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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

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