IDEAS WANTED - The Clorox Company
IDEAS WANTED - The Clorox Company
IDEAS WANTED - The Clorox Company
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F O U R T H Q U A R T E R 2 0 1 1<br />
<strong>IDEAS</strong><br />
<strong>WANTED</strong><br />
OPENING THE DOORS<br />
OF INNOVATION TO<br />
DRIVE GROWTH<br />
THE e-COMMERCE EVOLUTION<br />
CHINA: THE LAND OF OPPORTUNITY
F O U R T H Q U A R T E R 2 0 1 1<br />
It’s better to be well-trained<br />
than lucky when it comes to a<br />
safe workplace.”<br />
Allen Young on building an accidentfree<br />
workplace<br />
This demonstrates how talented,<br />
creative and thoughtful <strong>Clorox</strong><br />
employees are. With some of the<br />
ideas, I thought to myself, ‘YES,<br />
I have needed this item for a<br />
long time!’”<br />
Amie Clark on the ideas shared during<br />
the !nnovent 2011 contest<br />
Water ... beautiful and so<br />
refreshing!”<br />
Miguel Garcia responding to the Brita ®<br />
team’s partnership to eliminate bottledwater<br />
waste at the Sundance Film Festival<br />
Newspapers work well for protecting<br />
floors from dropped eggs or<br />
banana chunks, but are virtually<br />
powerless against flour that slips<br />
between its pages.<br />
Tiffany Tan Kohler in her Mom Moments<br />
blog<br />
LETTER FROM THE CEO<br />
Driving Innovation<br />
Fellow Employees:<br />
Several years ago, we set a goal for ourselves to drive at least two points of sales growth<br />
annually through innovation. We have exceeded that goal every year since FY04.<br />
Over the years, I’ve learned past performance is often a great predictor of future<br />
success. So I feel very confident that we will continue to be successful with our<br />
innovation efforts.<br />
Our categories are soft, and commodity prices are rising. We’ve got a lot of<br />
smart people here at <strong>Clorox</strong> who have helped navigate some pretty rough seas<br />
in the past few years. But we will do more than hunker down and wait for the<br />
economy to recover.<br />
Look at Apple. If they can sell 15 million $600 iPads in this kind of economy in just<br />
nine months, we can certainly find new ways to build our categories and brands.<br />
Companies that focus on driving innovation during these rough times are the<br />
companies that will emerge stronger than ever in the years to come.<br />
And that’s what we’re doing — we’re driving innovation across our business,<br />
around the world. In January, we introduced <strong>Clorox</strong>® CloroGel, a new product<br />
that taps into the growing market of Hispanic consumers in the U.S. <strong>The</strong> Poett®<br />
and Mistolín® brand teams continue to expand their line-up with new dilutable<br />
cleaners and aerosols in Latin America. We’ve introduced new flavors in the Food<br />
business, including K C Masterpiece® southern style barbecue sauce and buffalo<br />
marinade. And for those green consumers on the move, we’ve launched new Brita®<br />
on-the-go reusable bottles.<br />
But it’s not just about new products; it’s about innovation across the 3Ds of Desire,<br />
Decide and Delight.<br />
Consider the Hidden Valley® business. <strong>The</strong> team has proven we can go beyond<br />
salad. We provide recipes that incorporate our products into everyday cooking.<br />
Our dressings and dry mix now sit next to fresh produce, meat, chips, dairy items<br />
and frozen foods. And through all of this, as volumes have risen and we have<br />
gained over two share points in the last three years, the Reno and Wheeling plants<br />
have also found innovative ways to drive spending down.<br />
Consistently, I see <strong>Clorox</strong> people coming up with new ideas: compelling marketing<br />
plans, big and small supply chain improvements, simplified financial processes,<br />
and workspace and technology solutions that make it easier to share ideas.<br />
All of this helps drive compelling products for our consumers, better relationships<br />
with our customers and stronger growth for our shareholders. Add it up, and<br />
there’s a multitude of reasons we can all believe in <strong>Clorox</strong> for the years to come.<br />
Thanks for everything you do every day, and let’s all keep looking for ways to<br />
innovate and grow.<br />
<strong>The</strong> <strong>Clorox</strong> <strong>Company</strong><br />
Corporate Communications<br />
1221 Broadway, Oakland, CA 94612<br />
510-271-3004<br />
corporate.communications@clorox.com<br />
Don Knauss<br />
2
In Brief<br />
Project Atlas<br />
Moves Toward<br />
Implementation<br />
Major progress continues<br />
on Project Atlas, our<br />
multiyear initiative to<br />
standardize processes,<br />
centralize International<br />
data and give leaders<br />
access to information they need to<br />
make better decisions faster.<br />
To date, efforts have focused on<br />
process and system design. <strong>The</strong> focus<br />
is now shifting toward the first wave<br />
of implementation in Latin America<br />
South. Priorities include defining roles<br />
and providing educational sessions to<br />
help impacted employees learn more<br />
about the project and the required<br />
preparation.<br />
Additionally, team members are busy<br />
with system testing and deployment<br />
planning to minimize business impact<br />
when we go live, as currently planned,<br />
in August.<br />
For more information, visit <strong>Clorox</strong>Web ><br />
Departments & Locations > Project Atlas.<br />
Chlorine Institute<br />
Recognizes Bleach<br />
Plant Safety<br />
Our U.S. and Puerto Rico bleach plants<br />
recently received the 2010 Chlorine<br />
Institute Process Safety Award for zero<br />
reportable chlorine releases and no<br />
risk management plan incidents. Three<br />
plants — Los Angeles, California;<br />
