CINCINNATI - New Procter & Gamble Co. chief Bob McDonald sees a brighter future for the 172-year-old company through selling more diapers, detergent and shampoo in places like India and Africa.
With ambitious plans to double sales and streamline the world's largest consumer products company, whose sales and earnings growth have slowed during the recession, McDonald is to move from chief operating officer to CEO in three weeks.
"We're going to focus even more on winning with consumers in emerging markets," McDonald said in a conference call yesterday, shortly after P&G announced he will succeed A.G. Lafley on July 1. "We're serving about 3.5 billion people of nearly 7 billion people on the planet today, and I'm confident we can reach at least another billion or more in the decade ahead."
Lafley will stay on as a full-time chairman and adviser to McDonald after nine years as CEO of the maker of Tide detergent, Crest toothpaste and Olay skin cream. Lafley turns 62 on Saturday, while McDonald will be 56 later this month.
The move had been expected on Wall Street. P&G shares closed down 33 cents to $52.08. They've traded in a 52-week range of $43.93 to $73.57.
P&G's board praised McDonald in a statement as "the most broadly and globally experienced CEO in P&G history." McDonald has lived and worked in Europe, Canada and Asia. He went to the Philippines in 1991 as general manager and later led P&G's Asian operations from Japan.
P&G's strongest sales growth in the last few years has been in emerging markets, and McDonald, who just returned from a trip to Russia and southeast Asia, plans to step that up. He thinks P&G can more than double its annual sales, to $175 billion a year, over the next 15 years mainly in countries with booming populations and still-developing economies.
Ali Dibadj, a senior analyst for Sanford C. Bernstein, said there is some question about whether consumers in such countries will keep trading up to big-brand products, but the potential for growth is clear.
McDonald said raising P&G's per-capita sales in India and China, which have more than 1 billion residents each, to their level in Mexico would add $40 billion a year.
"There's no question that the basic demographics are going to take the center of gravity of our business to Asia, to Africa - where the people are, where the babies are being born," McDonald said in an interview last year.
One of the success stories of his decade in Asia was a new Pantene shampoo formulation and marketing approach meant for regional hair types and styles. Strong Asian sales growth has since helped build Pantene into the leading global hair brand, with $3 billion in annual sales.