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Case Study: Introduction From: To: Hey! Welcome to P&G! I'm so glad that more and more young and ambitious people like you are joining us! My name is Mickey, and I will be your mentor during your work on the project. I'm so excited that you're joining our Oral Care team! You can ask me any questions about working at P&G in general and the work we do in Oral Care. Oral Care is Paste, Manual Oral Care, and Power Oral Care, and it is one of the most innovative business segments of the company. The plan is for you to join the Oral-B team and help your colleagues work on a significant sustainability challenge to reposition Oral-B through making its products more environmentally friendly by improving packaging or introducing reuse and recycling initiatives. I do hope that you'll enjoy it. Unfortunately, I can't contact you via video chat today because I'm taking part in a major International Sustainability online conference. But please, don't worry! I've got some really exciting tasks planned for you, which will allow you to immerse yourself into our world and prepare yourself for the big challenge we must handle at Oral-B that involves all its product categories. Meanwhile, you can dive into the topic and look through some market insights and Recycling and Sustainability cases in P&G and Fast Moving Consumer Goods (FMCG) in general. You certainly know that Procter & Gamble is the world's largest FMCG company. Its Health Care category includes the Oral Care sub-category and is one of the five business portfolios within P&G and it represents 12% of the business. You may also know that P&G has the largest lineup of leading brands in the industry, with 23 brands that have over $1 billion in annual sales (our so-called "billion-dollar brands"). There are 2 "billion-dollar brands" that belong to the Oral Care portfolio. Those are Crest and Oral-B. At P&G, sustainability is embedded in how we do business. Our commitment is to leverage our scale to enable and inspire a positive impact on the environment and the five billion people our brands touch each day around the world. We provide and support sustainability awareness in our consumers in multiple areas: energy consumption, minimizing consumption and waste, recycling, avoiding plastic etc. This mission has become even more important due to the global COVID-19 pandemic. People are now more focused on health and hygiene than ever before. This includes personal hygiene, health and nutrition improvement, through doing more sports, various diets and habit improvements, increased interest in product ingredients and, therefore, natural products across personal care, including bio, organic, natural ingredients etc. In 2010 P&G set goals related to climate, water and waste, and we have made great progress there. For example, P&G made a commitment to making 90% of product packaging either recyclable or having programs put in place that will create the ability to recycle it. We have
achieved 88% of this goal and have a strong, ongoing effort to further increase recyclability. So much so that we have recently committed ourselves to Ambition 2030, our most audacious set of sustainability goals yet! Oral-B is testing circular solutions for its electric rechargeable and manual toothbrushes. The manual Oral-B CLIC features a durable handle equipped with a mechanism that allows consumers to exchange the brush head. The Loop, a global packaging and shopping circular platform that is already working with P&G brands in the US, will recycle used brush heads from both manual and electrical brushes. In several European countries, Oral-B is proposing to its consumers to replace batteries in their electric rechargeable toothbrushes to increase the life of the products, rather than buying a new one. Toothpastes and tubes are a tougher challenge for recycling, but P&G is researching solutions there also. All P&G brands, and the Oral Care category in particular, care about environmental challenges, because resources are finite, and consumption is growing every year. Our competitors are also providing environmentally friendly solutions, and we need and want to improve our factories and our products to be the leader and make our world a better place. With this in mind, what I'd like you to do is to review the data and find possible solutions for the challenges that the company, and the Oral-B brand in particular, are currently facing. On Monday, we will have a team meeting where we will discuss the findings, and I'm looking forward to hearing your ideas. In order to immerse you in the subject, I'd like to share some information on the key market trends and the Oral-B brand's key strengths and current challenges. Please e-mail me if you have any questions! See you! Mickey Jones Oral-B Regional Sustainability Manager
Question 1: Based on the information given in Mickey's email, which statement can be considered definitely correct about the P&G? (Required)
P&G has more billion-dollar brands than any FMCG company in the industry One of the reasons consumers have started to pay more attention to health and hygiene is the increased likelihood of infection P&G has set up a dedicated toothbrush recycling center P&G had 100 % zero manufacturing waste to landfill by 2020
About P&G The Procter & Gamble Company is focused on providing branded consumer packaged goods of superior quality and value to improve the lives of consumers around the world. The company was incorporated in Ohio in 1905, having been built from a business founded in 1837 by William Procter and James Gamble.