Tampa, Florida; and Houston, Texas<br />
— were also awarded the Chairman’s<br />
Safety Excellence Award for<br />
outstanding performance in 2010.<br />
<strong>The</strong> Los Angeles and Tampa plants<br />
both worked more than 180,000<br />
hours without a reportable accident,<br />
and the Houston plant achieved an<br />
impressive 420,000 hours without a<br />
reportable accident.<br />
HOLD THE<br />
SALT,<br />
SAVE YOUR<br />
HEALTH<br />
Reduce your risk of heart attack and<br />
stroke by reducing your sodium (salt)<br />
intake. <strong>The</strong> U.S. government and the<br />
American Heart Association now<br />
recommend that most adults consume<br />
no more than 1,500 mg of sodium<br />
daily.<br />
What are some of the biggest salt<br />
culprits in your diet? Processed,<br />
packaged and restaurant foods are<br />
often the biggest offenders. Lunch<br />
meats, sausage, bacon, ham, regular<br />
canned soups and most boxed or<br />
frozen pasta, potato and rice dishes<br />
have a lot of sodium. Also, some of<br />
the foods we consider healthy can also<br />
pack a sodium punch: Canned veggies,<br />
fat-free cottage cheese, and canned<br />
tomato juice can be surprisingly high.<br />
Wean yourself slowly and your<br />
taste buds will follow. It may take<br />
a few months, but eventually, your<br />
craving for salt will be replaced by<br />
an appreciation for all the subtle and<br />
vibrant flavors of healthier foods.<br />
And in the process, you’ll be doing<br />
something good for your heart and<br />
your brain.<br />
Source: <strong>The</strong> YOU Docs: Mehmet Oz, M.D. and<br />
Michael Roizen, M.D.<br />
TRY THESE TIPS FOR REIGNING IN<br />
YOUR SODIUM INTAKE WITHOUT<br />
SACRIFICING SATISFACTION:<br />
Aim for products<br />
labeled as “sodium-free”<br />
or “lowsodium”<br />
versus<br />
“lower sodium.”<br />
Keep your portions in<br />
check. Supersizing can<br />
more than double the<br />
sodium content.<br />
Use fresh herbs,<br />
spices, peppers,<br />
onions, garlic, lemon,<br />
lime and balsamic<br />
vinegar to add some<br />
zing to your dishes.<br />
Read the product<br />
label nutrition<br />
facts. Awareness<br />
often leads to<br />
healthier choices.<br />
Go for naturally lowsodium<br />
foods: fresh<br />
fruit and vegetables,<br />
whole grains, fresh<br />
fish and poultry.<br />
Compare brands —<br />
the same kind of food<br />
can have vastly<br />
different sodium levels.<br />
3
<strong>IDEAS</strong><br />
<strong>WANTED</strong><br />
OPENING THE DOORS<br />
OF INNOVATION TO<br />
DRIVE GROWTH<br />
BY ALISON OHLHOFF,<br />
DIAMOND CORRESPONDENT<br />
mother of six and grandmother of four goes online to share<br />
A product ideas with <strong>Clorox</strong> that she believes will make a mom’s<br />
job easier.<br />
A <strong>Clorox</strong> scientist asks an online network of suppliers for their<br />
ideas about a problem he’s having in the lab.<br />
<strong>Clorox</strong> employee teams from around the world pitch business<br />
proposals — as selected by their peers — to the <strong>Clorox</strong> Executive<br />
Committee.<br />
Increasingly, we’re opening the doors of innovation at <strong>Clorox</strong>.<br />
And in the process, we’re fundamentally changing the way we<br />
conceive growth ideas.<br />
We’re dreaming bigger with outside input<br />
“Historically, we’ve tended to hunker down and not always<br />
connect with one another,” says Greg Piche, Idea Network<br />
lead. “But that’s changing. People understand that we need to<br />
grow, and that our survival depends on stepping back from<br />
4
our current workloads and dreaming<br />
bigger together.”<br />
A large part of dreaming bigger is our<br />
increasing focus on open innovation.<br />
For example, a smaller company like<br />
<strong>Clorox</strong> — with an R&D budget a fraction<br />
of the size of our larger competitors —<br />
can vastly increase the idea pipeline<br />
by working with external companies<br />
that have complementary capabilities<br />
and expertise.<br />
We began using this open innovation<br />
approach more than a decade ago<br />
when we started working with external<br />
partners on the creation of new products.<br />
On one project, we licensed packaging for<br />
<strong>Clorox</strong>® Bleach Pen® gel from a Japanese<br />
glue stick manufacturer.<br />
A few years later, in 2003, we began a<br />
joint venture with Procter & Gamble to<br />
drive innovation and growth for Glad®<br />
products. <strong>The</strong> joint venture used P&G<br />
technology originally developed for<br />
diapers to enable superior stretch, tear<br />
resistance and adhesive properties for<br />
ForceFlex® trash bags and Press’n Seal®<br />
wrap. Last year, we began offering P&G’s<br />
Febreeze® technology in our OdorShield®<br />
trash products.<br />
Over the years, we’ve evolved our<br />
approach to open innovation. Imagine<br />
innovation as a funnel. Lots of ideas for<br />
new products feed into the wide end of<br />
the funnel, but as the funnel narrows,<br />
FIND<br />
<strong>IDEAS</strong><br />
Develop external networks<br />
to increase the sources of<br />
new ideas.<br />
BUILD<br />
OPPORTUNITIES<br />
DEVELOP<br />
IS THERE<br />
A NEW WAY<br />
TO LOOK AT<br />
SOMETHING?<br />
Get more information at<br />
Innovent2011.com<br />
!nnovent 2011, our employee idea contest,<br />
attracted more than 600 participants, 1,000<br />
comments and ratings, and 380 new product<br />
and business process ideas.<br />
ideas are screened out and only a few are<br />
developed and launched.<br />
“When we increased our open innovation<br />
efforts in 2000, we were focused<br />
in the middle of the innovation<br />
funnel, looking for technologies to<br />
develop ideas we already had,” says<br />
Jennifer Miller, director — Marketing,<br />
