Detergent Company Complains There Are Too Many Coupons

Have you noticed more and better coupons and sales on laundry detergent lately? One detergent manufacturer certainly has – and it’s not happy about it.

Church & Dwight is not exactly a household name, but its products can be found in millions of households – including its Arm & Hammer line of laundry detergents. The company says it has spent a lot of money on innovation recently, introducing new products like Arm & Hammer pods and OxiClean laundry detergent, only to watch its competitors spend a lot of money on promotions.

“Unfortunately, some of our competitors have not invested in developing new products and instead have increased their trade and coupon spending to defend their brands,” CEO Jim Craigie grumbled to investors Thursday. These competitors, “who lack innovative new products,” he went on, “preempted the start of our marketing programs for our new laundry detergent products… by putting unprecedented levels of trade and coupon spending behind their brands to disrupt our launches.”

As a result of such challenges, Church & Dwight’s first-quarter earnings fell 4.7%.

So is the company really complaining that its competitors aren’t playing fair? That they’re offering too many coupons and having too many sales? It’s not called “competition” for nothing.

“You are seeing some outrageous promotions out there,” KeyBanc Capital Markets analyst Jason Gere agreed, before telling Craigie on Thursday’s investors’ conference call that all of those coupons and sales are “good for me, bad for you.”

And those “outrageous promotions” have been very good for consumers lately. Craigie called out two competitors by name – Henkel, the maker of Purex, and Sun, the maker of several detergent brands, including Wisk and all. And indeed, there have been several noteworthy sales on all of those brands, including recent CVS and Rite Aid offers of “buy one get two free” on Purex, Wisk and all.

At the same time, there have been some higher-than-usual-value coupons – such as a head-scratching but terrific printable Purex coupon a couple of months ago that was actually good on 100 oz. of liquid or 36-count pods “or less”. Many shoppers were reporting that they managed to combine coupons and sales to score 50-ounce bottles of detergent for little more than a buck apiece.

“We would never lead such tactics,” Craigie insisted. Then he conceded, “but we’ll be competitive.”

So if you can’t beat ’em, join ’em.

Could this be the beginning of an all-out laundry detergent price war, then? Craigie said it’s too soon to tell. But one analyst raised the specter of the “cereal wars” of the mid-1990’s, in which cereal makers responded to declining sales by slashing prices and ramping up promotions. “People got really stupid,” Deutsche Bank analyst William Schmitz said on the call.

But detergent makers aren’t stupid. Earlier this week, in seemingly unrelated news, Walmart teamed up with Tide manufacturer Procter & Gamble in announcing plans to reduce the amount of water in its liquid detergents by 25%, by 2018. Less liquid means less plastic to make smaller containers, fewer and fuller truckloads of products generating less emissions on the highways – all of which is good for the environment.

Church & Dwight issued a statement in support of the move. As well it should – because what’s good for the environment, could also be good for detergent makers’ bottom line. “Customers tend to overuse detergent when they do laundry,” points out the Wall Street Journal’s Paul Ziobro, “and the more concentrated the product, the more they tend to overuse.” The last time the major detergent makers introduced concentrated formulas in smaller bottles, back in 2008, Craigie said consumers ended up using more, and buying more, and detergent sales went up by 5%.

That should help offset the problem of pre-measured pods, which Craigie once complained are “killing the laundry detergent category,” since they’re impossible to overpour. “What kind of a new product is good when it’s hurting the total category?” he groused at an industry conference last year.

As KeyBanc’s Gere noted, whether it’s coupons, promotions, or pre-measured pods, it’s all “good for me, bad for you.” So until the pendulum swings back in the manufacturers’ direction, enjoy all the cheap detergent – while you still can.