The Procter & Gamble Company (PG): Business Model Canvas [Dec-2025 Updated]

You're looking at one of the world's biggest consumer goods giants, The Procter & Gamble Company, and honestly, their current strategy is a masterclass in disciplined focus amidst market noise. With fiscal year 2025 sales hitting $84.3 billion and a massive restructuring underway to cut up to 7,000 non-manufacturing roles, they are clearly doubling down on product superiority and supply chain efficiency. If you want to see exactly how this powerhouse manages its iconic brands like Tide and Pampers, drives 19% of sales through e-commerce, and structures its costs while maintaining $2.1 billion in R&D investment, dive into the full Business Model Canvas breakdown below.

The Procter & Gamble Company (PG) - Canvas Business Model: Key Partnerships

Global retailers like Walmart and Amazon are central to The Procter & Gamble Company's distribution strategy, especially given that e-commerce sales increased 12% in fiscal year 2025, now accounting for 19% of total Company net sales of $84.3 billion. The focus on retail execution is part of The Procter & Gamble Company's integrated strategy to deliver superiority across channels.

Raw material and packaging suppliers are critical for meeting The Procter & Gamble Company's long-term sustainability commitments. The Procter & Gamble Company has committed to achieving 100% recyclable or reusable packaging by 2030 and reducing the global use of virgin petroleum plastic in packaging by 50% by 2030. Managing the supply base to meet these goals is paramount, as upstream Scope 3 emissions are a major focus area for the Company.

Technology partners are essential for The Procter & Gamble Company's digital transformation. The use of AI-driven insights has been credited with reducing out-of-stock rates by 15%. Furthermore, The Procter & Gamble Company has partnered with institutions like Harvard Business School and Boston Consulting Group to upskill its workforce in emerging technologies. Internally, tools like Project Genie utilize AI to assist over 800 Customer Service Representatives.

Logistics and shipping providers manage the complex global supply chain that supports The Procter & Gamble Company's operations across regions like North America (52% of FY2025 Net Sales) and Europe (22% of FY2025 Net Sales). The Company achieved an Adjusted Free Cash Flow Productivity of 87% in fiscal year 2025, indicating strong operational control over cash conversion, which relies heavily on efficient logistics.

Co-development partners support specific brand initiatives. While details on the Gillette/Lay-Up Youth Basketball effort are specific, the broader CPG industry sees significant investment in data analytics partnerships. For instance, the CPG analytics market is projected to reach $1.22 billion in 2025, with leading brands achieving high returns on investments in areas like ESG compliance, which often involves external partners.

Key Partnership Data Points for The Procter & Gamble Company (PG) and Related Context (FY2025 Data unless noted)

The Procter & Gamble Company relies on a network of specialized partners to execute its strategy, which includes:

• Global retailers for shelf presence and data exchange.
• Raw material and packaging suppliers to meet 2030 sustainability targets.
• Technology firms enabling AI-driven R&D and supply chain visibility.
• Logistics providers supporting global distribution networks.
• Co-development entities for targeted brand innovation and market testing.

The Procter & Gamble Company (PG) - Canvas Business Model: Key Activities

The Procter & Gamble Company (PG) focuses its key activities on innovation, market presence, and operational efficiency to maintain its leading position in consumer goods.

Research and Development (R&D) to drive product superiority.

The Procter & Gamble Company invests heavily to ensure product superiority across its portfolio. For the fiscal year ending June 2025, research and development expenses peaked at $2.1 billion. The latest twelve months ending September 30, 2025, showed R&D expenses of $1.789 billion. This sustained investment supports the innovation pipeline that is critical for growth.

Global brand building and advertising to maintain premium equity.

Maintaining premium equity requires significant marketing muscle. For fiscal year 2025, The Procter & Gamble Company's advertising expense decreased to $9.2 billion. This follows a period where worldwide marketing spend for the year ending June 2024 was roughly $12.7bn. The company's performance in fiscal 2025 saw seven of its ten product categories hold or grow share globally over the past year.