The company's purpose is to improve the lives of its consumers and today delivers this for 5 billion consumers in 180 countries through its leading, billion-dollar brands. The company's 65 individual brands are organized into 10 product categories:
Fabric care Home care Baby care Feminine care Family care Grooming Oral care Personal health care Hair care Personal and skin care The business model relies on the continued growth and success of existing brands and products, as well as the creation of new innovative products. The markets and industry segments in which P&G offers products are highly competitive. In the first quarter of 2020, the company's sales grew to reach $17.8 billion whilst delivering strong top-line growth, profit margin expansion and cash productivity enabling it to increase its outlook for fiscal year results.
Figure 1: Procter & Gamble Quarterly Sales P&G keeps track of the environmental sustainability of its own activities as well as of its suppliers. In 2018 P&G released its new sustainability goals called Ambition 2030. These broad-reaching goals have the purpose to enable and inspire positive impact on the environment and society while creating value for P&G as a company, for its customers and consumers.
By 2030, P&G plan to reduce premature mortality from non-communicable diseases by one third, through prevention and treatment, as well as promoting mental health and well-
being. The P&G Safeguard Clean Hands Healthy Kids Campaign teaches hygiene to prevent childhood illness, absenteeism and even death. The program was launched in China based on global research that washing with soap and water can prevent nearly 4 million children a year from dying before their 5th birthday. Today, the program is in schools across China, the Philippines, Pakistan, and Mexico, reaching 4.5 million students a year. P&G improve education, awareness-raising and human and institutional capacity for climate change mitigation, adaptation, impact reduction and early warning. Getting consumers to wash their clothes at low temperatures and use high-efficiency machine cycles represents a significant opportunity to reduce energy and its associated greenhouse gas emissions. In 2010, P&G set a goal to turn 70% consumption of all machine wash loads into high-efficiency quick and cold-water cycles by 2020 and was already able to reach this goal in 2019. P&G has already exceeded several of its 2020 goals early, such as reducing water use in manufacturing facilities by 20% against a 2010 baseline. GHG emissions have been cut by 16% in this time period, while more than 80% of its global manufacturing sites have achieved zero-waste-to-landfill status. In an effort to address two of the world's most pressing environmental challenges—finite resources and growing consumption — P&G has focused its ambitious goals in these specific areas.
1. 100% of leadership brands will enable and inspire responsible consumption: each brand should implement four Brand Fundamentals, which means long-term integration of meaningful and measurable social and environmental impacts into the brand strategy and experience. 2. Reduce our use of virgin petroleum plastic in packaging by 50%: P&G estimate that the use of over 300,000 tons of virgin plastic can be avoided through light weighting, increasing recycled content (PCR), driving conversion to more concentrated product forms and using alternative materials. P&G plan to achieve 100% recyclable or reusable packaging by 2030. As of 2019, 88% of P&G packages are considered recyclable. 3. Reduce our footprint and aim for circular solutions based on regeneration and restoration: 100% renewable electricity and cutting GHG emissions in half at P&G sites. P&G's sites will deliver a 35% increase in water efficiency and source at least 5 billion liters of water from circular sources. As for 2020, P&G is purchasing 100% renewable electricity in the U.S., Canada, and Western Europe. 4. Protect and enhance the forests: P&G wants to increase use of the Forest Stewardship Council® (FSC®) certified fiber to 75% across all Family Care brands by 2025.
5. Carbon neutral for the decade: the company plans to cut GHG emissions in half at P&G sites, it will address the remaining GHG emissions – an estimated 30 million metric tons over the next decade – by advancing a portfolio of natural climate solutions that leverage the power of nature: forests, wetlands, grasslands and peatlands. 6. Advance recycling solutions for Absorbent Hygiene Products: P&G will use technology invented by the company's joint venture Fater in Italy, which recycles used absorbent hygiene products to create new products and materials, in 10 cities across the globe by 2030. 7. Create solutions so no packaging finds its way to the ocean: P&G is partnering with organizations that are already finding ways to stem the flow of plastic to the world's oceans—like the Trash Free Seas Alliance in Southeast Asia.