Corporate Innovation. “Now we want to<br />
use open innovation to come up with the<br />
ideas themselves, to make the mouth of<br />
the funnel even wider.”<br />
<strong>The</strong> open innovation approach<br />
we’re using can provide new<br />
opportunities and new solutions,<br />
as well as completely new ideas.<br />
Use others’ capabilities and<br />
expertise combined with internal<br />
strengths to find better product<br />
and technology solutions with less<br />
up-front time and investment.<br />
LAUNCH<br />
Develop<br />
and launch<br />
meaningful<br />
products.<br />
<strong>Clorox</strong> Named<br />
Partner of Choice<br />
In April, <strong>Clorox</strong> received the 2011 Open<br />
Innovation Partner of Choice Award,<br />
presented by marcus evans conferences.<br />
<strong>Clorox</strong> received multiple nominations<br />
for our Open Innovation Networks<br />
team, which helps drive innovation<br />
through external partnerships. <strong>Clorox</strong><br />
was selected through a process that<br />
surveyed peers and innovation leaders<br />
from a cross-section of North American<br />
industries, including past delegates of the<br />
annual marcus evans Open Innovation<br />
conference. A panel of judges determined<br />
this year’s winner based on contributions<br />
to the discipline of open innovation. Past<br />
winners include P&G and General Mills.<br />
<strong>Clorox</strong> connects employees,<br />
consumers, suppliers and inventors<br />
<strong>The</strong> corporate Open Innovation<br />
Networks (OIN) team is leading the<br />
charge to connect internal teams with<br />
external ideas and capabilities. This<br />
includes tightening their internal<br />
connections to the business units to<br />
ensure that the ideas they deliver are in<br />
lockstep with the SBUs’ strategies and<br />
core capabilities.<br />
A key resource for collecting ideas is<br />
<strong>Clorox</strong>Connects, an online forum<br />
where hundreds of <strong>Clorox</strong> employees,<br />
consumers, suppliers and inventors<br />
share and discuss ideas, and collaborate<br />
on improvements that could help <strong>Clorox</strong>.<br />
“Real innovation happens when<br />
communities develop. This is the value<br />
of <strong>Clorox</strong>Connects,” says Andy<br />
Gilicinski, director – Research &<br />
Development. “When you get people<br />
who are interested in an idea and passionate<br />
about the possibility, and they<br />
begin to associate with each other,<br />
that’s where the magic happens.”<br />
“We’re striving to create a ‘publish,<br />
then edit’ environment,” says Greg,<br />
who spearheaded the effort to get<br />
<strong>Clorox</strong>Connects off the ground and<br />
now serves as the community’s mayor.<br />
“We want to get people to a place where<br />
they feel like they can share ideas and<br />
5
technologies freely, without wondering<br />
who will think what of what.”<br />
Idea contest gets people<br />
comfortable sharing ideas<br />
<strong>Clorox</strong>Connects powered the !nnovent<br />
2011 employee idea contest. Employees<br />
submitted ideas online, and their<br />
colleagues rated and commented on<br />
their ideas. <strong>The</strong> final seven teams — who<br />
were given time, funds and training —<br />
will present their business proposals to<br />
the <strong>Clorox</strong> Executive Committee in June<br />
for an opportunity to see their idea go<br />
to market.<br />
“We got 380 ideas for products or business<br />
processes, and some of them really<br />
pushed the boundaries, like Burt’s Bees®<br />
surfboard wax,” Greg says. “People took<br />
time to craft really well-thought-out<br />
<strong>Clorox</strong>Connects, an<br />
important piece of our<br />
open innovation strategy,<br />
brings employees,<br />
consumers, suppliers and<br />
inventors together in an<br />
online forum to share and<br />
discuss product ideas and<br />
improvements.<br />
ideas, and they felt comfortable posting<br />
these things online where everyone else<br />
could see them. That’s the culture change<br />
we’re looking for. This is how we always<br />
want people to work.”<br />
We also run regular contests for<br />
consumers, who can win cash prizes for<br />
submitting their new product ideas or<br />
improvements.<br />
“We’ve only scratched the surface with<br />
<strong>Clorox</strong>Connects,” Greg says. “But if<br />
we continue down this path, we’ll see<br />
more and more value come from it.”<br />
<strong>Clorox</strong> connects with outside inventors<br />
We’re also working with Evergreen<br />
Innovation Partners (IP) to collect and<br />
filter inventor ideas.<br />
“We act as the front-end evaluation<br />
engine for new product submissions,”<br />
says John Funk from Evergreen IP. “We<br />
look for a fit with <strong>Clorox</strong> and evaluate the<br />
consumer appeal, as well as work with<br />
the inventor to strengthen the appeal<br />
and the ‘pitch.’”<br />
And, we’ve engaged with the Edison<br />
Nation network of inventors.<br />
“We posted a challenge around how to<br />
stop the spread of infection in the home,<br />
and many came back with solutions,”<br />
Greg says. “It didn’t end up generating<br />
a product, but it did generate good<br />
discussion, so it was still quite valuable.<br />
It was also a good way to spread the word<br />
that ‘<strong>Clorox</strong> is open.’”<br />
Getting the word out about open<br />
innovation at <strong>Clorox</strong> is important.<br />
We’ll always be scouting and searching<br />
for new ideas, but ideally, by<br />
building and marketing a culture of<br />
open innovation, we’ll start to see more<br />
companies and inventors coming to us<br />
with exciting ideas.<br />
“<strong>The</strong> vision and willingness to push<br />
