Gillette Acquisition Gives P&G New Leadership in Male Grooming Market

Gillette Acquisition Gives P&G New Leadership in Male Grooming
Market 


LITTLE FALLS, N.J., Feb. 4  /PRNewswire/ -- The $57 billion deal announced
recently by The Procter & Gamble Company to buy The Gillette Company -- P&G's
largest acquisition ever -- will help to make P&G the front-runner in the
nearly $5.5 billion U.S. men's grooming market, according to international
business consulting firm Kline & Company.

"The acquisition of Gillette brings to P&G the missing piece of the puzzle that
enables the company to be the product leader to all members of a household,
from babies to women to pets, and now men," says Carrie Bonner, industry
manager for Kline's Consumer Products Practice.

P&G had been steadily growing its women's beauty business with its Olay and
Cover Girl brands and expanded its hair care business with the acquisitions of
Clairol and Wella. Its presence in the men's market, however, consisted mainly
of Old Spice, with most sales derived from deodorants and antiperspirants. The
addition of Gillette -- clearly the men's market leader with an estimated $900
million in U.S. sales of male grooming products, according to Kline's THE U.S.
MALE GROOMING MARKET 2003 -- catapults P&G to the top of this market.

"The men's grooming category was perhaps P&G's weakest portfolio in the
personal care industry," Bonner says. "Although the company has strengthened
its Old Spice brand, it has not been enough to build a substantial franchise."

According to Kline's estimates, U.S. sales of Procter & Gamble's products
specifically targeted to men totaled less than $250 million in 2003, which
represents less than 5% of its overall personal care and beauty business in the
U.S. With the acquisition of Gillette, Bonner estimates that P&G's male
grooming sales could rise to $1.25 billion in the U.S. alone, accounting for
25% of its total domestic cosmetic and toiletry business.

Under the terms of the agreement, P&G will acquire 100% of Gillette, founded in
1901 and a marketer of a number of category-leading products such as Gillette
razors and blades, including the Mach3 and Venus brands; Oral-B manual and
power toothbrushes; and Braun shavers and small appliances.

"All these brands are leaders in their respective markets, which is something
P&G strives for with its own brands. Moreover, the company will have even more
leverage with retailers, which is something P&G's competitors should be very
concerned about," says Bonner.

The Gillette purchase follows strong growth in corporate sales for P&G, which
has used acquisition activity to expand substantially in the last 20 years. In
fiscal 1985, P&G's total corporate sales were $14 billion, and they currently
exceed $51 billion, due mainly to acquisitions of well-known brands such as
Cover Girl, Clairol, and Wella, which introduced P&G to the color cosmetics,
hair colorant, and salon markets, respectively.

Kline's study, THE U.S. MALE GROOMING MARKET 2003, examines emerging
opportunities in the men's grooming products market, offering a detailed and
accurate analysis of market size and segmentation. It explores historical sales
and overall growth, focusing on the catalysts for the recent emergence of this
product sector. It examines manufacturers' sales by retail channel with a
five-year forecast, covering key brands and marketers, as well as noteworthy
trends and developments.

It also features a section on male attitudes and usage of grooming products,
based on a survey designed to explore purchasing patterns, brand loyalty, and
retail channel preferences. Kline interviewed more than 400 consumers to
examine purchase decision factors, usage habits and frequency, and reasons for
switching brands. For more information, go to
http://www.klinegroup.com/y576.htm, or contact Carrie Bonner at [phone]
or .

Those based in Europe should contact Jonathan Duff at [phone] or .

Established in 1959, Kline & Company (http://www.klinegroup.com/) is a business
consulting and market research firm serving clients worldwide in the cosmetics
and toiletries, household cleaning products, and other consumer products
sectors. 

DATASOURCE: Kline & Company, Inc.



CONTACT:   Carrie Bonner, Industry Manager, Consumer Products of Kline &

Company, Inc., [phone], or  



Web site:  http://www.klinegroup.com/

http://www.klinegroup.com/y576.htm 

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