Due to climate change, the consumer goods industry will have to undertake some transformations. P&G is one of the largest consumer goods companies in the world. The company has been working for the last years on developing more sustainable solutions. For the purpose of this blog, and because of the complexity of P&G’ supply chains and variety of products, we are going to focus on one category only, and treat it as the discussed company: Liquid detergents.
Considering that liquid detergents are made of approximately 70% of water, it is easy to guess that P&G is already facing challenges with the water supply chain nowadays. The main problem is not only availability, but its price and the regulations related to its usage and disposal.
Its largest plant is in Mexico City. The city has grown so much in the past few years, and the water has become so scare, that the plant often suffers from water outage (so does the population). This situation has rapidly increased prices and strengthen regulations concerning water. Although the finished product distribution is convenient from this location, as Mexico City is its largest market nationwide, costs are significantly higher than in the rest of the country. This situation repeats in other plants of world, and it is not getting better.
Regulations are stricter and stricter every year, so operating costs to treat and dispose unused water (waste) are raising and the company has had to replace equipment several times in the past to achieve better disposal quality and reduce its environmental footprint. Its capital investments in improving sustainability are included in every annual budget and it also helps managers to anticipate future stronger regulations.
Efforts have also been made at a corporate level to reduce the risks of uncertainty that P&G will face with the water supply, by integrating these considerations in the product design phase. P&G has recently introduced to the market its concentrated version of liquid detergent, under the form of a pod. This version reduces the use (in the product) and waste (in the production) of water by almost 50%, while offering the same washing power as a regular full cup of liquid detergent. The pods are more expensive to manufacture, as the process requires more engineering. The challenge has been to convince the consumers that buying a pricier option in a smaller presentation is appealing, and to convey that with half the product that they used before, they will achieve the same level of cleanliness.
This innovation was so operatively smart, that other companies are copying or trying to copy P&G’s model. Still, the challenge remains with winning the consumer.
Another concern with the climate change resides in the use of phosphates in the production of liquid detergents. Phosphates are added to detergents to soften the water and increase efficiency of the liquid, but then finished in the used water, which requires extra cleaning process to get rid of it. While phosphate is an essential element for plant life, when there is too much of it in water, it causes the oxygen level to drop, damaging the aquatic life. In response to that, P&G detergent division has increasingly reduced the use of the phosphates in its detergent solution. However, phosphate is also at the origin of the bubble effect, and consumers have the preconceived (false) idea that the more it bubbles, the better is their detergent.
Educating the consumer is one of the main actions that P&G could take going forward to continue its efforts. We could see that this applies for both the pod and the phosphate situations. This is a long-term strategy, that will facilitate P&G advancements in designing more sustainable solutions. [614]
Emma Bernal & Julie Colinet
To clarify, does the liquid detergent save water by using less in the actual detergent product or requiring less water in the washing process?
The post is about reducing the use and disposal of water throughout the production of the detergent. Concentrated products are introducing new molecules that help making the washing process more efficient, challenge remains in how to achieve the reduction of water utilized by machines during the process when using these products.
In terms of water saving process Unilever is taking a holistic view of end-2-end water usage management … Unilever has a detergent which reduces the water usage during rinsing by developing a new anti-foam molecule that breaks down soap foam more quickly. This not only reduces the required water quantity but also saves time. Is P&G working on these areas as well ?
Companies like P&G and Unilever have to work also towards changing consumer behavior and perception. Simple things like consumers assuming that a large amount of detergent will clean clothes more effectively – Would concentrating the detergent to reduce water in it be accepted by consumers who have very different behaviours? Similarly adapting consumers to use less water during washing also would require a significant change in the consumer behavior – Rightly put in the article, educating the customer is key to this solution.
The idea looks a step in the right direction! Was wondering whether P&G also works with the washing machine manufacturers to develop specific washing programs for their “water saving” detergents… Believe this could be both a customers education and a marketing strategy.
Interesting read. It would be interesting to know whether this will set off competition to move in the same direction as P&G or in the opposite to reinforce or steal share of mind as a marketing strategy.