ourselves is incredibly exciting. With<br />
strong support from senior leaders, we’re<br />
becoming a very open and agile culture,”<br />
Andy says. “We have great ideas, great<br />
products and great technologies, and<br />
now we’re looking for those new sparks<br />
or catalysts that can help us think<br />
differently and bring it all together.”<br />
!nnovent 2011 attracted 380 employee ideas from around the world. <strong>Clorox</strong> provided training, a budget and time to help finalists develop their business proposals, which<br />
they will present to the <strong>Clorox</strong> Executive Committee in June. Clockwise from left: finalists MJ Huang, Andrew Doan, Brittney Elko, Don Swatling, Matthew Harrington, Paul<br />
Walker and !nnovent bootcamp trainers Adam Simons and Sharon Olsen.<br />
6
READY TO<br />
RESPOND<br />
CRISIS MANAGEMENT HELPS ENSURE<br />
WE’RE PREPARED WHEN DISASTER STRIKES.<br />
BY DAN STAUBLIN<br />
operations as quickly and effectively as possible following<br />
an event that renders a function, process or facility unable to<br />
operate. (To see if your function or location has a BCP, ask<br />
your manager or check <strong>Clorox</strong>Web > Policies & Procedures ><br />
Business Continuity.)<br />
In addition, two cross-functional EOC teams, which convene<br />
in Pleasanton, California, and Bentonville, Arkansas, manage<br />
our companywide response to major threats. In March, we<br />
conducted our fifth annual EOC exercise. It was the first to<br />
include both teams, which, together, are composed of more than<br />
160 employees from all functional areas. <strong>The</strong> integrated exercise<br />
— teams interacted via videoconference and phone — simulated<br />
a multinational attack on technology and transportation<br />
infrastructure.<br />
Familiarize yourself with <strong>Clorox</strong> emergency resources<br />
“Our first concern is always for the safety and well-being of our<br />
employees,” Kathryn says. “That principle — and a commitment<br />
to communicate as quickly and openly as possible — are at the<br />
heart of our global crisis management program and drive the<br />
decisions we make when facing an emergency.”<br />
All employees should be familiar with the following<br />
communication resources:<br />
On March 11 at 4:18 a.m. Pacific time, a phone call awakened<br />
Kathryn Caulfield, who oversees the company’s crisis<br />
management function. <strong>The</strong> world’s fourth largest earthquake<br />
since 1900 had just struck Japan, and tsunami alerts had been<br />
issued for the west coasts of the U.S. and Latin America.<br />
Within minutes, our Emergency Operations Center (EOC) core<br />
team initiated a conference call to evaluate the situation: Were<br />
<strong>Clorox</strong> employees and contractors worldwide accounted for and<br />
safe? Were any of our operations in danger from the tsunami?<br />
Should employees report to work? Should we activate the EOC?<br />
<strong>The</strong> team quickly worked through questions like these and<br />
formulated an action plan.<br />
• Emergency hotlines: <strong>Clorox</strong> is rolling out dedicated<br />
numbers globally that employees can call for information and<br />
instructions after an incident, as well as to report an incident.<br />
In the U.S. and Canada, the number is 1-800-UR-CLOROX<br />
(1-800-872-5676). For your country’s number, see the<br />
reference guide inserted in this issue of Diamond magazine<br />
or send an email to business.continuity@clorox.com.<br />
• www.<strong>The</strong><strong>Clorox</strong><strong>Company</strong>.com/incident: In an emergency,<br />
we may activate a special section of our corporate external<br />
website with information for employees, customers,<br />
suppliers and other stakeholders.<br />
You should also monitor your work voicemail and email and<br />
<strong>Clorox</strong>Web for updates following an incident.<br />
<strong>Clorox</strong> has a strong crisis management strategy<br />
Our responses to situations like the Japan earthquake and<br />
tsunami are the result of a well-thought-out strategy, clear roles<br />
and responsibilities, and extensive planning and exercises.<br />
“We’ve had a strategy and plans in place for several years to handle<br />
large-scale crises, ranging from natural disasters to pandemics<br />
to civil unrest,” says Scott Grago, director – Enterprise Crisis<br />
Management.<br />
Teams across the company have developed more than 200<br />
business continuity plans (BCPs) to restore normal business<br />
<strong>The</strong> Emergency Operation Center (EOC) exercise in March required teams in<br />
Pleasanton, California (pictured), and Bentonville, Arkansas, to collaborate in<br />
responding to a simulated multinational attack on technology and transportation<br />
infrastructure.<br />
7
THE<br />
e-COMMERCE<br />
EVOLUTION<br />
WE’RE WORKING TO CONVERT<br />
e-SHOPPERS AT THE POINT OF<br />
e-DECIDE.<br />
BY AMY HARMON<br />
Every day, people are moving more activities online. <strong>The</strong>y’re<br />
sharing photos, they’re streaming movies and they’re shopping.<br />
“E-commerce is a rapidly growing channel for buying and selling<br />
products, and for consumer packaged goods, it’s expected to<br />
grow by up to 15 percent annually by 2015,” says Kristin Wonzen,<br />
senior group manager – e-Commerce.<br />
That’s why <strong>Clorox</strong> is making it a priority to be in the e-commerce<br />
game in three primary ways:<br />
1. Selling direct. <strong>The</strong> Burt’s Bees® brand is the only business<br />
where we sell directly to consumers online. Although we don’t<br />
plan to offer this model across other <strong>Clorox</strong> brands, it works well<br />
for Burt’s Bees products.<br />
“Many consumers visit our site to research our products before<br />
