Managing Main heading and delivering growthofunderheadCore categories<strong>McBride</strong> has identified and prioritised those categorieswithin the European Household and Personal Careconsumer market which will provide the greatestopportunity for profitable growth for <strong>McBride</strong>,its Private Label customers and its shareholders.Within <strong>McBride</strong>’s core business, we consider there to bein the region of 50 Household and Personal Care productcategories, each with different growth dynamics, varyingnot only by region but often demonstrating particularnational characteristics.Future growth dynamics are influenced by a range of factors,including sector maturity, category innovation, demographic andeconomic influences, changing consumer needs and preferences,and often Private Label’s strength within a particular category.Through analysis of the external market dynamics and matchingto <strong>McBride</strong>’s internal competences and capabilities, <strong>McBride</strong>has carefully assessed which of the various categories providethe greatest potential for future growth in our coreWest European markets.In developing and emerging markets, different dynamics prevail.Increasing disposable income, home ownership and increasingknowledge of and concern for hygiene in the home, are drivingthe increasing demand for Household and Personal Care products.The growing presence of multinational retailers in these marketsprovides further impetus for growth and Private Label development.The detailed and comprehensive analysis undertaken as a coreelement of the Project Refresh strategy review, re-confirmed threecore growth categories, characterised by market position, growth,technology and margin potential; namely laundry liquids, machinedishwashing and specialist cleaners. A further four categories wereidentified as providing longer term future growth opportunities,based on broadening of the product range and increasing PrivateLabel penetration. These future growth categories include Skincare,male grooming products, mouthwash and non-aerosol-based airfresheners. The remaining categories, although not demonstratingall the characteristics to be classified as core or future growth,remain important categories for <strong>McBride</strong> either at Group or nationallevel, providing range, breadth and scale for the business.Changing the way we workIntegral to the Project Refresh review was the need to understandhow category management and development within <strong>McBride</strong>could be further enhanced to improve the effectiveness of productdevelopment and increase speed to market. A detailed review of ourways of working identified the opportunity for a more strategicallyco-ordinated approach in a select number of categories prioritisingGroup initiatives, whilst maintaining and managing specific localversus regional opportunities.<strong>McBride</strong> prioritised four categories for its Category and CategoryDevelopment Leadership approach to exploit research anddevelopment and Group-wide insights, providing a solid platformfor growth and to meet customers’ expectations of <strong>McBride</strong>’spassion for delivering value-adding Private Label products.What has been achieved so far by the Category and CategoryDevelopment Leaders is discussed on pages 30 to 37.Growth potential in Core categoriesCore growthLaundryliquidsA large category drivenby taking increasing sharefrom laundry powders andtablets. The category ischaracterised by high levelsof innovation. <strong>McBride</strong> hasa strong and recognisedcapability in concentratedgels and sachets.Future growthMalegroomingThe male grooming markethas been one of the fastestgrowing Personal Caresectors in recent years.This trend is now extendingfrom traditional male showerand shaving products intohigher value segments suchas Skincare. Private Labelsare taking an increasingshare of the malegrooming sector.MachinedishwashingIncreasing dishwasherownership across Europeis a key driver of the growthof the machine dishwashingcategory. Private Label hasestablished positions in manyEuropean markets. <strong>McBride</strong>with its soluble film andtab-in-tab formats is wellpositioned to exploit thegrowth in the category.See pages 30 and 31 > See pages 32 and 33 >MouthwashConsumers of all ages arebecoming increasingly awareof the need for good oralhygiene regimes and theirrelationship to overallpersonal health andwellbeing. The mouthwashsector has benefited fromthis trend and furtherpotential exists in manymarkets across Europeand beyond.SpecialistcleanersConsumers’ increasingawareness of the needfor hygiene in the homeand the targeted cleaningpower of trigger productsare key drivers of the sector’sgrowth. Private Labelprovides a recognised