Procter & Gamble brings Olay cream brand to Brazil
Valor Econômico
In a select group of drugstores of the Drogasil chain a project begins to be designed - still discreetly commented on by the company - the launching of the Olay brand in Brazil. Three months ago, manufacturer Procter & Gamble began selling about 50 products of the beauty creams brand to 13 points in the chain of drugstores in Campinas (SP), one of the main testing cities of this sector in Brazil. One of the more traditional brands of beauty products in the world, a direct competitor of Nivea and L'Oreal, Olay has a project to expand the line to other markets across the country. "Right now, I can only say that we are analyzing sales performances and are very pleased. A business plan of the brand depends on these results", said Tarek Farahat, president of Procter & Gamble in Brazil, which avoids comment on the developments in sales.
The initiative is part of a project under development in the company in recent years to become Brazil's third or at the most, the fourth largest group in the world market. Today the country is in the 13rd place. Farahat gives no deadline for this. But he knows that to reach the goal, he must have a more robust portfolio - currently with 32 brands such as Gillette, Ariel, Always and Koleston. In the plan of the Olay brand an aggressive marketing policy has already been defined. Ranked by Procter as one of its main "super brands", it grows because it bets on the volume and, therefore, sells cheap. With annual sales around US$ 2.9 billion worldwide (nearly 4% of global revenues of P & G), Olay sells as much as Pantene, from the advertisement girl Gisele Bundchen, and earns almost the same as the group Wella, a brand also controlled by P & G. The Olay has grown twice the average of the company in the world - around 10% per year since 2001. In Brazil, the products of the line cost R$ 25 (US$ 14) to R$ 79 (US$ 44), values close to the Nivea Visage cream and slightly above the line to skin of the rival L'Oreal. Around here, the plan of Procter is to pass far from a direct competition with Natura and Avon, which compete for the door to door market, and try to gain a piece of the R$ 2.2 billion (US$ 1.12 billion) earned in 2009 with the sale of facial creams and soaps in the national retail.
The volume represents an increase of 10% over the previous year. "The demand does not stop because this is not a sector which depend on the credit and is rarely affected by economic crises, since this is a purchase of low value and aimed at the well-being," explains Miriam Steinbaun, director of TNS Research International.
Aware of this strong local demand, nearly three weeks ago, the world CEO of P & G, Bob McDonald, was in Brazil. He visited pharmacies and participated of meetings of the results of the Group brands. He also carried out, from the company's headquarters in Sao Paulo, a conference with over 140 thousand employees worldwide, to speak about perspectives and performance. The visit reflects the way P & G has prioritized local businesses in recent years. Brazil has become a test country of P & G products in the world. The first Latin American country to receive the launch of Gillette Fusion was Brazil. Moreover, the expansion of the Oral B line brand in 2009 was led by a Brazilian team. "We have a very diverse consumer market, with different consumption patterns, and due to this we are able to create product lines ranging from $ 2 ($ 1) to R $ 8 ($ 4.5), as is the case of toothpaste. And with demand growing at all levels. That we only have here", said Farahat.