Cookie Monster

P & G bites Nabisco

Procter & Gamble Co. of Cincinnati, the household-products giant (1982 sales: $12 billion), approaches every new venture as if it were a military campaign. First comes reconnaissance. Then a few carefully selected sorties. Finally a full-scale assault on the target market.

Signs are now multiplying that the king of disposable diapers and dandruff shampoos is mobilizing for a sweeping offensive on several new fronts in the food business. Within the past four months P & G has introduced its own orange juice in Iowa and Indiana and revealed plans to buy a soft-drink bottling firm in Kentucky. Over the past two weeks, P & G has quietly launched a drive to market yet another tasty product: cookies.

For its initial test marketing, the company sent salesmen to supermarkets in Kansas City with sample bags of cookies bearing P & G's Duncan Hines label. The inaugural flavors are five varieties of chocolate chip—either plain or combined with butterscotch, almonds, mint or peanut butter-fudge. P & G has previously sold Duncan Hines cookie mix, but this is the company's first challenge to Nabisco and Keebler, the leaders in the $2.5 billion-per-year ready-to-munch-cookie industry. In its sales pitches, P & G asserts that it has developed technology to mass produce a cookie that is crispy on the outside, chewy on the inside and tastes more homemade than the bestselling brands.

Hercules Segalas, a senior senior vice president with Drexel Burnham Lambert and Wall Street's leading expert on P & G, is already calling the cookie "a clear winner." He predicts that the product will be available nationwide with in a year and will generate annual sales of perhaps $400 million by 1986.

Many of those cookies may be washed down with P & G soft drinks. In 1980 the Cincinnati company bought the firm that makes Orange Crush and Hires Root Beer, and some industry watchers predicted that it was only a matter of time before P & G came out with a cola drink. Reason: colas account for about 62% of all soft-drink sales, and the conventional wisdom is that a company without a cola cannot make big money in soda pop.

P & G has already begun scouting the cola business. Late last year it announced a deal to buy Coca-Cola Bottling Mideast Inc., an independent company that bottles Coke and other soft drinks in several Kentucky cities. That plan upset executives at Coca-Cola Co. in Atlanta, who fear that P & G will learn the secrets of Coke's success and apply them in selling its own drinks, including perhaps a new cola. Coke quickly got a Georgia state court to issue an order temporarily blocking P & G's purchase, and the case is now before a federal judge in Atlanta.

Meanwhile, P & G is trying to put more fizz into sales of Orange Crush, an old brand that has garnered less than 4% of the soft-drink market. As it has done so often with detergents, the company is introducing a new, improved version of Crush with a more "orangy" taste. P & G is testing a series of TV commercials in which an E.T.-like visitor from outer space called Ozmo comes to earth to pick up a sample of the improved Orange Crush.