PZ Cussons: A Success Story of Revenue Growth Amid Brand Push
Introduction
In a highly competitive market, PZ Cussons has emerged as a shining example of sustained revenue growth. Over the past three years, the multinational hygiene company has experienced a steady increase in its financial performance, defying market trends. This article delves into the strategies and factors that have contributed to PZ Cussons’ success and examines how the company’s brand investment has played a pivotal role in its revenue growth.
Overview of PZ Cussons’ Revenue Growth
PZ Cussons’ commitment to brand building has paid off, as evidenced by its third consecutive year of revenue growth. In the 12 months leading up to May 2023, the company’s revenue increased by an impressive 10.7%, reaching £656.3 million ($890 million). This growth was driven by a 6.1% increase in like-for-like revenue, outperforming the previous year’s growth rate of 2.9%.
While PZ Cussons’ operating profit margin experienced a slight reduction from 11.3% to 11.2%, the company remained in line with its guidance. This reduction in profit margin indicates that PZ Cussons has been actively investing in its brands, with a particular focus on its “must-win” brands.
The Journey to Brand Building
PZ Cussons’ transformation from a “trade-led” organization to one focused on building strong brands has been a key driver of its revenue growth. The company’s portfolio includes well-known brands such as Carex, Imperial Leather, and Original Source.
Underpinning this transformation is a strategic shift that began nearly three years ago. PZ Cussons recognized the need to move away from a trade-centric approach and embrace the business of building brands. This shift in mindset has been embraced by the entire organization, with everyone recognizing their role in driving brand success.
Increased Brand Investment
A significant factor contributing to PZ Cussons’ revenue growth is its continued investment in brand building. The company has increased its brand investment by 20 basis points in absolute terms, although the percentage of revenue allocated to brand investment has slightly decreased. While the exact figure was not disclosed, it is clear that PZ Cussons remains committed to investing in its brands.
In the fiscal year 2023, the company implemented a planned normalization of Carex investment, focusing on its “must-win” brands. This strategic approach ensured that most brands received increased investment compared to the previous year. Although facing challenges in the UK washing and bathing category, three of PZ Cussons’ “must-win” brands – Sanctuary Spa, Original Source, and St Tropez – experienced growth despite the difficult market conditions.
Responding to Changing Consumer Needs
PZ Cussons recognizes the importance of understanding and responding to changing consumer needs. The company is acutely aware of the challenging economic environment that its customers face and is determined to offer the best possible value. By leveraging product innovation, PZ Cussons aims to meet the evolving demands of cost-conscious consumers.
An example of this approach is the launch of Cussons Creations, a budget line of shower gels. This product line, sold at a reasonable everyday price, has already become a top 10 brand within the washing and bathing sub-category. It showcases PZ Cussons’ ability to provide affordable yet high-quality options to its customers.
CEO and CMO Relationship
The success of PZ Cussons’ brand-building strategy can be attributed, in part, to the strong relationship between the CEO and CMO. Their collaboration and shared vision have been instrumental in driving the company’s turnaround. By aligning their efforts, PZ Cussons has been able to effectively implement its brand-building initiatives.
Future Outlook and Ambitions
Looking ahead, PZ Cussons aims to achieve sustainable and profitable growth in the UK market. This objective is aligned with the company’s key ambitions for the fiscal year 2024. Although the UK washing and bathing category experienced a decline in the previous year, early signs indicate an improved performance for the first quarter of the upcoming fiscal year.
PZ Cussons remains committed to investing in its brands and capabilities, serving cost-conscious consumers better through targeted innovation and productivity initiatives. By reducing complexity across the organization, the company aims to continue its track record of revenue growth.
Conclusion
PZ Cussons’ success story of revenue growth amid a brand push serves as an inspiration to businesses striving for sustainable growth in competitive markets. By prioritizing brand building, investing in key brands, and responding to changing consumer needs, PZ Cussons has achieved remarkable results. The company’s commitment to innovation and value creation has positioned it as a leader in the hygiene industry, setting a strong foundation for future growth.
PZ Cussons’ journey from a trade-led organization to one focused on building brands underscores the importance of a strategic shift and collaboration between key stakeholders. As PZ Cussons continues to navigate market challenges, its dedication to brand investment and customer-centric approaches will undoubtedly play a crucial role in its future success.