Question 2: Calculate water savings in P&G manufacturing in 2020 if the company used 170 000 m3 of clean water on its plants in 2010. (Required)
60 000 34 000 28 000 11 000
Question 3: How much did P&G’s sales increase by in Q1 2020, compared to Q1 2019? (Required)
24,2 % 12,4 % 6,5 % 1,6 %
Question 4: Which of the following is TRUE about P&G's sustainability goals? Choose all answers that apply. (Required)
22% of P&G packages cannot be recycled or reused. One of the company's implemented initiatives to inspire responsible consumption is to produce detergents for washing in cold water. P&G is planning to achieve a reduction in the use of virgin petroleum plastic by changing the shape and material of the packaging. P&G implements environmental initiatives in collaboration with international organizations and joint ventures.
Oral Care Market
The global oral care market is projected to reach USD 53.3 billion by 2025 from USD 45.8 billion in 2020, at a CAGR of 3.1%. The growth could be explained by increasing dental healthcare awareness, rising dental healthcare expenditure, and increasing the number of dental clinics.
Figure 2: Size of the Global Oral Care Market from 2019 to 2025 (in billion U.S. dollars)
Regional Markets
o o o o o o o o o o o o o
Distribution
Asia Pacific China Japan Australia Rest of Asia Pacific (RoAPAC) Europe DACH – Germany, Austria, and Switzerland FBNL – France, Belgium, Netherlands UK/Nordics Italy Spain Russia Rest of Europe (RoE) North America US Canada Latin America India, Middle East and Africa
Consumer stores
Channels
o o o o o
Hyper and Supermarkets Retail Pharmacies and Drug Stores Electronic Stores Online distribution Direct-to-consumer Marketplaces
Products
Toothpaste Manual Toothbrushes Battery-Powered Toothbrushes Rechargeable Electric Toothbrushes and Replacement Heads Dental Flosses Breath Fresheners / Mouthwashes / Rinse Products Prescription and Non-Prescription Cosmetic Dental Whitening Products Others
The Asia Pacific oral care market is expected to show the highest growth rate during the forecast period from 2020 to 2025. The high growth rate can be attributed to the increase in the size of geriatric population associated with edentulism, a growing prevalence of dental caries and other periodontal diseases, increasing healthcare expenditure (coupled with rising disposable income), rising awareness about oral healthcare, and willingness to spend more on dental care. The analytics say that 36% of the market growth will come from Asia Pacific region. The Latin American and Middle Eastern and African markets exhibit significant growth opportunities owing to the improving dental infrastructure in these regions. North America holds the largest revenue share in terms of region. This can be attributed to the presence of sophisticated electric toothbrushes, supportive government initiatives, coupled with relatively higher disposable income in the region, and the presence of skilled dentists and dental hygienists. A picture that is also similar in Europe. According to the American Dental Hygienists' Association, in the U.S there are nearly 150,000 registered dental hygienists. They encourage oral hygiene by providing a proper dental plan and hygiene techniques, thus further propelling product demand
Figure 3: Global Oral Care Market Share, by Region, 2019, % The oral care market is highly competitive, with a growing number of players operating at the regional level. New local players in India, China, and Brazil offer oral care products at competitive prices compared to the global players. Oral hygiene awareness is an important contributor to market growth. Dentists and key players in the market conduct various seminars and programs to increase awareness of dental hygiene and the need for improvement of Oral Care habits as well as demonstrating newly launched and technologically advanced products. This increases the adoption of healthy oral care routines among consumers and promotes interest in new products. The online distribution share shows the biggest growth when compared to other distribution channels. The significant growth in the e-commerce sector is due to the increasing number of internet users and its advantages, such as low cost, free delivery and the availability of multibrand oral care products. However, consumer stores continued to account for the largest share of the oral care market in 2019. The large share that consumer stores hold in the case of oral care products can be attributed to the large number of stores across the globe and their easy access.
