Tide Pods: A new product is born
It took eight years, 450 product sketches, 6,000 consumer tests and hundreds of millions of dollars for Procter & Gamble to create something that it hopes will be destroyed in the wash.
Tide Pods are palm-size, liquid-detergent-filled tablets that are designed to be tossed in the washer to take the measuring cups — and messiness — out of laundry. P&G says the product, which hit store shelves last month, is its biggest innovation in laundry in about a quarter of a century.
Tide Pods aren’t the sexiest of inventions, but they illustrate how mature companies that are looking for growth often have to tweak things as mundane as soap and detergent.
The story behind Tide Pods provides a window into the time, money and brainpower that goes into doing that.
P&G, the maker of everything from Pampers diapers to Pantene shampoo, has built its 175-year history on creating things people need and then improving them. (Think: Ivory soap in 1879; Swiffer Sweeper in 1999.) Each year, the company spends $2 billion on research and development and rolls out about 27 products worldwide — more than two a month.
That focus on innovation has paid off. P&G says 98 percent of American households have at least one of its products in their cupboards, broom closets or bathrooms.
And though about 20 percent of all new products succeed, P&G has claimed a 50 percent success rate. Four of the top 10 new consumer products in 2010 were made by P&G, according to research firm SymphonyIRI.
“What they’ve gotten very good at is being able to understand consumer expectations,” says Robert Passikoff, president of Brand Keys Inc., a New York customer research firm.
But improving things such as window cleaner and toilet paper can take years. It also can cost hundreds of millions of dollars — or up to 100 percent of first-year sales — to develop, make and market them. And even then, new products are a tough sell to consumers.
“You have to develop a product that is meaningfully better than the ones out there, which is tough because generally speaking consumer products work pretty well,” says Ali Dibadj, an analyst at Bernstein Research who follows P&G. “You then have to convince the consumer to try the product ... and then get that consumer to break their old habit to make a new one.”
The laundry detergent industry, with $6.5 billion in annual sales, is always looking for the next big thing.
Over the years, fruity scents were introduced, along with suds that work in cold water. There also were concentrated and super-concentrated detergents that need less packaging.
P&G set about creating a product that weighed less, cleaned better and could be used with any washing machine, any size load and in water at any temperature.
Scientists had to figure out how to combine cleansers, brighteners and fabric softeners into one product, while keeping them separate until the pod dissolves in the wash.
Doing so would ensure each liquid would work better. After 450 sketches and iterations, P&G developed a proprietary technology that sections the pod into three chambers for all three liquids.
The result? A soft ball with three separate bubbles filled with liquids in Tide’s trademark white, blue and orange colors.
P&G says it is expecting Tide Pods to ring up $300 million in sales during its first year.