New Chapter maintains culture within P&G fold

By Hank Schultz

- Last updated on GMT

New Chapter maintains culture within P&G fold

Related tags: New chapter, Subsidiary

Proctor & Gamble’s acquisition of  whole food supplement manufacturer New Chapter had many in the natural products business wondering if yet another iconic brand would disappear within the insatiable maw of a big CPG company, rarely to be heard from again.

The early evidence is promising.  P&G appears to be making good on its stated intent to uphold New Chapter’s independence and culture.

“We are really concerned in preserving the growth at New Chapter. We bought New Chapter because of their success in their current channels and their great brands and great products and their great consumer ratings,”​ Elizabeth Ming, external relations manager at P&G told NutraIngredients-USA.

P&G has maintained New Chapter’s product line and hasn’t used the brands, at least so far, as platforms to launch other P&G products.

“We want to really preserve that piece of the business,” ​Ming said.

Culture continues

Graham Rigby, vice president of innovation and marketing at New Chapter, echoes those sentiments. Rigby has the perspective of several years’ tenure with New Chapter before the acquisition, and he says he likes what he sees so far.

“What’s been refreshing for me is that P&G prerogative was to add resources and technology and talents in areas that could further New Chapter’s mission,”​ he said.

“I think they are committed to New Chapter principles, whether it is investing in quality or on New Chapter’s support of Prop 37. I think there is not a disruption of what makes New Chapter New Chapter.”

Others in industry share this optimistic outlook. Steve Hoffman, a longtime marketing and communications consultant based in Colorado who has worked with New Chapter since the acquisition on a sustainability issue and the company’s Prop 37 stance had this to say:

“They did get a lot of flak in the beginning and I was one of the critics. So far I can tell you that they have been very responsive to sustainability initiatives and to the consumers’ right to know initiative, unlike many other wholly owned subsidiaries. Unlike just about 99 percent of them.”

P&G adds capabilities

Ming said P&G brought more than just money to the table. P&G’s long history with a diverse range of consumer brands gives it unique capabilities, she said.

“Our approach has really been to go into and turbocharge in the areas where P&G is strong and where there is a place for our capabilities to really help New Chapter. And in other areas to really leave them autonomous and do what they have been doing,”​ she said.

“P&G is a marketing company. We think we have a lot of consumer understanding capability to bring to New Chapter. That’s really our strength and that’s why New Chapter agreed to allow us to acquire their company.”

But the extra financial muscle doesn’t hurt, Rigby said.  New Chapter struggled, as do many smaller to mid-sized independent companies, to come up the capital to invest in science and innovation.

“I’ve certainly seen evidence of additional incremental resources to invest in New Chapter’s mission. That was not something we had as an independent company,”​ he said.

“We didn’t have the ability to invest for the long term, within reason, because we were meeting financial covenants. But as part of a larger outfit, management can make decisions to invest in businesses and it’s clear they are doing that with New Chapter.”

International expansion

And, Rigby said, working with P&G means New Chapter will have the opportunity to reach consumers outside of its familiar natural products sales channels.

“When we were in negotiation with P&G we thought there is lots of room to grow within our existing channel.  But an independent company with a certain capital structure could only scratch the surface of the international arena and obviously P&G does have much broader resources there,”​ he said.

“It’s hard to flip a switch within six months and say we are in many countries. But there certainly has been a strategy laid down to further that international expansion.”

Ming said there was skepticism among some P&G employees when the New Chapter deal was announced. Why are we buying a company that makes that stuff, the thinking went. Does any of that stuff really work?

“I don’t think you can really understand until you dive deep with their founders and their scientists and the whole New Chapter operation,”​ she said. “As soon as you learn about the products you are enthusiastic about them and you are an automatic advocate.”

Now that some of the dust has settled, Rigby said, it might be easier for the natural products community to take a sober look at what the P&G acquisition has meant for New Chapter.

“Actions speak louder than words. There definitely has been that cooling off period.  Look at New Chapter, at our mission, at our actions and judge us accordingly,”​ he said.

Related topics: Manufacturers

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