p&g sells folgers, duracell next?

A small complaint today – no real change from the usual, right? – about a comment in the AdAge article on P&G’s divestiture of the Folger’s brand of coffee.


AdAge seems surprised that Folger’s, which has been growing slowly in recent years as consumers have moved to more gourmet coffees at places like Starbucks, has done well in the fourth quarter of this slowing economy. The surprise makes no sense – Folger’s is an inexpensive alternative to the Starbucks of the world and it would make perfect sense that Folger’s would be strong as the economy slows and people react by spending less on venti chai lattes.

And, though the brand is a billion dollar brand, P&G’s long-term growth goals do mean that it doesn’t make sense to keep the brand in the company’s stable.

Also rumored to be heading out the P&G door is the Duracell brand, picked up in the Gillette merger. Though the brand’s sales are strong, growth is not, especially in its core alkaline business. Look for P&G to use the same logic of “it doesn’t fit our long-term growth goals” when the cut Duracell loose sometime before the end of 2009.


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