Corporate Governance

Business growth is key to post-pandemic recovery

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Loic Tassel
President, Europe, Procter & Gamble
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Corporate Governance

This article is part of: The Davos Agenda
  • The EU is investing billions in COVID-19 recovery plans to build a more resilient, sustainable economy.
  • P&G is committed to European recovery and plans to lead the FMCG industry through innovation, responsible growth and knowledge sharing.

I am a committed European, and despite the current crisis, as we say in French: “L'Europe est une belle opportunité”, and I know it will continue to be a beautiful opportunity, both for businesses and consumers.

Europe is an economic power and has the potential to be an even bigger power in the future. The EU is the second biggest economy in the world by GDP, after the US, and ahead of China in 2019. The region that P&G defines as ‘Europe’—much larger than the EU—equates to a third of the global economy, $30 trillion annual GDP. To us, crisis is a time to protect, serve and support, but also a time for investment in the future.

Have you read?

We are not alone in this. The EU is investing in the post-COVID-19 recovery: €827 billion will be spent on rebuilding Europe in 2021 and €260 billion per year will be invested into the European Green Deal. This is kickstarting the reignition and modernization of the European economy. It is estimated that digitization will contribute up to €2.5 trillion to the European economy in 2025. Europe is also a vibrant business and retail hub. It has world leading research and development, and a strong $100 billion media and marketing industry.

For P&G, Europe is the second most important region after the US with more than 20% of global sales. As a result, we believe that we have all it takes to be optimistic. We believe in Europe and we think that the cooperation—between governments, large manufacturers like us, the retail industry and our consumers—will create sustainable consumption, driving responsible growth that will be the key to recovery.

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What is the World Economic Forum doing to manage emerging risks from COVID-19?

Growth is the key to recovery

We believe that growth is the only possible answer to help lift Europe out of crisis. Growth is possible, and it is needed to mitigate the consequences of the global health crisis, as we will see pressure on economies, the labour market, and our societies. We need new ideas, new jobs and new development to counter confusion, uncertainty and economic downturn. We need growth and optimism to lift our societies out of the current situation.

We know this is possible, because the fast-moving consumer goods (FMCG) industry has done this before: the financial crisis of 2008 showed that while the total economy shrank – FMCG kept growing. The fiscal year 19-20 was one of P&G’s best years. We are in business because our categories are needed every day, as they enable life to continue and be more enjoyable at home.

Fast-moving consumer goods: backbone of the economy

FMCG companies like P&G are the engine of the economy, touching the lives of nearly a billion consumers across Europe and central Asia – directly and indirectly, every day. P&G Europe alone employs 32,000 people, operates 32 manufacturing plants in 15 countries, offering work, education, and stability to whole regions. European FMCG companies combined worth is well over €1 trillion annually and grew by over €75 billion in 2020*.

This industry provides 600 billion units sold every year to European consumers, sold at over 650,000 modern trade stores in Europe. This sector represents over 90,800 manufacturers and covers over 210 product categories, and despite the complications generated by the pandemic, the average category saw 150-200 new items launched per market in 2020, showing the need for products that FMCG (or as I would call it) ‘every-day-goods-companies’ are providing. This industry is a crucial pillar of the European economy and a bedrock of stability.

The industry's responsibility and role in society

The FMGC industry currently helps stabilize European societies, but we are also creating the future. More than 2,000 P&G researchers are inventing products that Europeans will need in a changing world, and hundreds of P&G Brand Builders are inventing the future of FMCG, designed to serve consumers no matter what the context. Everyday products are an important part of everyone’s daily routine, making people feel well and safe, providing products that help them to stay healthy.

In 2021 we have a simple mission: we must make sure that these ‘everyday-products’ are available at any time, and that they are the best for our consumers. Additionally – and this should not be forgotten in COVID times – we must make sure that the lifecycle of these products respect the natural resources of our planet, that they are produced in a responsible way; a way that makes our employees, partners, stakeholders and our world thrive.

A time for reinventing responsible growth

Companies that prospered during the crisis need to act as a lighthouse and help others do business the right way. P&G focusses on five areas, and we are inviting our industry, and our partners, to join us:

1. We will drive sustainable innovation that serves the elevated hygiene and health needs of consumers.

2. We will continue to pioneer digitalization, building capabilities that will benefit our businesses but also our societies at large.

3. We will invest in our people, enabling them to develop a true growth mindset to become more resilient to crises and to invent the future for our consumers.

4. We will continue to pursue and speed up our race to achieve climate neutrality to protect the resources of our planet.

5. We will become an even stronger advocate of equality and inclusion, to make P&G Europe a lighthouse for a society where everyone is included.

Our clear focus on these five elements is precisely why P&G Europe is confident that we will deliver responsible growth in 2020-21, and that this growth will benefit our societies at large. In this process we look for partners to achieve this together, because if there is one thing we have learned throughout the pandemic, it is that we are all in this together, in the happy and bad moments. Only if Europeans collaborate and show solidarity we will be able to make Europe an even more beautiful opportunity for us and for the generations to come.

*Nielsen IQ Retail Intelligence including European Strategic Planner, data ending 27.12.2020.

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