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What P&G sees in the adult incontinence market

In its newly urgent quest to revive growth, Procter & Gamble (PG) is apparently looking into as many markets as possible. No comes word it's planning to enter the adult incontinence market after a 15-year absence. The world's largest consumer products company is betting that a $150 million marketing effort aimed at aging baby boomers will help jump-start its lackluster growth.

According to Advertising Age, the Cincinnati-based company may sell about 24 products under its Always line of feminine products over the next three years. P&G has been test-marketing the products under the Always Discreet name in the U.K. and will probably use the same brand in the U.S., according to the trade publication. A spokeswoman for P&G declined to comment.

Under CEO A.G. Lafley, who was called out of retirement last year to run the consumer goods giant for a second time, the maker of Tide detergent, Crest toothpaste and Pantene shampoo has slashed costs, jettisoned slower-growing businesses such as pet food and reorganized its executive ranks.

Wall Street, though, remains skeptical given the mixed signals it's getting about the state of the consumer. Shares of the company are little changed from the start of the year and analysts remain split. About 13 of the analysts who cover the stock consider it a buy or strong buy, while 12 consider a hold.

P&G can find lots about the adult incontinence that's appealing. First, demand is strong. According to data cited by Ad Age, spending on bladder control products is up 6 percent in the past year, hitting $1.6 billion as Americans age (approximately 100,000 people in the U.S. turn 65 every day). Also, the product can get a premium price, costing anywhere from 50 percent to double the price of feminine pads, Ad Age noted.

Earlier this year, P&G Chief Financial Officer Jon Moeller told a Deutsche Bank conference that P&G would be enter a new category within six months. He wasn't more specific, but an announcement on the initiative could come as soon as P&G's Aug. 1 quarterly earnings announcement, according to Tom Wilson. Cited in the Ad Age article, Wilson is a former Kimberly-Clark (KMB) executive who runs the Caregiver Partnership, a site that sells adult incontinence products. He added that P&G's move could be a "serious challenge" to Kimberly-Clark's Depend and Poise and SCA Hygiene's Serenity and Tena brands.

"The big dilemma for the current manufacturers is that P&G usually doesn't introduce me-too products, and they aren't going to settle for a small share," Wilson wrote on CareGiver Partnership. "Assuming the rumors are true and they begin shipping this summer or early fall with a full line of 24 items (pads and pull-on underwear for women in different pack counts), I expect they will target at least 25 percent of the market."

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