2017 Integrated Annual Report

GRI

Consumers

You, our consumers, inspire us to constantly look for ways to make our brands better.

Building our brands around you, the consumer, is nothing new for Clorox.

Lately, we’ve looked to technology to help accelerate brand growth. Through e-commerce, sense-and-respond marketing and insights gained through improved data, we’ve made progress. But the playing field has changed, as have your expectations. So we have, too.

More than ever, your needs are at the center of what we do. Through a consumer experience that addresses what’s important to you — reimagined and reinvented through the use of data and technology — our aim is to build deeper, longer-term connections between you and our brands.

Consumer

Connecting you to your needs and what you value.

Brand

Solving a consumer need through not only the function of a product, but also by delivering a superior consumer experience.

Plotting the Journey

Insights

Determining consumer needs, identifying consumer profiles and mapping how we would connect consumers to their needs.

Planning

Identifying pain points and opportunities, prioritizing and sequencing activities.

Design

Reimagining the consumer experience, capabilities and organization.

Measure

Evaluating early performance to determine whether we’ve been successful at meeting consumers’ needs.

Supported by

Data and Technology

Allowing us to reimagine and reinvent the creation and delivery of experiences beyond advertising and our product, providing targeted, personalized, real-time interactions to consumers.

Clorox People

Uniting around common and easily understood objectives of helping consumers, tied to the brand purpose.

Communities

You, the people in our communities, inspire our company to give back, doing well while also doing good.

2.1 Billion

people worldwide don’t have access to safely managed drinking water*

Health and wellness has been central to our mission since the founding of our company more than a hundred years ago. It all started with our namesake bleach, with disinfecting properties that kill germs that can cause infections and other health threats. Over time, our portfolio has expanded to include other products that support health and wellness, such as our Brita® filters and pitchers, Burt’s Bees® personal care and beauty lines, and RenewLife® digestive health aids.

This legacy has made us a natural fit to support clean water and sanitation efforts — one of 17 global goals for sustainable development the United Nations is seeking to achieve by 2030. The Clorox Safe Water Project and Brita Canada’s Filter for Good campaign are two initiatives that seek to address a problem that is a leading cause of illness, malnutrition and even death among children in developing countries.

*“Progress on Drinking Water, Sanitation and Hygiene: 2017 Update and SDG Baselines,” World Health Organization and United Nations Children’s Fund (UNICEF).

Bleach dispensers provide safe drinking water in Peru

About 16 million people in Peru don’t have access to safely managed drinking water*. Through the use of bleach dispensers — a low-cost, sustainable way to treat and disinfect water — our Clorox Safe Water Project, launched in 2012, is providing drinkable water to 21 rural communities in the Piura-Tambogrande region of northern Peru. The project also has supported education to help families understand the connection between invisible germs in their water and illness.

0

liters of water purified every day

0+

Peruvians served every year

0M+

liters of safe water every year

Employees

You, our employees, create a successful workplace and drive good growth.

Clorox employees strive to create an environment where everyone feels a sense of belonging — respecting, valuing, supporting and recognizing each other as much for their uniqueness as for those things they have in common. They know this enables everyone to do their best work and positions us for growth.

0%

Employee Engagement (+8% vs. Peer Companies, +3% vs. High-Performing Companies)

Seeking good ideas from everyone

Regardless of position, role or background, employees are encouraged to share their points of view and insights. More importantly, their perspectives are heard. One measure of their satisfaction is our employee engagement score, which is higher than that of our peers and among the best of the highest-performing global companies.

All in on innovation

Initiatives spearheaded by employees have generated creative ideas from all corners. Innovent, our internal ideas contest, allows anyone to be an “intrapreneur.” An inaugural hackathon used technology tools to bring together a diverse group of employees to brainstorm new ways to expand direct-to-consumer sales. And employee resource groups — one of our original sources of business ideas grounded in cultural and multigenerational insights — continue to contribute to our innovation pipeline.

0

Employee Volunteer Hours in CY 2016

The GIFT of giving

Our people love to give back to our communities. In the 2016 calendar year, almost half of eligible employees participated in GIFT, the company’s charitable giving program, contributing nearly $5 million to more than 3,500 nonprofits — well above typical involvement at similar company programs.1 They also volunteered more than 115,000 hours of their time — demonstrating that they live our company value of “doing the right thing.”

Through an inclusive approach to work, our employees inspire us, and each other, to draw on the contributions of individuals and teams to help achieve a higher collective purpose — both for our business and for society as a whole.

1 The median employee participation rate for matching gift programs is 7 percent. Source: CECP Giving in Numbers Report: 2016 Edition

Almost half of all eligible Clorox employees participate in our charitable giving program, and they give generously of their time to volunteer in our communities.

At Clorox, we strive to create an inclusive workplace, which enables everyone to do their best work and positions us for growth.

Employees drive various initiatives to generate new product and commercial innovation ideas from throughout the organization.