they make a purchase, so we aim to provide all the information<br />
they’re looking for,” says Lynnette Montgomery, director –<br />
e-Commerce & Digital Marketing. “While our products are<br />
widely available in retail stores, consumers often go online to<br />
find smaller scale items like the Burt’s Bees Outdoor line.”<br />
2. Selling on retail customer websites. Many of our products<br />
are available on our retail customers’ e-commerce sites, like<br />
Walmart.com and Target.com.<br />
3. Selling through e-tailers. True e-tailers only sell products<br />
online and do not have physical storefronts.<br />
“<strong>Clorox</strong> is focused on growing three key e-tailer relationships:<br />
Amazon.com, Drugstore.com and Soap.com,” says Bob<br />
Richardson, director – Sales. “Online shoppers flock to these<br />
sites every day because they offer product information, wide<br />
variety, competitive pricing and often free shipping with a<br />
minimum purchase.”<br />
e-Shopper behaviors: a mix of research and purchasing<br />
“Some people never buy online,” Kristin says. “Like my mom —<br />
she’s hesitant to put her credit card on the internet, so she insists<br />
on going to the physical store to do her shopping.”<br />
Others are online loyalists who value the convenience, variety<br />
and ability to compare everything from groceries to electronics<br />
online.<br />
<strong>The</strong> Buy it Now! button<br />
on Glad.com gives<br />
consumers a snapshot<br />
of available Glad ®<br />
product prices on<br />
different e-commerce<br />
sites.<br />
8
efforts around the Burt’s Bees, Glad® and<br />
Brita® brands.<br />
But the majority of people land<br />
somewhere in between. <strong>The</strong>y might drop<br />
by the grocery store a few times a week<br />
for fresh groceries and then do some of<br />
their holiday gift shopping online. Or<br />
they research and compare products<br />
online before going to a store to make<br />
a purchase.<br />
“For every person who buys online, there<br />
are six people who research online but<br />
still go into a store to buy,” Kristin says.<br />
While books, music and personal<br />
electronic products have thrived for<br />
many years in the e-commerce space,<br />
household products are just beginning<br />
to catch on, and we’re focusing our<br />
Making progress with e-tailers<br />
<strong>Clorox</strong> is still in the early stages of<br />
tapping into the power of e-tailers, but<br />
we’re making progress in several areas.<br />
First, we’re using “Buy it now” buttons<br />
on our brand sites to convert more<br />
consumers from researching online to<br />
buying online. When they click these<br />
buttons, a list shows product pricing at<br />
multiple e-commerce sites where they<br />
can purchase the item. <strong>The</strong>se are now on<br />
Glad.com and will be on GreenWorks.com<br />
and Brita.com by the end of FY11.<br />
Second, Kristin and her team are<br />
developing a digital product catalog<br />
to simplify and improve the process<br />
of providing product information to<br />
e-commerce sites. Previously, scattered<br />
information and an unclear process<br />
resulted in limited, inconsistent and<br />
often incorrect information online.<br />
“We’ll have a single database where our<br />
sales team and brokers can find the most<br />
up-to-date information on any given<br />
product,” Kristin says. “We’re working<br />
toward building a minimum of 1,000<br />
items in the catalog, and an early version<br />
is already available on our internal<br />
SalesWeb site.”<br />
Longer term, Kristin hopes to add more<br />
content, including secondary images,<br />
expanded product information and<br />
videos that will help consumers with<br />
their research and improve our brand<br />
presence online.<br />
Third, we’re partnering more closely than<br />
ever with e-tailers to better understand<br />
their needs and how to best work with<br />
them. In a recent top-to-top meeting<br />
with Drugstore.com, we learned they’re<br />
interested in our less popular, but proven<br />
brands like Handi-Wipes® cloths.<br />
“Our e-tailers are interested in selling<br />
On the Burt’s Bees ® website, consumers can<br />
research products, use tools like the Lip Shade<br />
Finder, and buy items directly.<br />
items that are discontinued or difficult<br />
for people to find in stores,” Kristin<br />
says. “And they want to offer new items<br />
for presale before launch. For the Brita®<br />
bottle launch, we partnered closely with<br />
e-tailers to generate buzz through digital<br />
marketing and linked people to where<br />
they could buy online.”<br />
<strong>The</strong> next time you’re ready to purchase<br />
one of our products, consider buying it<br />
online to get a feel for our e-shoppers’<br />
experiences.<br />
FUN eFACTS<br />
64<br />
percent of people in the<br />
U.S. shopped online during<br />
the 2010 holiday season<br />
<strong>The</strong> Burt’s Bees ® brand is<br />
one of the top 5 sellers<br />
on Drugstore.com<br />
5 percent of total<br />
retail sales<br />
are online<br />
Only 0.1 percent of<br />
<strong>The</strong> <strong>Clorox</strong> <strong>Company</strong>’s<br />
sales are online<br />
Digital marketing<br />
banners — like this<br />
Brita ® bottle ad<br />
on Soap.com —<br />
take shoppers to<br />
e-commerce sites<br />
where they can<br />
purchase products<br />
online.<br />
9
Where in the World Is <strong>Clorox</strong>?<br />
CHINA<br />
THE LAND OF OPPORTUNITY<br />
BY JEN DOZIER<br />
10<br />
“If you lived in the early 1800s,<br />
the place to be to make<br />
something of yourself was<br />
London. In the early 1900s,<br />
it was New York,” says Mike<br />
Rytokoski, vice president –<br />
general manager & Business<br />