Manufacturing and supply chain optimization for cost savings.

Optimization in manufacturing and the supply chain is a core activity, especially when navigating external pressures. The Procter & Gamble Company generated operating cash flow of $17.8 billion for the fiscal year 2025. This operational strength underpins efforts to mitigate headwinds, such as the estimated pre-tax cost of approximately $800 million after-tax from higher costs related to tariffs in the fiscal 2025 outlook. The company had 109,000 employees globally as of 2025.

Executing the new restructuring plan to cut up to 7,000 non-manufacturing roles.

The Procter & Gamble Company initiated a sweeping restructuring plan in June 2025 to simplify its organization and drive efficiency. This activity targets significant workforce reduction and cost savings.

• Eliminate up to 7,000 non-manufacturing jobs over two years.
• This represents roughly 6% of the total global workforce.
• The cuts account for approximately 15% of the non-manufacturing workforce.
• The plan anticipates incurring pre-tax restructuring charges between $1 billion and $1.6 billion over fiscal years 2025 and 2026.
• The primary objective is to achieve $1.5 billion in annual pre-tax cost savings by 2026.

Disciplined portfolio management (divestitures and acquisitions).

Portfolio management involves strategic pruning and targeted additions to focus resources. For the twelve months ending September 30, 2025, The Procter & Gamble Company reported net acquisitions/divestitures of $-33M. The annual net acquisitions/divestitures for 2025 were $-0.011B. Executives indicated plans to exit some categories, brands, and product forms in individual markets, which could include some brand divestitures.

Finance: draft 13-week cash view by Friday.

The Procter & Gamble Company (PG) - Canvas Business Model: Key Resources

You're looking at the core assets that let The Procter & Gamble Company operate at this scale, which really boils down to intangible power and massive physical infrastructure. Honestly, the brand equity here is the engine; it's what lets them command premium shelf space and pricing power across the globe.

The first, and arguably most valuable, resource is the iconic, globally recognized brand portfolio. These aren't just products; they are daily routines for billions of people. Think about the sheer trust built up over decades.

• Tide
• Pampers
• Gillette
• Crest
• Bounty

This brand strength is buttressed by a deep moat of intellectual property. The Procter & Gamble Company maintains over 24,000 patents globally, which protects the proprietary science behind everything from absorbent core technology to new formulation chemistry. That's a huge barrier to entry for competitors.

When we look at the balance sheet strength that supports all this, the cash generation is key. Here's the quick math on the financial capital generated in the most recent full fiscal year:

What this estimate hides is the capital intensity required to maintain that scale. The Procter & Gamble Company returned over $16 billion of value to shareholders in fiscal 2025 through $9.9 billion in dividend payments and $6.5 billion of share repurchases, marking the 69th consecutive annual dividend increase.

Next up is the physical backbone: the global manufacturing and distribution network. This isn't just factories; it's the complex logistics that ensure a Pampers pack is on a shelf in Des Moines and Dubai within a predictable timeframe. This network is optimized for speed and cost efficiency, which is critical for high-volume consumer staples.

Innovation fuels the future of these brands, so the investment in Research & Development is a non-negotiable resource. For fiscal year 2025, The Procter & Gamble Company dedicated $2.1 billion to R&D. This spend is directed toward maintaining product superiority across their focused categories, like Fabric Care and Oral Care, where organic sales grew in the year.

Finance: draft 13-week cash view by Friday.

The Procter & Gamble Company (PG) - Canvas Business Model: Value Propositions

You're looking at how The Procter & Gamble Company delivers on its promise to consumers. It's all about making sure their daily essentials are simply better than the competition, right across the board.

