Posted by Barry Silverstein on September 7, 2010 12:30 PM
Procter & Gamble, arguably the world's most adept branding organization, is simply not content with the status quo.
As we've reported, P&G has lofty ambitions to grow its business internationally, beyond its traditionally strong roots in the U.S.and Europe. In fact, P&G is eying developing countries such as Brazil and China for future sales revenue.
Add brand acquisitions to P&G's wish list. "I'd love to buy more global brands," P&G CEO Bob McDonald tells Bloomberg. "The climate for acquisitions is good, the climate for mergers is good," McDonald said.
One reason for McDonald's interest in global brands is it can be an easy route to extend its current business. For example, P&G bought Ambi Pur, an air freshener brand, from Sara Lee Corp. this year. As a result, P&G was able to expand its Febreze line of air freshener products, growing its penetration from 15 to 85 countries.
While most of P&G's brands are home-grown, it has made some significant brand acquisitions to fuel its growth. The most stunning in recent years was the company's purchase of Gillette for $57 billion in 2005. The acquisition brought P&G such well-known brands as Braun, Duracell and Oral-B, as well as Gillette's signature razor line.
It's unlikely P&G will make another acquisition of that size in the near future, but with over $16 billion in cash generated last year, the company has a lot of flexibility. Still, P&G has been hurt by a recession in which consumers who had been loyal to such brands as Tide, Crest, and Olay were forced to consider less expensive generic products to save money.
P&G hopes the combination of global expansion (the company now generates 60% of its revenue from outside the US) and acquiring brands that have international appeal will keep their branding machine churning out worldwide sales.