Development, Greater China.<br />
“In the 2000s, it’s Shanghai.”<br />
For the past two decades, China has been an economic sensation,<br />
reporting double-digit annual gross domestic product<br />
(GDP) growth. In the past 10 years, China has built 50,000 new<br />
skyscrapers, which equates to about 10 New York Cities. And<br />
over the next five years, experts anticipate more than 300 million<br />
people (about the size of the entire U.S. population) will move<br />
from rural to urban areas of China in search of opportunities.<br />
But while China is expected to pass the U.S. within the next<br />
10 years to become the world’s largest economy, it is still a<br />
relatively undeveloped country. With more than 1.3 billion<br />
people, the GDP per capita is still significantly behind the<br />
U.S. and other developed markets. And that leaves <strong>Clorox</strong> a<br />
lot of room for opportunity.<br />
<strong>Clorox</strong> currently has a small, but fast-growing business in<br />
China. <strong>The</strong> Glad® business is the No. 1 food storage brand<br />
in Southern China and Hong Kong. <strong>Clorox</strong>® liquid bleach is<br />
also the market leader in Hong Kong.<br />
Today we have a team of about 300 employees in Guangzhou,<br />
Beijing, Shanghai and Hong Kong, as well as a manufacturing<br />
plant in Conghua.<br />
“<strong>The</strong> team shares a dream for building a business and<br />
making lives better for their families and themselves. <strong>The</strong>re<br />
is a feeling it can be done,” Mike says.<br />
<strong>The</strong> power of category growth in emerging markets<br />
Economically, there are two primary groups of countries<br />
in the world. <strong>The</strong> first group includes large and mature<br />
markets, like the U.S. and Europe. While consumers’<br />
incomes may grow, they are more likely to buy luxury goods<br />
versus spending more on cleaning products. Most of our<br />
categories are relatively developed, and we grow by winning
market share from the competition or<br />
acquiring businesses.<br />
<strong>The</strong> second group includes fastgrowing,<br />
emerging markets. Many<br />
are still small economies, but they<br />
offer significant potential for longterm<br />
growth. Emerging markets have<br />
unique challenges, but generally, we<br />
grow as the category grows. As income<br />
levels rise, new consumers discover<br />
our product categories for the first<br />
time, and existing consumers begin<br />
to trade up to slightly more expensive,<br />
better-performing premium products.<br />
“To accelerate our own growth, we<br />
are looking at investing more in<br />
countries, categories and channels<br />
that are growing faster.” Mike says.<br />
“This is where China fits into our<br />
overall corporate portfolio strategy as<br />
a source of important future growth.”<br />
Most of our product categories are<br />
growing by double-digits in China,<br />
and we see potential for continued<br />
growth for some time to come.<br />
Expanding into new urban areas<br />
and varied economies<br />
China is so geographically large and<br />
diverse, we have to focus on specific<br />
areas. About a year ago, we expanded<br />
northward from Southern China,<br />
beginning in the Beijing metropolitan<br />
area. We now sell Glad products in<br />
almost 2,000 stores in northern China,<br />
and the Glad brand is already No. 2 in<br />
the food storage category in Beijing.<br />
<strong>The</strong> team is also working to expand<br />
our consumer base. As with all of our<br />
markets, understanding the consumer<br />
is key. While we use our knowledge<br />
from other markets, we have also<br />
found some very distinct differences<br />
among Chinese consumers.<br />
For example, the average Latin<br />
American consumer loves fragrance.<br />
Through consumer testing, we know<br />
the opposite is true for Chinese<br />
consumers. Typically their living<br />
spaces are so compact, a fragrance<br />
will overpower the senses. <strong>The</strong>se<br />
consumers also typically equate<br />
fragrance with chemicals, which they<br />
want to avoid.<br />
Also, the average consumer in China<br />
today spends one tenth of what an<br />
average consumer in Latin America<br />
spends on home cleaning products,<br />
indicating significant upside potential.<br />
“We are focusing on premium products<br />
that have 60/40 wins with consumers.<br />
But we will also have a range of<br />
products with lower price points to<br />
help consumers with limited incomes<br />
enter the food storage category and<br />
buy a desired multinational brand,”<br />
Mike says. “Over time, we want to<br />
move more consumers from middletier<br />
to premium-tier products that<br />
offer superior performance as income<br />
levels continue to rise in China.”<br />
HOW BIG<br />
IS CHINA?<br />
Despite being large enough to span<br />
FIVE TIME ZONES,<br />
China has just one: China Standard Time.<br />
China is the<br />
FOURTH LARGEST<br />
country in the world by land mass and the fi rst<br />
largest by population.<br />
1,331,000,000 +<br />
Chinese people make up roughly 20 percent<br />
of the world’s population.<br />
<strong>Clorox</strong> China employees gathered for their spring banquet to celebrate successes and talk about the future of the business.<br />
11
GOING<br />
FOR THE<br />
GREAT<br />
Q&A WITH JUAN GARIBALDI<br />
VP – GENERAL MANAGER<br />
LATIN AMERICA SOUTH & ANDEAN CLUSTER<br />
MINIRÉSUMÉ<br />
Joined <strong>Clorox</strong>: December 2003<br />
Background: I started going to university while working in<br />
finance at an oil company. Before joining <strong>Clorox</strong>, I held sales<br />
and marketing positions at Molinos (the largest food company<br />
in Argentina), MasterCard and PepsiCo.<br />
