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Procter & Gamble and Colgate-Palmolive leaders said consumers are buying more high-end household staples,while sales of bargain brands cool. Both companies plan to navigate this surroundings by leaning into product innovations-upgrades that tend to accompany price increases.
Some companies are struggling to sell basic household goods-but consumers are snatching up high-end toothpaste and hair-care products.Procter & gamble (PG) is rolling out “innovations,” or upgrades, across its entire portfolio-from budget brands to high-end alternatives, and increasing prices as the company navigates tariffs and rising costs, CFO Andre Schulten said on a conference call last month. So far, the strategy is working-at least for the higher-end market, according to the maker of Pampers diapers, Tide detergent and Charmin toilet paper.
“In some channels,we see the majority of growth in our categories in the premium end,not in the value end of the lineup,” Schulten said,according to a transcript made available from AlphaSense.
Colgate-Palmolive (CL) CEO Noel Wallace gave a similar assessment of the domestic market for household staples on a conference call last week. The company behind Colgate toothpaste, Speed Stick deodorant and Ajax cleaners is also adopting an innovation-heavy strategy.
“We still see the premium and the super-premium [segments] growing very, very nicely,” in the industry, Wallace said, according to a transcript. “It’s the value-oriented brands, or skus, that are seeing some pressure.”