Proctor and Gamble 2004 Annual Report Download - page 27

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Fiscal฀Year฀2004฀Results
Snacks฀and฀Beverages฀delivered฀strong฀profit฀growth฀in฀฀
a฀difficult฀competitive฀environment.฀Volume฀increased฀฀
4%,฀sales฀grew฀8%฀and฀net฀earnings฀increased฀19%฀versus฀
the฀prior฀year.฀
New฀products฀like฀Pringles฀Dippers,฀Pringles฀Prints฀and฀฀
the฀Folgers฀AromaSeal฀package฀upgrade฀have฀kept฀P&G฀฀
in฀the฀innovation฀lead.฀These฀initiatives฀also฀helped฀Snacks฀
and฀Beverages฀post฀mid-single-digit฀unit฀volume฀growth฀฀
for฀fiscal฀year฀2004.฀
Folgers฀faced฀both฀rising฀coffee฀bean฀prices฀and฀heavy฀
competitive฀promotional฀spending฀for฀much฀of฀the฀฀
fiscal฀year.฀Despite฀these฀challenges,฀Folgers฀increased฀฀
its฀leadership฀market฀share฀in฀the฀U.S.฀to฀32%.฀
Pringles฀posted฀high-single-digit฀global฀volume฀growth฀฀
for฀the฀year,฀led฀by฀North฀America฀and฀Western฀Europe,฀
which฀both฀grew฀double-digits.฀
What’s฀Working
P&G’s฀Snacks฀and฀Beverages฀business฀is฀focused฀on฀
continuing฀to฀strengthen฀the฀consumer฀appeal฀of฀its฀฀
billion-dollar฀brands฀–฀Folgers฀and฀Pringles.฀This฀starts฀฀
with฀leadership฀innovation.฀For฀Pringles,฀it฀is฀products฀฀
like฀Prints,฀Dippers฀and฀customer-specific฀customization฀
initiatives.฀For฀Folgers,฀it฀is฀products฀like฀the฀AromaSeal฀
canister฀initiative฀and฀the฀Home฀Café฀system.฀These฀
breakthroughs฀are฀being฀delivered฀on฀top฀of฀an฀ongoing฀
stream฀of฀new฀flavors฀that฀continue฀to฀attract฀new฀
consumers฀to฀these฀leading฀brands.
In฀addition฀to฀delivering฀leadership฀innovation,฀Pringles฀฀
and฀Folgers฀are฀relentless฀at฀driving฀out฀non-value-added฀
costs฀and฀improving฀capacity฀utilization.฀This฀strict฀cost฀฀
focus฀is฀critical฀to฀maintaining฀superior฀consumer฀value.฀
Profit฀margins฀for฀the฀segment฀have฀improved฀from฀7%฀฀
in฀fiscal฀2001฀to฀over฀10%฀for฀fiscal฀2004.฀
Much฀of฀the฀margin฀improvement฀has฀come฀from฀detailed฀
cost-reduction฀programs฀and฀asset-utilization฀improvements฀
on฀Pringles.฀Pringles฀and฀Folgers฀have฀very฀scale-driven฀฀
cost฀structures,฀and฀we฀are฀leveraging฀the฀scale฀of฀these฀
billion-dollar฀brands฀better฀than฀we฀have฀for฀many฀years.฀
Enhancing฀the฀consumer฀appeal฀of฀the฀brands฀and฀
maintaining฀excellent฀consumer฀value฀is฀our฀simple฀฀
recipe฀to฀keep฀Folgers฀and฀Pringles฀delighting฀consumers฀
and฀delivering฀strong฀shareholder฀returns฀for฀many฀฀
years฀to฀come.฀
Snacks฀and฀Beverages
Folgers฀Home฀Café
Folgers฀Home฀Café฀is฀a฀joint฀effort฀
with฀leading฀coffee฀appliance฀
manufacturers฀to฀bring฀affordable,฀
convenient฀and฀personalized฀
custom-brewing฀into฀the฀home.
Pringles฀Dippers
Pringles฀Dippers฀combines฀the฀
irresistible฀taste฀of฀Pringles฀and฀a฀
stronger฀chip฀for฀dipping.฀Dippers฀
began฀shipping฀in฀Western฀Europe฀
in฀February฀2004,฀and฀are฀off฀to฀฀
a฀very฀strong฀start.
Folgers฀AromaSeal
Folgers฀AromaSeal฀package฀
innovation฀gives฀consumers฀fresh฀
aroma฀and฀taste฀in฀every฀cup฀in฀฀
an฀easier-to-carry฀package.฀This฀
innovation฀helped฀Folgers฀reach฀an฀
all-time฀high฀market฀share.
Pringles฀Prints
Pringles฀Prints,฀our฀newest฀
technology-driven฀innovation฀in฀
snacks,฀allows฀us฀to฀print฀right฀฀
on฀the฀chip.฀One฀example,฀฀
Pringles฀Prints฀with฀Trivial฀Pursuit฀
Junior™฀questions,฀began฀shipping฀
in฀June฀2004.
Net฀Sales
(in฀billions฀of฀dollars)
  
 
Net฀Earnings
(in฀millions฀of฀dollars)
  



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