerable market-research abilities, yoked to its product-development labs. Constantly assessing consumer desires, the company then tries to apply technology to meet those needs and give a product a competitive edge.
Sometimes, P&G misses the boat -- for instance, when rival Colgate-Palmolive beat the company to market by many months two years ago with toothpaste in a pump form. Crest lost several crucial market-share points scrambling to catch up -- and then won them back once it did. On the other hand, Crest beat Colgate to market with tartar-control toothpaste by well over a year.
One of P&G's key methods for gathering market data is the toll-free "800" number it prints on every product. This serves both as a 24-hour customer complaint and information hotline and as a research tool for the company.
Through the 800 number on Crest's pump toothpaste, brand managers recently found out that customers complained frequently that the pump nozzle dripped and that users couldn't figure out how much toothpaste was left in the dispenser -- problems that didn't show up in the original market research on the product. A redesigned package fixing the two problems now is on store shelves.
"I think the 800 line has been a real advantage for us," Jones said. "It's one that keeps us close to consumers." P&G's 800 number gambit, which it began several years ago, now is being copied by many other consumer-product companies.
With cavities under control and the war against tartar under way, P&G researchers -- and their counterparts at rival companies -- are working on the next frontier in toothpaste technology, curing a problem that has become more important now that teeth last longer: gum disease.
P&G recently introduced a prescription-only mouthwash that reduces gum disease, but the challenge is to get similar properties into toothpaste -- a task made more difficult by the fact that most anti-gum-disease compounds taste terrible. But Jones is predicting success within five years. And then it will be on to the next problem. "Longer term, we want to provide people with something that, if you're in reasonably good health, we'll try to keep you that way," he said.