Michael Bennet: “I wanted to read a few excerpts from it because I think it is instructive about what we are doing. P&G's profits boomed…”

“I wanted to read a few excerpts from it because I think it is instructive about what we are doing. P&G's profits boomed with the increasing affluence of middle-class households in the post-World War II economy. As masses of housewives set up their new suburban homes, P&G marketers pledged that Tide detergent delivered cleaner clothes, Mr. Clean made floors shinier and Crest toothpaste fought off more cavities. In the decades since, new features like fragrances or ingredient and packaging enhancements kept P&G's growth robust. What is happening now? For generations Proctor & Gamble's growth strategy was focused on developing household staples for the vast American middle class. Now, P&G executives say many of its former middle-market shoppers are trading down to lower priced goods--widening the pools of have and have-not consumers at the expense of the middle. That has forced P&G, which estimates it has at least one product--and you heard the list, so this won't be surprising in 98 percent of American households--to fundamentally change the way it develops and sells its goods. For the first time in 38 years, for example, the company launched a new dish soap in the United States at a bargain price. P&G's rollout of Gain Dish Soap says a lot about the health of the middle class. The world's largest maker of consumer products is now betting that the squeeze on middle America will be long lasting.…”