Will Ariel’s spoiler steal Persil’s lead?

The soap wars took an unexpected turn this week with the revelation that Procter & Gamble is launching a liquid capsule version of its Ariel detergent three weeks ahead of rival Lever Fabergé’s Persil.

Lever announced the launch of Persil Capsules last week (MW last week), and believed it was stealing a march on P&G. A spokesman boasted the introduction of “another first” – a reference to the successful launch of detergent tablets in 1998.

Lever’s Persil Capsules launch in April, but observers say P&G’s Ariel Liqui-Tabs will pre-empt it by three weeks, appearing on supermarket shelves by March 12. The quick roll-out contrasts with P&G’s historically cautious, plodding approach to new product launches, which is believed to have undermined its world-leading position over the past three years.

Capsules are aimed at users of liquid detergents, offering a unit dose in the same way that tablets offer unit doses for users of powders.

Persil Tablets, launched in 1998, helped Persil overtake Ariel in the laundry detergent market, and are credited with recovering Lever’s position after its mauling in 1995 over the Persil Power fiasco. Persil Power was billed as a “revolutionary cleaning product” that would restore Lever’s fortunes after years of attrition by P&G.

But P&G chief executive Ed Artzt revealed shortly after its launch that Persil Power’s Manganese cleaning agent “accelerator” in fact rotted clothes. Persil Power was eventually axed and Lever took years to recover.

The launch of Persil Tablets finally gave back Persil the lead over Ariel. It took P&G some eight months to respond with its own version, Ariel Discs – a long time in a market where being the first to launch a new development is essential in the battle for market share.

The US company looked slow and cautious, test-marketing products for months on end, a view confirmed by its most senior management, who have spent the past three years restructuring the business to make P&G faster on its feet with launches.

So Lever executives might have been confident that they would again trounce P&G by launching liquid capsules first. But P&G is not lingering this time.

A spokeswoman for Lever said earlier in the week that she would be: “very surprised if our competitors wasn’t working on a product”.

But it must have come as a great surprise to discover P&G will be the first to get its version to market.

P&G marketing director for fabric and homecare Mark Brickhill says Liqui-Tabs are the “next generation of unit doses”. He says P&G wants to be seen as the “innovators of the technology” following its poor reaction to producing a rival to Persil Tablets in 1998, which evidently cost it dear. Brickhill says: “That will never happen again, we will be taking a more aggressive stance.”

Figures produced by The Value Engineers show that Persil Tablets sales are worth &£85.9m, while Ariel Tablets lag behind at &£38.7m.

Both companies claim capsules have the potential to be as much a success as tablets, which make up 27 per cent of the laundry detergent market. A spokeswoman for Lever predicts that Persil Capsules will do for the liquids sector what tablets did for the powder sector.

She says: “Tablets have been a huge success. In just over two years since they launched, the tablets sector now accounts for a quarter of the laundry market. We wouldn’t be surprised if unit dose takes a third share of the liquids sector within two years.”

Brickhill says liquid capsules were invented because of consumer demand for a convenient pre-dosed product, and are not just another gimmick. “People are voting with their feet and are demanding new products. We are giving them what they want,” he says.

“Ariel Liqui-Tabs have received the highest concept test score in the UK laundry market. The major difference is there will be no powder residue left on clothes after a wash. It will be the ultimate cleaning convenience.”

One industry source says: “If P&G manages this it will be a huge coup. P&G has not been doing so well in laundry and it needs something to turn it around. This could be it.”

The Persil brand is way ahead of Ariel. Last year Persil achieved sales worth &£240m, a rise of 0.7 per cent on the previous year. Ariel was worth &£185m, although its sales had increased by 2.7 per cent from the previous year, according to figures from Nielsen.

But P&G is still overall market leader, with its brands – Ariel, Daz and Bold – having a combined market share of 49 per cent, according to the company’s own statistics.

One buyer believes producing yet another new product could have a negative effect on the market.

“I don’t think it will affect customer loyalty. A Persil user is a Persil user and Ariel users stick with Ariel, and we’ll be getting equal numbers of each product. In the end I think it could lead to customer confusion.”

It’s possible that the new capsules could be the latest in a long line of new concepts and innovations that have come and gone as quickly as brand and market leadership. In 1968 Persil Automatic was launched. In 1989 Ariel launched the first concentrated detergent; Persil Liquid followed in 1991; then Ariel Colour in April 1992. Persil Colour followed later that year. The Persil Power fiasco was followed by the success of its tablets launch in 1998. Ariel tablets followed in 1999, the same year as Persil Colour Tablets.

Now the industry waits with bated breath to see which will lead the field in liquid capsules.

But as Martin Christopher, professor of marketing and logistics at the Cranfield School of Management, says: “If you look at the history, no company has kept its leadership position for long. It’s constantly changing hands.”

P&G’s ability to get its liquid capsule to market before Lever will resonate through the company, right back to its headquarters in Cincinatti. It was chairman and chief executive Durk Jager who put in motion the corporate changes aimed at increasing P&G’s speed of innovation – though the abrasive Jager paid the price for his far-reaching reorganisation last year, when he was ousted and replaced by Alan Lafley. If Ariel Liqui-Tabs are a success, Lafley may reap the rewards of the unpopular changes Jager introduced.