Gillette Acquisition Gives P&G New Leadership in Male Grooming Market
Feb 8, 2005
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The U.S. $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," Ms. 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 percent of its overall personal care and beauty business in the U.S. With the acquisition of Gillette, Ms. Bonner estimates that P&G's male grooming sales could rise to $1.25 billion in the U.S. alone, accounting for 25 percent of its total domestic cosmetic and toiletry business.
Under the terms of the agreement, P&G will acquire 100 percent 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.
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