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Fit Rinse’s Losses Confound P&G’s Former Head, A.G. Lafley

Sometimes highly paid speakers give the best value to the audience in ways they never intended. Such was the appearance of A.G. Lafley, the former Chairman & CEO of Procter & Gamble, at the Produce Marketing Association’s “Fresh Summit” event in Orlando.

His speech itself was mostly standard B-school stuff, interesting and useful but hardly earth-shattering. His great contribution to the business world was moving P&G into developing countries just in line with a time when those developing countries became affluent enough to start buying low priced consumer goods, such as toothpaste and detergents. Unfortunately Mr. Lafley did not give a good explanation for how that came about, so we don’t know if he deserves the credit or if it just sort of serendipitously happened on his watch.

Yet if you go to workshops and sessions for a hundred years, you can’t get a more valuable lesson than that Mr. Lafley gave when he began to talk about P&G’s FIT rinse. The product is a wash for consumers to use to clean their produce.

FIT was (and is — since it is now owned by others) a product of some significance. Mr. Lafley spoke about it as if he was highly engaged with it. He acknowledged $60 million in losses on the product. It was also clear he knew nothing about it. Nothing about why it had failed.

We last wrote about FIT, already under new ownership, when they tried to use the spinach crisis as a lever to get consumers to buy the product, although there was and is no evidence that the wash is in any way effective against e. coli 0157:H7.

Back in 1995, Pundit sister publication, PRODUCE BUSINESS, did a cover story on the matter, titled Fit For What?!?

FIT was strongly opposed by many on the supply-side, notable Lorri Nucci (now Koster) and Bruce Obbink at the California Table Grape Commission. Their complaints were that FIT was being marketed in a way that implied that certain products, including broccoli and grapes, required special washes to be safe.

The truth, though, is that FIT failed because produce VPs hated it. They saw it as a giant flag saying that the produce was not safe to eat. Oh, P&G was powerful, probably paying lots of slotting fees to the chains, so the company had to be careful about how it was marketed, but of their actions there would be no doubt.

In the PRODUCE BUSINESS cover story, many retailers were quoted. Read the little section quoting Bob DiPiazza:

Bob DiPiazza, vice president of produce operations at Dominick’s Finer Foods, Northlake, IL, doesn’t take a position on the product. “I don’t have a strong opinion. I haven’t been presented with it. It’s not an issue here.”

But, speculating on what will happen if Fit is introduced in his market — the Chicago area — he says, “If we get requests for the item, we’ll do what we’ve always done and give the customers what they want. That doesn’t mean we have to aggressively merchandise, promote or display it. That’s a choice every marketer can make based on consumer demand. We’re not accustomed to telling customers we won’t get something for them. I may not personally like the inference the product makes, but that doesn’t entitle me to make a choice for our customers.

It is a brilliant quote. One wonders if Bob DiPiazza is a secret fan of the work of Georges Clemenceau, the French journalist and Prime Minister who famously acknowledged that the “voice of the people is the voice of God” and that the task of a leader was to follow that voice “shrewdly.”

For just as Clemenceau packed a lifetime of experience in that word “shrewdly,” so too did Bob DiPiazza pack in a lifetime of gaining mastery of the system in the words: “That doesn’t mean we have to aggressively merchandise, promote or display it.”

Translation: I may have to carry this stuff if you intervene with my bosses or pump up consumer demand with coupons and advertising, but I’m putting out two bottles behind the coconuts. You are going to have to earn every sale.

Yet here was A.G. Lafley, who when he was Chairman and CEO of Procter & Gamble held one of the loftiest perches in corporate America, chattering on about the inexplicable failure of FIT, obviously oblivious to what really happened.

Big business has many, many advantages. There are economies of scale and the ability to demand expertise that others simply couldn’t access. But, as this little story teaches, bigness has disadvantages.

What didn’t A.G. Lafley know what happened? Did someone decide to hide the truth from him? Did someone not want to be the carrier of bad news? Did his direct reports not know? Was it too small to merit the time to get to the bottom of it?

We don’t know, but it is obvious that if Goliath can be that blind, David really does have a chance.

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