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P&G A.G. Lafley is Confident that innovation is Key

By Amarendra Bhushan for CEOWORLD Magazine Updated:October 15, 2008 Become a writer!

Continuing to innovate and staying closely connected to our consumers are key components in P&G’s strategy to continue growing in the face of toughening economic times, A.G. Lafely told two U.S. TV Networks during live on-air interviews this morning.

The chief executive of the Procter & Gamble Co. reassured shareholders Tuesday that the company is well-positioned to weather the nation’s economic storm. A.G. Lafley, chairman and chief executive officer of the consumer products maker, cited P&G’s record of years of steady earnings and sales growth and said that even with the current market turmoil, they can count on P&G for the long haul because of its strong fundamentals.

“While the economic environment remains volatile and uncertain, I am confident that P&G can and will continue to prosper over the long term,” Lafley said, adding: “P&G should continue to grow reliably over the long term.” He said P&G has been increasing productivity, controlling costs and adding innovations to a product portfolio that includes 24 brands with annual sales of $1 billion or more and 20 others with sales of $500 million to $1 billion.

Procter & Gamble Co. (PG) Chief Executive A.G. Lafley acknowledged the economic challenges facing large U.S. corporations, but told shareholders at the company’s annual shareholder meeting Tuesday that the consumer-products giant is poised to grow at steady levels long term.

“We are living in one of the most volatile economic periods any one of us has ever seen,” Lafley said. “No one anticipated a year ago we would be facing the economic situation we are facing today.”

Lafley said he couldn’t comment on the company’s quarterly or annual results ahead of its formal earnings report, but said P&G will benefit long term from its offerings of daily household goods.

Lafley said he could not guarantee future performance in this or any environment and noted that the weaker economy makes it more challenging for the company to keep growing. But “P&G should continue to grow reliably in the long term,” he said.

The key message throughout is that P&G is an innovation leader, and will continue to drive innovation that delivers value to consumers — a key strategy for the Company, but also an increasingly critical need for consumers as the global economy shifts towards tougher times. All segments also talked about A.G.’s new book, The Game Changer.

“If we really stay close to the consumer and really understand what they need and want, and if we continue to innovate on brands that they know and trust, then we will deliver better value, and in the end, that’s what consumers want,” A.G. told Fox News.

Asked about shoppers’ inclination to buy “store brands” that may be more economically priced, A.G. said: “In every economic downturn, we’ve seen that consumers try them, but in the end, they are looking for value, not a price point.” P&G brands like Tide, he said, consistently deliver value.

1) Watch two segments from Fox Business News

2) Watch A.G.’s interview on Bloomberg’s Opening Bell