The Shampoo Wars: Unilever vs. P&G
Hey Snackers,
Cereal. Golf. Motorcycles. We finally found all the industries Millennials are accused of ruining — and a list that sets the record straight.
Markets rose before the weekend on hopes of a Brexit deal before the 10/31 deadline, but Parliament's weekend "nay" made that unlikely. Now investors are focused on fresh 3rd quarter earnings featuring Snap, Amazon, and Tesla this week.
Unilever throws more price punches in the Shampoo Wars
Nourish the scalp. Un-split the ends. Volumize the lustrousness... Unilever lowered shampoo prices last quarter in the fight over American hair against Procter & Gamble. Straight from its latest earnings: "Competitive intensity remained high in hair care, in particular in the US." Both companies' brands battle leader L'Oréal for space in your shower caddy:
- L'Oréal (20.8% of the US hair care market): Redken, Kiehl's, Garnier
- Unilever (17.1%): Suave, Axe, Tresemme
- P&G (13.9%): Head & Shoulders, Pantene, Herbal Essence
Pulling hair is fair game... Unilever and P&G have ruthlessly fought over each fraction of a percentage point of the shampoo market for years.
- 2001: Unilever sued P&G for millions for spying on its hair care division, stealing docs from the dumpster outside Unilever's Chicago office.
- Brand-ifest destiny: Unilever stocked up on silky smooth ammo, acquiring Tresemme's owner and V05. Then P&G unleashed its Herbal Essence and Aussie shampoo brands globally.
Wet hair. Lather. Rinse. Repeat... Adding that last word to the instructions on your 2-in-1 bottle was a quick/dirty way to boost sales for the shampoo industry. Here's why Unilever's so hungry for hair care sales.
- Big profits/high margins: Humans splurge to keep their heads keratin-empowered — low production costs mean P&G and Unilever keep a big chunk of each sale as profits.
- "Minnovations": Small new benefits ("now with avocado oil!") can generate entirely new shampoo/conditioner lines — and you justify the extra buck you paid for it.
Who's up...
Fresh plastic... Venmo already basically sponsors your group brunch. But the peer-to-peer payment app just announced a credit card so that Venmo can find a way into your non-paying-people-back life. Even though Venmo has over 40M users with $300M in expected annual revenue, owner PayPal is still trying to make it profitable.
Snuggle up... Netflix added 6.8M new subscribers over the last 3 months — that's more than double what it did in the previous quarter. A record 64M households tuned into Stranger Things after its July launch, helping drive new sign-ups (Netflix nation is 158M strong). But 98% of subscriber growth came from abroad the past 6 months, so it's adding 130 seasons of non-English content in 2020, like Japanese hit The Naked Director.
...and who's down
Um, should've told us sooner... Shares of Boeing and Johnson & Johnson tanked over 6% Friday for totally similar and totally different reasons. Turns out pilots were chatting with each other years ago about "egregious" issues with the 737 Max — Boeing knew about the convos, but only just told the FAA. And J&J recalled 33K bottles of baby powder after 1 bottle was found with traces of asbestos, a known cancer-causer.
Overly hospitable... Airbnb's financial info leaked last week, showing revenues rose a solid 31%, but its loss more than doubled. Marketing costs were its biggest splurge, jumping 58% as it fights to add travelers and hosts before its planned 2020 IPO. Airbnb's not a publicly-traded stock yet, but investors haven't been into the lack of profits from Uber, Lyft, Slack, and its other unicorn buddies that IPO'd this year. Doubling your losses isn't in style right now.
What else we’re Snackin’
- Work: "One number one slide" — The presentation hack that Apple leaders love
- Life: All the food TSA won't let you bring through security (goodbye, jelly)
- Money: What $100 is actually worth in every US state
- Venture: Eventbrite's founder on why raising too much VC money isn't helpful
- Crypto: The 18-millionth Bitcoin was just mined — but you probably won't see the 21-millionth (and final) Bitcoin until the year 2140
This Week
- Monday: Canadians hit the polls to elect a Prime Minister. Earnings from Del Taco, Halliburton, SAP.
- Tuesday: Earnings from Chipotle, Snap, P&G, Lockheed Martin, McDonald's
- Wednesday: Mark Zuckerberg speaks with Congress about Facebook's cryptocurrency plans. Earnings from Tesla, Ford, PayPal, eBay, Microsoft, Caterpillar
- Thursday: Europe's Central Bank decides its interest rate policy. Earnings from Amazon, Visa, Comcast
- Friday: Earnings from Bud-owner AB-Inbev, Verizon, Barclays
Disclosure: Authors of this Snacks own shares of Tesla and Amazon.
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