Irresistible superiority across product, package, communication, and value is the core mantra. This isn't just a nice idea; it shows up in the numbers. For fiscal year 2025, The Procter & Gamble Company posted Net Sales of $84.3B, with Organic Sales Growth coming in at +2%. This growth is fueled by making sure every touchpoint-from the product itself to the box it comes in-feels like a step up. They are focused on delivering this superiority where performance drives brand choice, which is key in daily-use categories.

These are the trusted, daily-use essential products that perform reliably. Think about the categories that saw growth in fiscal 2025: nine out of 10 product categories grew organically. For example, the Health Care segment increased sales by 4%, and Oral Care saw low-single-digit growth. Even in a tough environment, consumers stick with what works, and The Procter & Gamble Company's portfolio of daily essentials keeps them coming back. Honestly, that kind of consistency is hard to beat.

The commitment to sustainability is now a tangible part of the value. They aren't just talking about it; they're investing in it, even if it means navigating complex infrastructure challenges. Here's a quick look at where they stand on packaging goals:

• 80% of consumer packaging designed to be recyclable or reusable as of fiscal year 2024.
• Goal to reach 100% recyclable or reusable packaging by 2030.
• Reduced virgin petroleum plastic by 21% per unit of production since 2017.
• Used 116,000 metric tons of recycled plastic resin in FY23/24.
• The Dawn Powerwash reusable spray trigger constitutes 65% of that product's packaging plastic content.

You see this focus on innovation driving premium products, though it's a mixed bag in the beauty space. Oral-B's advanced power toothbrushes, like the iO models, are definitely pushing the envelope, showing high single-digit growth in their segment. This is what happens when you pair a daily essential with smart features. On the other hand, the Skin Care category dipped mid-single digits in Q2 FY2025, even with strong sales from the super-premium SK-II brand, showing that even premium value needs the right geographic fit. Still, the Grooming segment grew organic sales by 3% in Q3 FY2025, largely thanks to innovation.

The Procter & Gamble Company maintains consistent value and quality across multiple price tiers. They manage this through a focused portfolio. While premium innovation drives growth in areas like Oral-B, the overall strategy is built on daily use categories where performance is the deciding factor. The fact that Personal Care organic sales increased by double digits in Q2 FY2025 shows consumers are trading up where they see clear performance benefits, even while the company manages value tiers effectively.

Here's a snapshot of the financial scale supporting these value propositions for Fiscal Year 2025:

Finance: draft 13-week cash view by Friday.

The Procter & Gamble Company (PG) - Canvas Business Model: Customer Relationships

You're looking at how The Procter & Gamble Company manages its vast customer base, which is a complex mix of massive retail relationships and increasingly direct digital touchpoints. Honestly, for a company this size, the relationship strategy has to be multi-layered to work across their portfolio of daily-use categories.

Automated and transactional for mass-market retail sales

The bulk of The Procter & Gamble Company's interactions remain highly automated and transactional, driven by the sheer volume moving through major retailers. This is the necessary engine for a company that posted net sales of $84.3 billion in fiscal year 2025. The relationship here is about shelf presence, inventory flow, and ensuring the right price point is met at the point of purchase across thousands of stores. It's a relationship built on logistics and scale, not one-to-one personalization for the end user at this level.

Dedicated account management and data sharing with key retailers

To support those mass sales, The Procter & Gamble Company employs dedicated account management teams. These teams work closely with key retail partners-think the largest grocery chains and big-box stores. The goal is to optimize retail execution, which is a key part of their integrated strategy. While specific financial terms of these data-sharing agreements aren't public, the success is visible in their e-commerce performance. E-commerce sales increased 12% in fiscal 2025, now making up 19% of total company sales. This digital growth requires deep, data-driven collaboration with online retail platforms to ensure the right assortment, content, ratings, and search placement are secured.

Direct-to-Consumer (DTC) subscription models for select brands

For select brands, The Procter & Gamble Company is actively building direct relationships, often through subscription offerings. This allows them to control the brand experience and gather valuable consumer insights directly, which is critical in a competitive environment. While the exact revenue percentage from pure subscription DTC is not broken out, the 12% growth in overall e-commerce sales suggests these direct channels are gaining traction. This move is about creating stickiness where brand performance drives choice, moving beyond the retailer intermediary.

