How many hours a week do you spend on treasury today that you wouldn’t have been spending a year ago and what specifically are you doing in that extra time? I’m probably spending between a half a day and a day extra versus the past.
I’m talking with the treasurer on what his funding plans are. I’m reviewing and meeting with banks to work on a relationship with them. Just last week, I went over to J.P. Morgan and we had Morgan Stanley come in. I probably had four or five meetings last week with banks and providers of financing that I wouldn’t have been involved with in normal times, hearing new ideas from them and getting their views on whether we should or shouldn’t issue in pounds, issue in euros, issue in dollars.
How involved do you get in advertising, marketing, or budget discussions-discussions that move beyond approval of the overall spending number?
I get involved at the level of what and how much, but not where and for what. I can speak with some authority about the level of spend and the effectiveness relative to the cost of media. But those are made country by country, and they’re made by specialists.
Do you think that as a consumer-products company you’re in the best position to know when the economy may be turning around? Your products are less discretionary items than autos are, for example.
In the food business you may not see much impact at all, because people have to eat. They may trade down on price points, and you may see private labels doing better. There’s a little more discretion in personal care items: you don’t have to buy the more expensive personal care stuff.
But once they’ve decided to use a deodorant, people are going to stay with it. Now there are two other phenomena that can affect this. One is shelf de-stocking, which means that retailers decide that they’re not going to buy as much stuff and let the inventory they have in the warehouse run down. You see this with retailers at the end of the fiscal year every year. We think we may have seen it last fall.
Then there’s pantry de-stocking. If you look in my shower, which I share with my wife, you will see maybe ten or fifteen different shampoo bottles. We don’t necessarily need to replace a bottle of shampoo when it runs out. I could de-stock the pantry by using my wife’s shampoo. That kind of de-stocking makes it harder to know whether our sales are reflecting the general economy.