Question 5: Calculate the absolute growth of the oral care market attributed to the Asia Pacific region in 2025 compared to 2020. (Required)
10 billion 7,5 billion 5 billion 2,7 billion
Question 6: What was the largest distribution channel for the oral care market in 2019? (Required)
Online distribution Retail pharmacies Dental dispensaries Consumer stores
Question 7: What is the key advantage for Consumer stores? (Required)
Easily accessible A large number of different brands Low cost Help from the dental hygienists
Question 8: Calculate the size of Asia Pacific oral care market if the oral care market in Europe was worth nearly USD 12.9 billion in 2019. (Required)
USD 6 672,4 million USD 4 448,3 million USD 1 141,4 million USD 790,2 million
Question 9: According to the text, what direct impact do workshops conducted by dentists have on the oral care market? You can choose several answers. (Required)
Dentists demonstrate how to use new technology-based oral care devices. They tell their clients the correct teeth-brushing mechanics and timing. Dentists recommend patients comprehensive oral care, consisting of several steps and products. They show people several oral care products from different brands for them to choose.
Oral-B Today Oral-B is a brand of oral hygiene products, which has been owned by P&G since 2006. It was founded by a dentist in 1950 and now Oral-B is spread across 60 countries. Oral-B's toothbrushes are used by more dentists and hygienists worldwide than any other. Oral-B portfolio includes:
paste
manual toothbrushes electric toothbrushes (and replacement heads) rinse floss irrigators (water jets for interdental cleaning) children's range The brand story of Oral-B started with an important health and consumer driven improvement of toothbrushes. Oral-B introduced end-rounded bristle filaments that are gentler and safer for gums. Health and consumer relevant innovation has been an important driver for the brand since. As a result, the biggest strength that Oral-B has is their top of the line electric toothbrushes. The company successfully provides its products to people looking for the best quality and innovation, not only in the power oral care sector, but also the manual oral care sector, as using a manual toothbrush remains the most common way of brushing teeth for many people around the world. Oral-B focuses on solving problems commonly associated with toothbrush use and has a plethora of products that are essential to do this in oral care. The company introduces new features regularly, which reaffirms its brand image as the most innovative oral-care brand.
Figure 4: Oral-B Consumer Type Consumer perception of Oral-B is that it's a very reliable brand with high quality and dentist endorsed products. Because it is seen as a premium brand, not everybody sees it as an affordable brand for themselves. However, the Oral-B brand has products at virtually all relevant consumer price tiers. The brand has a huge presence at almost every location where people usually go and shop for the products for their daily needs: small stores, hypermarkets, supermarkets, malls, electronic stores and shopping centers. Oral-B brushes are also seen at Dentist's clinics. Though P&G has a considerable and relatively well-spread distribution network, the Oral-B brand has less penetration in the rural segment in comparison to cities. Also, P&G supports several initiatives aimed at improving oral care for consumers and providing professional help for its customers. One of the brightest examples is dentalcare.com. This is a web portal designed by the brands Oral-B and Crest for use by dentists and students around the world. It delivers
education, research outcomes, news, and product information to equip dental professionals with important information and experiences to better help their patients.
Question 10: You have several consumer profiles. Based on the information given in the text, which of them are more likely to be Oral-B consumers? You can choose several answers. (Required)
An active, building a career in a big city, 35-year old man, who is environmentally conscious. A 21-year old student of IT, living with his parents and interested in video games. An active, looks-conscious 50-year old man who suffers from dental problems and visits the dentist every week for professional attention. A 40-year old woman who has two children and provides her household with the newest technological solutions.
Question 11: According to the data above, what is the most complete description of the Oral-B brand strengths? (Required)
Produces premium quality oral care products using innovative technologies at an affordable price. Makes toothbrushes used and recommended by dentists around the world. Frequent innovations in a low involvement product like toothbrushes and focuses on improving oral health. Approved brand image to compete successfully with competitors' electric brushes and manual toothbrushes.
