Detergent Pods Are Shrinking Soap Sales
Some detergent makers are upset by the falling profits brought on by pre-measured laundry pods.
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For decades, detergent makers have enjoyed bloated demand thanks to consumers dosing their loads of laundry with excessive amounts of soap.
In the past few years, however, producers began selling pre-measured “pods” or capsules of detergent. Consumers love them, and perhaps not surprisingly, the success of these products has led to a marked decline in laundry soap sales. According to The Wall Street Journal, sales in dollar terms are down 5.1 percent from just three years ago.
Industry stalwarts are crying foul, even attacking the very nature of innovation. The Journal quotes James Craigie, CEO of Church & Dwight Co. (makers of the Arm & Hammer, OxiClean, and Xtra brands, among others), complaining about this trend at a recent industry conference. Instead of embracing these detergent pods as the superior consumer products that they are, Craigie, whose company also makes pod-style detergent products, went full-on RIAA and blamed the very notion of innovation—albeit with a curious definition.
“New products ought to expand the revenue pie for manufacturers and retailers, not shrink it," he said. "That is what innovation always did in the past.
“What kind of a new product is good when it's hurting the total category?" Craigie added.
Boo hoo. Would you like some cheese with that whine, Mr. Craigie? Listen closely: You’re doing it wrong. Innovation is not some industry-defined growth strategy in the service of shareholders—it’s a consumer-driven imperative in the service of making better products.
For what it's worth, P&G (makers of Tide Pods) controls about 75 percent of the pod-detergent market, and expects sales of their unit-dose products to rise to $500 million this fiscal year, the WSJ reports.
The whole debate reeks of the hubris surrounding the recording industry’s spiteful attempts to stem the tide of MP3 downloading in the early 2000s. Record companies enjoyed decades of a consistent, familiar business strategy that was largely devoid of major innovation—that is, until file-sharing forced it upon them. Instead of embracing the future, which has and always will be consumer-driven, they targeted the consumers, fined them, penalized them, and preempted a host of new-market opportunities that iTunes, Pandora, and Spotify would later scoop up.
Consumers—not shareholders—want better, more innovative products, and good brands will supply them. That’s how it’s always been. Even I know that, and I was an English major.
Via: WSJ