Education: Bachelor’s degree in administration and Certified<br />
Public Accountant degree from Universidad Católica Argentina,<br />
master’s in business administration from Universidad del<br />
CEMA.<br />
Home town: Buenos Aires, Argentina<br />
INSIGHTS<br />
What’s the best advice you ever received from a mentor?<br />
I had a mentor who said to put myself in other people’s shoes<br />
every time I have to make hard decisions related to people.<br />
Working in a global business is all about understanding that<br />
people have different views because of different perspectives,<br />
and we can learn from everyone, every time.<br />
What is your favorite vacation spot?<br />
<strong>The</strong>re is a lovely beach in Uruguay called Punta del Este where I<br />
get to spend time with my kids. We also have our favorite ranch<br />
outside of Buenos Aires where we disconnect from work and TV<br />
and connect with nature.<br />
What is your favorite quote?<br />
“Don’t be afraid to give up the good to go for the great,” by John<br />
Rockefeller. I believe in going the extra mile. To truly succeed is<br />
to put in more effort, always ask for more and never stop.<br />
REFLECTIONS<br />
How is the International Division working to grow sales to<br />
25 percent of total company sales by 2013?<br />
We are continuing to focus on building consumer loyalty to our<br />
brands. We have strong share positions in our countries, and we<br />
need to continue having the right people and the right brands to<br />
maintain our lead.<br />
Innovation is key to growth, and we’re innovating across our<br />
portfolio. On the fragrance platform, for example, the launch<br />
of Poett® fraganza was a game changer. It added more usage<br />
occasions at home and anticipated the new trend of indulgence.<br />
On the Stop the Spread of Infection platform, we launched a<br />
holistic campaign that educated consumers and reinforced<br />
the benefits of bleach. We also introduced new products like<br />
specialty cleaners and wipes.<br />
What are the key priorities in the International Division<br />
right now?<br />
We are focusing on four key opportunities. First, building<br />
category development units (CDUs) for home care and bags &<br />
wraps. Second, globalizing the core four functions — Marketing,<br />
Sales, Product Supply and R&D. Third, implementing the<br />
multiyear Project Atlas. In Latin America South, we’re<br />
streamlining processes, cleaning up data and getting people to<br />
support testing and training so that we can access information<br />
that will help us make better business decisions faster. And<br />
fourth, we’re focusing on external growth opportunities that<br />
will develop the business.<br />
With these efforts, we hope to continue expanding our market<br />
leadership to more geographies and make everyday life better,<br />
every day, for people around the world.<br />
12
Corporate Responsibility<br />
Ingredients Inside<br />
Program Expands<br />
To continue leading the industry in product ingredient<br />
transparency, we have expanded our online Ingredients<br />
Inside program. For the past two years, we have listed the<br />
active ingredients of our products. In February, we added the<br />
specific identity of preservatives and dyes, as well as our palette<br />
of fragrance ingredients, in all U.S. and Canadian cleaning,<br />
disinfecting and laundry products. We have also begun the<br />
ongoing process of adding a notice on all product labels<br />
that states: “A list of this product’s ingredients is available at<br />
www.<strong>Clorox</strong>CSR.com.”<br />
$1 Million Gift to Children’s Hospital<br />
& Research Center Oakland<br />
<strong>Clorox</strong> has donated $1 million to Children’s Hospital &<br />
Research Center Oakland to fund research for developing a<br />
vaccine against meningococcal disease, including meningitis<br />
and sepsis. This potentially deadly bacterial infection<br />
affects millions of children and young adults throughout<br />
the world. This gift establishes <strong>The</strong> <strong>Clorox</strong> Endowed Chair<br />
for Immunobiology & Vaccine Development. Funding this<br />
research aligns strategically with our global cause platform<br />
to safeguard family well-being and is intended to help find<br />
a means for eradicating this devastating bacterial infection.<br />
Central America Talks<br />
Sustainability<br />
<strong>The</strong> Central America team recently attended the Al Gore<br />
Costa Rica Sustainability Conference in San José, Costa Rica.<br />
<strong>The</strong> team presented <strong>Clorox</strong>’s recent accomplishments and<br />
commitments in corporate responsibility (CR) to an audience<br />
of more than 500 government, nongovernment and business<br />
attendees. <strong>The</strong> team also met Al Gore and attended a business<br />
leaders sustainability event hosted by Anne Andrew, U.S.<br />
ambassador to Costa Rica.<br />
“It was a great week for <strong>Clorox</strong> in Costa Rica,” said Rodolfo<br />
Artiles, general manager, <strong>Clorox</strong> Central America. “Our<br />
presentation, media interviews and participation in high-level<br />
sustainability events gave us the opportunity to demonstrate<br />
the strides we’ve made as a company and here in Central<br />
America.”<br />
CA’S CR BY THE NUMBERS<br />
• $200,000 investment in a water treatment facility<br />
at San José, Costa Rica, plant to reduce waste.<br />
• 2,800 trees planted in the Tuis River basin.<br />
• 84 percent reduction in water consumption through<br />
technological changes and operational practices at<br />
San José plant.<br />
• 60 percent reduction of materials sent to landfill<br />
since 2007 at San José plant.<br />
• 8 percent reduction in energy usage by improving<br />