Mass-media brand communication and digital engagement

Brand communication is still a massive undertaking, but the execution is evolving. The Procter & Gamble Company maintains a continuous schedule for everyday items, ensuring brand presence year-round, which is a classic continuity media strategy. This is balanced with digital engagement where they are investing heavily in technology. The focus is on superiority across product, package, and brand communication. For instance, in fiscal 2025, nine of ten product categories grew organic sales, which speaks to the effectiveness of their communication in driving brand choice.

Here's a quick look at the scale of their fiscal 2025 performance supporting these relationship efforts:

Loyalty programs and consumer coupons/promotions

To foster deeper, lasting affinity despite selling mostly through intermediaries, The Procter & Gamble Company uses portfolio-based loyalty programs. Their Good Everyday program is a prime example, bringing diverse brands under one unified structure. This allows them to encourage cross-brand purchasing behavior and capture first-party data, which is a major competitive advantage in the CPG space. This shift is about moving from purely transactional rewards to building genuine attachment. Still, traditional promotions remain a tool; for example, they returned over $16 billion of cash to shareholders in fiscal 2025 via dividends and buybacks, showing a commitment to rewarding stakeholders, which mirrors the value proposition to consumers.

You should review the Q1 2026 revenue beat of $22.39 billion next week to see if the momentum in digital engagement is accelerating further. Finance: draft the Q1 2026 customer acquisition cost analysis by Tuesday.

The Procter & Gamble Company (PG) - Canvas Business Model: Channels

You're looking at how The Procter & Gamble Company gets its massive portfolio of daily-use products into the hands of consumers as of late 2025. The distribution network is vast, built on decades of deep retail relationships, so it's not just about shipping; it's about shelf space and execution at the point of sale.

The primary physical channel remains the bedrock, involving mass merchandisers and grocery stores. Honestly, these relationships are complex, and we know from recent commentary that The Procter & Gamble Company is actively managing the incentives within this space. For instance, CEO Jon Moeller noted changes to how grocery stores are compensated, shifting from a model based on total P&G volume to a pay-by-category structure, which definitely changes store behavior.

E-commerce platforms are a significant and growing piece of the puzzle. For fiscal year 2025, e-commerce sales grew 12% and now account for 19% of The Procter & Gamble Company's total sales. With total net sales at $84.3 billion for FY2025, that digital slice represents approximately $16.017 billion in revenue. Key digital partners mentioned include Amazon, Walmart.com, and Costco.

The distribution footprint is heavily weighted toward North America, which is where a lot of that physical and digital retail execution happens. Here's a quick look at the geographic split of net sales for fiscal year 2025:

Beyond the giants, The Procter & Gamble Company still relies on a diverse set of physical outlets. This includes club stores, which are critical for bulk purchases, drug stores for health and beauty items, and specialty beauty stores for premium or targeted brand lines. These channels often carry different product mixes or package sizes than the mass merchandisers.

While the majority of sales flow through third-party retailers, The Procter & Gamble Company maintains Direct-to-Consumer (DTC) websites, typically reserved for niche or premium brands where direct consumer feedback and higher margin capture are prioritized. The scale of this channel is not explicitly broken out in the top-line numbers, but it supports brand building and premiumization efforts.

Finally, there are the Professional channels, such as P&G Professional. This segment targets business-to-business customers-think hotels, restaurants, and commercial laundries-requiring bulk or specialized product formats not sold in consumer retail. This channel supports categories like Fabric Care and Home Care in commercial settings.

To give you a sense of what's moving through these channels, here is the FY2025 sales breakdown by business segment:

• Fabric & Home Care: 36%
• Baby, Feminine & Family Care: 24%
• Beauty: 18%
• Health Care: 14%
• Grooming: 8%

Finance: draft a sensitivity analysis on the impact of a 50 basis point shift in the e-commerce mix for FY2026 by next Tuesday.