Recycling and Sustainability In line with its sustainable development strategy, P&G is working to reduce the use of primary plastics in its packaging and to keep them from entering the ocean. TerraCycle and P&G are working together on a recycling program for Old Spice, Olay, and Dawn Soft Packs. TerraCycle also has recycling programs for Oral Care in the US and China. The project is based on the Loop platform – a global packaging and shopping circular solution. It offers consumers the option to have their used product packaging collected from their doorsteps for recycling or reuse. Participation in the program consists of four stages:
Once collected, the Soft Packs are cleaned and melted into hard plastic that can be remolded to make new recycled products. P&G also makes reusable packaging for its most popular products (i.e. through refilling). Its scientists and engineers have developed innovative manufacturing, packaging and distribution solutions that will make sustainable life easy for participating consumers. Strong and reusable packaging is available for Pantene, Tide, Cascade and Crest with a further 11 brands planned to be connected in the future:
Pantene introduces a lightweight and durable aluminum bottle for shampoo and conditioner. Tide Purclean plant-based laundry detergent can be supplied in a sturdy stainless-steel bottle with twist-off lid and spout. Cascade has developed a new heavy-duty packaging for the Cascade ActionPac that allows consumers to skip the pre-wash cycle. Crest Platinum Mouthwash is packaged in a reusable glass bottle. Most traditional toothpaste tubes are made of either multilayered plastic (PBL) or plastic and aluminum (ABL) composites. While the first is technically recyclable, existing recycling facilities struggle to recycle them. One of the major manufacturers of tubes on the market created a tube made of high-density polyethylene (HDPE) - the same plastic used to make milk bottles. This should improve the recyclability of tubes in the future. It is considered impossible to use the usual recyclable type of plastic, "high densitypolyethylene" (HDPE), as it does not compress enough for toothpaste. However, the right combination of different types of HDPE allows people to squeeze out all thetoothpaste in comfort, protect product integrity, and meet high-speed production requirements. Another eco-friendly brand's toothpaste comes in an all-aluminum tube with a small metal key so that every last drop can be squeezed out. The inner metal is lined with a food grade non-BPA6 cover so the paste will never come into contact with the aluminum tube. The outer carton is FSC7 certified cardboard. The packaging of the toothpaste is manufactured in the USA, as are 98% of its ingredients, such as calcium carbonate, sodium bicarb, xylitol (birch derived), carrageenan (seaweed powder), mentha piperita (peppermint oil), hydrated silica and sodium coccyx glutamate, which is the coconut alternative to SLS. Raising awareness among dental professionals is an important step towards sustainable development in oral care. Interest in sustainable dentistry has been slow to take off, but it is growing. 36.9% of dental students are aware that some non-recyclable materials can be recycled for other uses. 33.9% of the students surveyed believe that more research is needed in the field of recycling and reuse in dentistry. Within dentistry, environmental sustainability can be measured in several ways. One such way is to analyze the carbon footprint, defined as the total greenhouse gas emissions produced during the delivery of a specific activity or the manufacturing of a product, expressed in equivalent tons of carbon dioxide (CO2-e). In order to understand how sustainable a specific healthcare practice is, researchers analyze their carbon footprint as a proxy measure of sustainability as analysis of the carbon footprint allows an understanding of which elements of current practice are not sustainable.
Figure 5: Estimation of the Carbon Emissions NHS Dentistry, United Kingdom Based on the UK data, within dentistry, the carbon footprint has been calculated to be around 3% of the total NHS footprint, or more precisely 675 kilotons of carbon dioxide equivalents (CO2 e). Travel for NHS dentistry causes air pollution, and the associated travel impact (for example, noise pollution, accidents) reduces overall population quality-adjusted life years by 14 minutes.
Question 12: What initiatives to reduce the company's footprint are NOT presented in the text? (Required)
Reusing packaging Reducing the amount of packaging Reducing the amount of water and electricity Reducing the amount of carbon dioxide
Question 13: How much carbon dioxide is generated in the UK when people travel to receive health care (in kilotons)? Please round to whole number. (Required)
183 196 210 221
Question 14: Researchers have proposed the development of special equipment for dentists that uses half the nitrous oxide of traditional equipment. According to the information above, what could have a greater positive effect on the environment than the equipment proposed by scientists, with everything else being equal? You can choose several answers. (Required)
New versions of recyclable materials that were previously wasted after use. A new version of traditional equipment that uses gas as an energy source instead of electricity. Equipment that uses less clean water for dental operations. Equipment that allows you to use three times less electricity for dental operations.
Oral Care Products Lifecycle Lifecycle of a Manual Toothbrush Materials. Toothbrushes are most often made of plastic, the exception is some biodegradable brushes made from recycled materials. Plastic is made from oil that is mined and sent to a refinery. After being sent to a refinery, the extracted gasoline is processed into various types of plastic and sent to manufacturers. Production. After receiving plastic pellets, manufacturers melt them and transform them into the desired product. The plastic is melted and injected into a toothbrush mold. The bristles on a toothbrush are usually made of nylon, which is made by pulling plastic through a fine lattice mesh with many small holes that cut the plastic into thin threads. The nylon is then inserted into the brush head and cut to the desired length using a machine. Packaging. Toothbrushes are packed in cardboard and/or plastic containers. Usage. If the hygienic recommendations are followed, a new manual toothbrush will last no more than 3 months for the consumer, after which it will be thrown away. Most traditional toothbrushes are non-recyclable, but some companies are starting to produce biodegradable and recyclable oral care products that can be sent back to the manufacturer for recycling.
