Procter & Gamble To Benefit In All But Name From Water Purifier

Wednesday, July 25, 2007

It is common for a company to donate some of its best-selling products to poor countries or poor neighborhoods to display good corporate citizenship. But how often does a company develop a product expressly for philanthropy, and then discover there is a market for it at home?

That is what Procter & Gamble has been doing with sachets of its Pur water purifying powder, which it has distributed at cost in water-challenged countries for more than a decade.

The program was never meant to be anything other than a break-even proposition. But that was until the company realized that the single-use packets would be ideal for camping trips, other outdoor recreational uses, or to sell to U.S. tourists traveling to destinations where they cannot drink the water.

On Tuesday, the company will be selling the purifiers in the United States at what it hopes will be a tidy profit – but in a way that has branding experts scratching their heads.

Procter will allow Reliance Products, which makes reusable water containers and other outdoor goods, to sell distribute and market Pur in the United States. Procter’s name will appear in tiny type on the back of each sachet. But it is the Reliance name that will be prominently displayed on the product.
Today in Business
Amaranth trader charged in natural gas price manipulation case
Siemens plans selling auto parts unit and buying U.S. diagnostics company
Judge orders Parmalat founder tried in Europe’s largest bankruptcy

Procter will plow its share of profits back into the Children’s Safe Drinking Water program, its homegrown philanthropic project. But, for now, that fact will not appear on the Pur packages.

Few marketing experts question Procter’s decision to let Reliance distribute the product. Pur sachets are unlikely to be the kind of billion-dollar brand that generally gets Procter’s marketing juices flowing. But for Reliance, of Winnipeg, Manitoba, which does about $100 million in revenues a year, they could be a big deal.

Both companies expect the product to sell through stores that cater to campers and homeowners, particularly those in hurricane-prone areas. Reliance has long cultivated such channels, while Procter has not.

“We’ve been playing in the outdoor recreation market, and working with the Red Cross on disaster relief, for a really long time,” said the chief executive of Reliance, Charles Schiele.

Gregory Allgood, director of the Children’s Safe Drinking Water program, cites a less obvious reason behind Procter’s decision to stay in the background. “Our employees feel really good about our philanthropy program, and we don’t want to confuse the issue,” he said.

Continue reading “Procter & Gamble To benefit In All But Name From Water Purifier

Source: International Herald Tribune (link opens in a new window)