The Procter & Gamble Company (PG) - Canvas Business Model: Customer Segments

You're looking at the core of The Procter & Gamble Company's business, which is serving the everyday needs of people globally. Honestly, this is a massive, diverse group, but the company segments them quite clearly for strategic focus.

The fundamental customer base is global consumers of daily-use household, health, and personal care products. The Procter & Gamble Company focuses its portfolio on 10 categories where product performance really drives brand choice, meaning the customer actively compares and selects based on what works best for them. For fiscal year 2025, the company reported total Net Sales of $84.3B.

The geographic focus clearly shows where the bulk of the revenue comes from, which helps you understand where their current operational muscle is concentrated. These are the Focus Markets:

• The North America segment accounted for 52% of Net Sales in fiscal year 2025.
• Europe represented 22% of Net Sales for the same period.

So, North America and Europe together make up 74% of the total sales base. That's a huge concentration in developed markets, but the growth story is definitely elsewhere.

The Enterprise Markets are where The Procter & Gamble Company is actively seeking to increase per capita consumption and capture future growth. These markets include:

These Enterprise Markets collectively represented about 26% of the total sales in fiscal 2025. Latin America, for instance, showed strong organic sales growth of 4% for the year, which is a good indicator of where the company is seeing traction in these growth areas.

The Procter & Gamble Company employs a multi-tier strategy to capture different spending habits within these geographies. They are definitely targeting both ends of the spending spectrum. You see this in their commitment to delivering superior value across every price tier they compete in. This means they serve:

• Value-conscious consumers looking for reliable performance at an accessible price point.
• Premium-seeking consumers who prioritize advanced product superiority and are willing to pay for it.

This strategy is essential for maintaining share; for example, they held or grew share in thirty of their top 50 category/country combinations globally over the past year. Also, e-commerce sales grew 12%, now making up 19% of total company sales, which speaks to a segment of consumers preferring digital channels.

Finally, you can't forget the B2B segment-the large-scale retail and wholesale customers. The strategy explicitly mentions delivering superior value to retailers. These partners, like major grocery chains and big-box stores, are critical gatekeepers to the end consumer. Their segment is targeted through superior retail execution, which is one of the five elements of their 'Superiority' focus area.

The Procter & Gamble Company (PG) - Canvas Business Model: Cost Structure

When you look at The Procter & Gamble Company's cost structure for fiscal year 2025, you see a massive, global operation actively fighting margin pressure from input costs while simultaneously investing in productivity and restructuring.

Raw material and commodity costs (a significant headwind in FY 2025)

Commodity inflation definitely hit the bottom line, even though The Procter & Gamble Company managed to grow core earnings per share by 4% for fiscal year 2025. You saw this pressure reflected in the gross margin, where higher commodity costs alone contributed 40 basis points to the core gross margin decrease in the fourth quarter of fiscal 2025. The company estimated an after-tax commodity cost headwind of approximately $200 million for the full fiscal year 2025. Furthermore, tariffs added significant pressure, with an estimated before-tax impact of around $1 billion, or approximately $800 million after-tax, for fiscal 2025. Honestly, the fact that they delivered growth despite this is a testament to their pricing power.

Selling, General, and Administrative (SG&A) expenses, including advertising spend

The Procter & Gamble Company made real progress on overhead costs. Reported SG&A as a percentage of sales actually declined by 240 basis points versus the prior year for fiscal 2025. This efficiency came from 140 basis points of productivity savings within SG&A as a percentage of net sales. On the advertising front, which is a huge part of SG&A, the spend for fiscal year 2025 was $9.2 billion, which was a 4.2% decrease compared to 2024. Here's the quick math on the key expense lines for the full fiscal year 2025:

What this estimate hides is the reinvestment component, which partially offset productivity savings in SG&A.