processes and replacing old equipment at the San<br />
José plant.<br />
• For three years, the Poett® brand team has helped<br />
low-income women receive mammograms during<br />
Breast Cancer Awareness Month.<br />
• Zero water waste from production of bleach at<br />
our Cartago, Costa Rica, plant thanks to a<br />
closed water loop.<br />
From left to right, <strong>Clorox</strong> employees Rodolfo Artiles, Lorena Echeverría,<br />
Marilyn Pérez, Bill Morrissey, Beth Springer and Esteban González recently<br />
met (center) Al Gore, environmental activist and former vice president of the<br />
U.S., at an environmental conference in Costa Rica.<br />
13
New Products<br />
NEW IN THE U.S.<br />
Green Works ® Naturally Derived<br />
Chlorine-Free Bleach<br />
Fight tough stains on your colored and white<br />
clothes with naturally derived ingredients.<br />
Start-of-ship: January 2011<br />
Green Works ® Naturally Derived<br />
All-Purpose Cleaner<br />
Available in a fresh lemon scent, this naturally<br />
derived cleaner powers through grease, grime<br />
and dirt.<br />
Start-of-ship: May 2011<br />
Green Works ® Naturally Derived<br />
Oxi Stain Remover<br />
Use the power of oxygen to break down tough<br />
stains on laundry and around the house. Plus it<br />
is free of fragrances, chlorine, detergents, dyes<br />
and residues.<br />
Start-of-ship: February 2011<br />
NEW IN ARGENTINA<br />
Ayudín ® Maxima Pureza<br />
Know your clothes are clean with this bleach<br />
that’s undergone an extra fi ltration stage.<br />
Start-of-ship: March 2011<br />
NEW IN CANADA<br />
Glad ® Compostable Bags With<br />
Odour Guard ®<br />
Keep your compost bin fresh with these<br />
new bags that neutralize smells and make<br />
kitchen composting easier.<br />
Start-of-ship: March 2011<br />
NEW IN CHILE<br />
<strong>Clorox</strong> ® CloroGel<br />
Deep clean and disinfect with this easyto-use<br />
cleaning product. Available in two<br />
fragrances: original and fresh mint.<br />
Start-of-ship: March 2011<br />
Fresh Step ® Natural Scoop Multi-Cat<br />
This wood-based litter with powerful odoreliminating<br />
ingredients is the fi rst and only litter<br />
to meet the Natural Products Association home<br />
care standards.<br />
Start-of-ship: March 2011<br />
Fresh Step ® OdorShield ® Scoopable<br />
Cat Litter<br />
A new and improved formula with fragrance<br />
eliminates odors immediately after your cat uses<br />
the litter box.<br />
Start-of-ship: May 2011<br />
NEW IN PUERTO RICO<br />
Hidden Valley ® Original Ranch<br />
Hidden Valley ® Light Original Ranch<br />
K C Masterpiece ® Barbecue Sauce<br />
Original, Hot ’n Spicy, Honey and<br />
Hickory Brown Sugar<br />
Made with wholesome ingredients, Hidden Valley<br />
Ranch dressing and K C Masterpiece sauces offer<br />
the perfect blend of fl avors that make everything<br />
taste better.<br />
Start-of-ship: April 2011<br />
<strong>Clorox</strong> ® Ropa Colores Vivos<br />
Fight stains and keep colors vibrant with<br />
this new, thicker formula and pleasant<br />
fragrance.<br />
Start-of-ship: November 2010<br />
<strong>Clorox</strong> ® Disinfecting Wipes<br />
Clean and disinfect multiple surfaces with<br />
one easy-to-use product with lavender<br />
fragrance.<br />
Start-of-ship: April 2011<br />
NEW IN COSTA RICA<br />
<strong>Clorox</strong> ® Antihongos Pouch Refills<br />
Get refi lls of <strong>Clorox</strong> ® Antihongos mold and<br />
mildew remover in a convenient pouch.<br />
Start-of-ship: April 2011<br />
NEW IN THE MIDDLE EAST<br />
<strong>Clorox</strong> ® Fragrant Disinfectant Cleaner<br />
Keep fl oors clean and disinfected while<br />
leaving behind one of two pleasant<br />
fragrances: rose and pine.<br />
Start-of-ship: January 2011<br />
14
<strong>The</strong> <strong>Clorox</strong> <strong>Company</strong><br />
P.O. Box 24305<br />
Oakland, CA 94623<br />
Forwarding Service Requested<br />
Diamond Drill<br />
Gregory Kent<br />
Willowbrook, Illinois<br />
I invented a low-cost, basement<br />
golf-analysis lab to improve my<br />
practice effi ciency. It includes a<br />
putting mat, lighting, ball-collection<br />
tarps, full-length mirror and video<br />
cameras that connect to golfanalysis<br />
software on my computer.<br />
We’re all inventors.<br />
What have you created?<br />
Chase Davidson<br />
Spring Hill, Kansas<br />
I have created two beautiful girls<br />
and a happy home. I feel this is my<br />
greatest accomplishment, and I<br />
can only hope they feel the same<br />
way when they get older.<br />
Roger Salzman<br />
Chicago, Illinois<br />
I have invented two packing-line<br />
improvements at the Chicago plant.<br />
One is a “pickle sorter,” which<br />
reduces the number of jams to the<br />
case packer when we’re running<br />
96-ounce bottles. <strong>The</strong> other is still<br />
in testing, but it is a tape device for<br />
our case sealer that holds three<br />
rolls of tape rather than just one.<br />
John Hyun<br />
Pleasanton, California<br />
When I was about age 9, I built a<br />
hot air balloon out of a dry cleaning<br />
bag, some string, a couple of<br />
popsicle sticks and a votive candle.<br />
Much to my younger brother’s<br />
delight, the balloon actually fl ew<br />
across our living room. Our parents<br />
never knew about it.<br />
Diamond FOURTH QUARTER 2011 Ideas Wanted <strong>The</strong> e-Commerce Evolution China: <strong>The</strong> Land of Opportunity<br />
Next Up<br />
What social cause has impacted one of your buying decisions?<br />
Post your answers to the Diamond Drill on the <strong>Clorox</strong>Web To Do list by June 3 and qualify for a<br />
chance to win 12 Bravo points (or equivalent for International employees).<br />
Printed with vegetable ink on<br />
100 percent post-consumer<br />
recycled paper.<br />
NI-15599