Old Spice expands into bar soapBy MAE ANDERSON , Associated Press
Apr. 8, 2013 8:56 AM ET
NEW YORK (AP) — Old Spice is raising the bar, literally.
The aftershave brand, which is known for appealing to more mature men, is introducing a line of scented soap bars this month.
It may seem odd that Procter & Gamble, which has fought in recent years to refashion its 75-year-old Old Spice brand to target younger men, is rolling out something that some people consider antiquated.
After all, not much has changed with bar soap since P&G introduced Ivory soap in 1879. Body wash has eclipsed bar soap sales in 2010, according to research firm Euromonitor International.
Bar soap sales edged up just 1 percent in the U.S. between 2007 and 2012 to $1.62 billion, according to the firm's data. Meanwhile, body wash revenue jumped 30 percent during the same period, to total $2.44 billion.
But Old Spice executives say their interviews with thousands of men each year indicate that bar soap is popular among men. Some say it's what they grew up with, others prefer the "squeaky clean" feeling of bar soap and others just like the fact that it's cheaper than body wash, he said.
"We know that 42 percent of guys use bar soap in the shower, but only 15 percent of bar soap has 'manly' scents," said Jason Partin, Old Spice brand manager.
The rest are odor neutral or have feminine scent, he said, leaving an opening for Old Spice.
The new soaps come in Old Spice's three most popular scents: "Fiji," a summery scent, "Pure Sport," a fresher, clean scent, and "Swagger," which is slightly musky. They're aimed at 25- to 34-year-old men, and will cost $3.99 for a 6-pack and $1.79 for a 2-pack.
To rev up interest, the company is rolling out an ad campaign on Tuesday that includes spots that make fun of jingle-laden soap commercials from the 1980s.
One shows a man showering with the soap in a gym locker room and then cutting open a basketball to reveal a watermelon-like inside. "It's a really weird commercial for soap," the accompanying jingle trills.
Another shows a man showering with the soap and then having the shower following him everywhere — even when he is in the middle of operating on a patient and when he goes out to dinner with a beautiful woman.
"The freshness will follow you all through your day," the jingle states. "This could actually be a fairly serious problem."
Procter & Gamble, the world's largest consumer product maker whose products range from Tide detergent to Crest toothpaste and Gillette razors, has focused on rolling out new products in North America as it lowers costs to boost its bottom line.
Old Spice, with about $564 million in annual sales, according to Bernstein estimates, is not a large P&G brand. That's less than 1 percent of the company's annual revenue of $83.66 billion.
P&G spent $26 million on advertising Old Spice in 2012, less than 1 percent of its overall advertising budget in 2012, according to Kantar Media.
But since a revamp in 2008, it has been successful in rolling out new products with names like "Red Zone" and "High Endurance" and trendy marketing targeting a younger audience that captures young mens' attention with tongue-in-cheek ads featuring actor and former football players Isaiah Mustafa and Terry Crews. Annual sales rose about 33 percent between 2009 and 2012, according to Bernstein revenue estimates.
Bernstein analyst Ali Dibadj said he was surprised Old Spice was offering new products in a slow-growth area like bar soap — but said they must believe they can capture market share quickly in the area.
"What P&G has a tendency to do is if they are successful under one brand banner, to expand that brand in adjacent categories," he said. "They're trying to gain share in a category that has mainly seen growth with niche products like vegetable bars or higher-end type products."