Restructuring costs of approximately $1.5 to $2.0 billion over two years (starting June 2025)

You are right to flag the restructuring; The Procter & Gamble Company announced a major portfolio and productivity plan in June 2025. The company incurred total restructuring charges of $1.1 billion for the fiscal year ended June 30, 2025, which included $793 million recorded in Other costs. The new plan announced in June 2025 is projected to incur non-core restructuring costs of approximately $1 to $1.6 billion before-tax over a two-year period. This is separate from the limited market portfolio restructuring completed in the first part of fiscal 2025, which recorded $801 million after tax in incremental charges related to Argentina and Nigeria exits.

Logistics and distribution costs for a global supply chain

While a direct, all-in logistics cost number for FY 2025 isn't readily available, the focus on supply chain optimization is clear. The new productivity plan, which includes supply chain redesign, aims to yield up to $1.5 billion in annual gross productivity savings. This effort involves right-sizing production and leveraging digitization and automation to drive efficiencies and create a more reliable supply network. The company is focused on achieving 98% on-shelf and online availability through these supply chain interventions.

R&D and capital expenditures (capex of $3.77 billion in FY 2025)

Capital investment remained substantial as The Procter & Gamble Company focused on maintaining its asset base and driving future innovation. Capital expenditures (capex) for fiscal year 2025 were reported as $3.77 billion (or $3.773 billion depending on the filing). Net investing activities used $3.8 billion of cash in fiscal 2025, driven primarily by these capital expenditures. The company's operating expense (opex) for the same period was $22.67 Billion. You can see the trend in capital spending:

• Capex in FY 2025: $3.77 Billion
• 5-year low (FY 2021): $2.787 Billion
• 5-year average: $3.22 Billion
• FY 2024 Capex: $3.322 Billion

Finance: draft 13-week cash view by Friday.

The Procter & Gamble Company (PG) - Canvas Business Model: Revenue Streams

The Procter & Gamble Company (PG) generated total net sales of $84.3 billion for the fiscal year 2025. This figure represents net sales being unchanged versus the prior year, with a one percent increase from higher pricing offset by a one percent decrease from unfavorable foreign exchange impacts. Organic sales, which exclude these impacts, increased 2% for the fiscal year.

The primary revenue streams for The Procter & Gamble Company (PG) flow directly from the sales of its consumer product segments. You see the breakdown clearly when looking at the segment performance for fiscal year 2025:

• Fabric Care And Home Care Segment Member accounted for 36% of total fiscal year 2025 sales.
• Baby, Feminine and Family Care Segment Member contributed 24% of total fiscal year 2025 sales.
• Beauty Segment represented 18% of total fiscal year 2025 sales.
• Health Care Segment accounted for 14% of total fiscal year 2025 sales.
• Grooming Segment Member represented 8% of total fiscal year 2025 sales.

Here's the quick math on the dollar amounts for the major segments based on the $84.3 billion in net sales:

The Health Care segment saw low single-digit increases in net sales, while the Grooming, Fabric & Home Care, and Baby, Feminine & Family Care segments were reported as unchanged in net sales for the fiscal year 2025. The Beauty segment experienced a low single-digit decrease in net sales.

Other revenue components, though smaller, are part of the total picture. For instance, one report indicated a Corporate Segment revenue of $794 million for fiscal year 2025, though another internal reporting basis showed $0.00 for that category. What this estimate hides is the specific, separate line item for licensing and royalty income from divested or licensed brands, as the available public filings focus on the five core product segments for the primary revenue breakdown.

The company also returned significant cash to shareowners, which is a use of cash flow but reflects the ultimate goal of these revenue streams. The Procter & Gamble Company returned over $16 billion of value to shareholders in fiscal year 2025 through dividend payments of $9.9 billion and share repurchases of $6.5 billion.

Finance: draft 13-week cash view by Friday.