Lifecycle of a Toothpaste Materials. There are multiple ingredients in toothpaste. The original minerals come from the earth, but the compounds are made with chemicals in a lab. Therefore, processing is done in the lab. Production. Each ingredient is manually and mechanically weighed. Temperature and humidity are big factors in the quality of the toothpaste. Before being filled, toothpaste tubes are cleaned. After this, caps are put on and the tubes are filled from the bottom. Packaging. Toothpastes are individually boxed and then put in a bigger box to be sent to the warehouses. From there, consumers purchase the paste and use it until the tube is empty.
Usage. After it's gone, the tube is usually thrown away, not recycled. Toothpaste tubes can be recycled, but it is quite a process. The tube must be cut open to clean out any remaining toothpaste. The cap must also be removed. Each year, 1 billion plastic toothpaste tubes end up in landfills.
Lifecycle of Dental Floss Materials. Flosses are usually made of plastic. Production. Dental floss is commonly made of two polymers, either nylon or Teflon. Nylon is a fiber forming substance composed of a long chain synthetic polyamide. Teflon is a PTFE, or polytetrafluoroethylene. Other materials may be added such as wax or flavoring. Packaging. Most of the time, the dental floss cases are blister packaged, a plastic mold affixed to a backing, made from cardboard. Usage. The lifetime can vary depending on regularity of the user. Floss is normally thrown away into the garbage, where it will later be disposed of in a landfill. Normally, floss is not recycled, but by not being biodegradable, recycling may become a viable option. Recycling floss requires cleaning and expanding new strands for future use. Waste such as PTFE is hazardous and cannot be reused.
Lifecycle of a Powered Toothbrush Materials. Electric-powered toothbrushes consist of a plastic case, electronic components, battery (either disposable or rechargeable) and a functional head. Most plastic components are made of materials that are not commonly recyclable, while the electronic components and batteries are easily reusable. The head can consist of different plastics and even metal parts which are difficult to disassemble. Production. Plastic pellets are melted and transformed into the product parts (handle, brushing head body, travel case, charging station, etc.). The electronics are assembled separately and combined with the handle, charging station and travel case. The bristles on a toothbrush head are usually made of nylon, which is inserted into the brush head and cut to the desired length using a machine. Batteries are inserted in the toothbrush and then is sealed for waterproof resistance. Packaging. Powered toothbrushes are mainly packed as electronic gadgets: either in a blister pack or in a cardboard box. Usage. Powered toothbrushes are essentially two types of products. There are disposable battery-powered toothbrushes and electric rechargeable toothbrushes. Battery-powered disposables are supposed to be discarded after 3 months of usage, while rechargeable brushes have a long-lasting 'body' which can work for 3-7 years and replacement heads which are recommended to be changed every 3 months.
Question 15: Why are many oral care products and their packages not recyclable? You can choose several answers. (Required)
During their recycling, many hazardous substances are formed that are harmful to health. Packaging and components in many cases consist of several types of different materials that are difficult to separate for recycling. There is no need to recycle them as most of the packages are biodegradable. Because this is a personal hygiene product, the recycling can be very complex due to hygiene risks.
Question 16: Choose all true statements from the list below, based on the text. (Required)
The easiest solution to the problem with recycling is biodegradable products. Nowadays the main way a user can recycle their toothbrush is to send it back to the manufacturer for recycling. Recycling of oral care products is not widely used due to logistical difficulties. Most oral care packaging uses plastic.
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Question 17: You are taking part in a meeting dedicated to P&G's sustainability development related to oral care products. Come up with one key initiative for achieving long-term results and provide detailed reasoning for it. (Required)
Question 18: You have been asked to brainstorm Oral-B's position in reusable packaging initiatives. Choose any product you want and write at least 3 suggestions about how the company could change its approach to ensure sustainable growth. (Required)
Additional Information Team Information
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