valueproposition with <strong>McBride</strong>combining scale andtechnical competencein the sector.SkincareThe Skincare sector is oneof the largest segments ofthe European Personal Caremarket. Over the lastfive years Skincare hasconsistently been the fastestgrowing Personal Caresector. This high-value sectorhas a small but growingPrivate Label share andwas therefore a naturalextension to <strong>McBride</strong>’sexisting portfolio.Non-aerosolAir careThe main influences on theAir care sector today relateto health, wellbeing and theenvironment. With homefragrances now developinginto home decoration aids,<strong>McBride</strong>, with its productioncapabilities in Europe andChina, is well positionedto take advantage ofthese trends.See pages 36 and 37 > See pages 34 and 35 >Overview Business review Governance Financials Shareholder information28 <strong>McBride</strong> plc Annual Report and Accounts 2011<strong>McBride</strong> plc Annual Report and Accounts 201129
Managing and delivering growthof Core categoriescontinuedLaundry liquids Q&AEuropean laundry detergents by typeWestern Europe 2005-2010US$ Fixed rate 20106,0005,0004,0003,0002,0001,0005,380 5,307 5,2224,9914,741 4,6244,0203,7773,5463,3552,9643,13802005Laundry powdersSource: Euromonitor International.2006 2007 2008 2009 2010Laundry liquidsQ: The laundry liquidsmarket is large, with<strong>McBride</strong> already havinga well-established marketposition. What was yourfirst priority as CategoryLeader and CategoryDevelopment Leader?A: Our first objective was to understandthe market dynamics in each of the countriescovered by the three European divisions.Each market had its own dynamics andthese were mapped to identify both areasof commonality and specific local needs.France, Italy and the UK are <strong>McBride</strong>’s coremarkets, with the German market identifiedas providing significant potential. It was alsoclear that, due to the current dominanceof traditional laundry powder formats inEastern Europe, this region remains a longerterm opportunity for laundry liquidintroduction which will benefit from theconcepts developed in other countries.Nathalie VandenboghaerdeCategory LeaderQ: What were theimmediate actionsfollowing your marketevaluation?A: We now have a clear view of alldevelopment projects both short andmedium-term, managed within a Europeannew product development project list.Immediately, we were able to identify a widenumber of Group projects including laundrysachets, super-concentrated liquids andlaundry gel developments. The remainingprojects tended to be more national innature and therefore managed locally.We aim to ensure the right equilibriumbetween a local and Group approach byescalating interesting local opportunitiesto Group level where necessary, but alsosupporting local initiatives, whilst tryingnot to manage every project.Olivier ChevalierCategory Development LeaderQ: What sort of challengeshave you faced?A: The first challenge was to build a laundryliquids research and development Centreof Excellence in line with the new waysof working. The former research anddevelopment organisation was focusedon supporting both short-term businessneeds and long-term development projectsfor France, Spain, Italy and Benelux. Today’sorganisation also supports the developmentneeds of the UK and German markets.A further challenge was determiningthe balance of priorities; betweenidentifying new products and added valuedevelopments, whilst also delivering valueengineering opportunities across the Group.ActionOur first objective wasto understand the marketdynamics in each of thecountries covered by thethree European divisions.Each market had its owndynamics and these weremapped to identify bothareas of commonality andspecific local needs.Q: What benefits do yousee from the new waysof working?A: It is still early days, but we are nowmanaging the laundry liquid categoryand the related developments at a Grouplevel. With the support of our Categorysponsor and our managers, we have madeconsiderable progress to change our waysof working, taking a Group-wide approachand removing potential barriers. Resultingfrom this new approach, we have beensuccessful in presenting a competitivelaundry liquid offer to new potentialcustomers in Europe and are optimisticfor a positive outcome from thesediscussions. An encouraging start!ResultImmediately, we were ableto identify a number ofGroup projects includinglaundry sachets, superconcentratedliquids andlaundry gel developments.Being the best at what we doOverview Business review Governance Financials Shareholder information30 <strong>McBride</strong> plc Annual Report and Accounts 2011 <strong>McBride</strong> plc Annual Report and Accounts 2011 31
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