Innovation Q&A

A Conversation About How
It Happens

Innovation takes many forms at Clorox — from developing a product that becomes a household name to advertising that creates buzz to an in-store display that grabs attention. Here are perspectives on how we’ve been evolving to meet consumers’ changing needs from four senior leaders who help shepherd innovation throughout our organization: Chief Innovation Officer Denise Garner, Chief Customer Officer Matt Laszlo, Chief Marketing Officer Eric Reynolds and Chief Information Officer Manjit Singh.

Left to right:

Manjit Singh, Senior Vice President and
Chief Information Officer

Eric Reynolds, Senior Vice President and
Chief Marketing Officer

Matt Laszlo, Senior Vice President and
Chief Customer Officer

Denise Garner, Senior Vice President and
Chief Innovation Officer

How does the consumer inspire Clorox innovation?

Denise Garner | In R&D the consumer is our muse. We pay attention to what consumers tell us they want in a product as well as observe their pain points to identify unarticulated needs that present opportunities to innovate and delight. Consider the new Brita® Stream™ pitcher. Millennials wanted a high-capacity pitcher that was streamlined enough to fit inside the refrigerator door, delivered fast filtration “on demand” and allowed them to add ice to the pitcher. Their feedback inspired us to reinvent our filtration technology and pitcher design.

Manjit Singh | Consumers' embrace of technologies such as voice integration and in-home smart speakers has us asking how we can leverage them to make products even more practical, effective and easier to use. The Brita® Infinity pitcher, Clorox's first “internet of things” product, is an example of how IT partners with other groups inside Clorox to deliver a superior consumer experience, while we're using our voice integration skills to improve consumers' experiences with our products in their homes.

How has Clorox innovation made a difference for our retail customers?

Matt Laszlo | It starts with putting the consumer first. Being able to meet consumer needs through innovation makes us an extremely valuable, effective partner to our retailers. We know that, for many consumers, scent can make a mundane experience more enjoyable. That approach has helped Clorox® Scentiva® cleaners get off to a good start with strong retailer support.

How has your approach to innovation changed?

Matt Laszlo | We’re thinking about innovation more broadly than ever before. Not only are we developing new products, but we’re also expanding our existing products to new spaces, places and faces — for instance, by placing Clorox® disinfecting wipes in the pharmacy section. Why is this important? Because consumers don’t make all of their purchases in one place anymore — or even two or three places. So we need to always look beyond traditional roles and rules to continue growing our business.

Denise Garner | We’ve enhanced our innovation processes from end to end so we can create bigger, more sustainable ideas while moving at a faster pace — and minimize needed resources and costs in the process. This positions us to meet ever-changing consumer and retailer needs much more effectively. And it gives us a much better chance of being first to market with an innovation. We’re already seeing results with a stronger innovation pipeline.

What does the next phase of innovation look like at Clorox?

Eric Reynolds | It’s about creating a seamless consumer experience. That means unlocking what motivates someone to purchase our products and bring them home.

Take the Brita® Infinity pitcher. It’s not just a pitcher. It connects to the internet and can reorder filters. For all our brands, we need to bring together the physical and digital experience — because people want an experience rather than just products.

Matt Laszlo | We’ve got to be more and more digitally enabled. That could mean the product itself, the packaging or the online content, which educates, influences and tells the consumer a story.

For example, do you get a push notification from Hidden Valley® ranch suggesting a recipe to try when you’re walking down the dressings aisle? Or can we create packaging with more information on it for shoppers to engage with via their smartphones? More and more, our retailers want to play in the online world, even for the in-store experience. Our innovation needs to address the consumer desire for more education and interaction with our products.

Manjit Singh | It’s going to be all about speed. With IT involved from the start, we’ll be able to embed technology into our processes as well as our products to meet consumers’ ever-evolving needs.

In a crowded media landscape, how does innovation strengthen your marketing efforts?

Eric Reynolds | The challenge for us is not the media landscape; it’s all the information and noise the average person gets today.

To penetrate through with clear product ideas and messages, we need to innovate everywhere, including media, because communication is a big piece of what we’re trying to do.

One area where we’re doing this is media planning. What’s worked well for decades — TV, print, digital — has started to fall. As media consumption continues to shift and fragment across multiple channels and environments, gaining consumers’ attention is challenging. There are too many messages and channels, and we need to break through this clutter. So we’re changing the way we approach the question. We’re trying to slide into their day-to-day lives at just the right moment with a piece of information they’re open to receiving at that particular time.

How do you nurture the spirit of innovation?

Denise Garner | We need to stay close to emerging trends with a laser focus on our consumer, our categories and our competition as well as on the retail environment and overall global trends.

Then it is all about nurturing a sense of bold curiosity in our culture. Curiosity can help unlock insights about our consumers and technology, which can serve as the foundation for innovation breakthroughs, whether it’s adapting the technology or discovering a new consumer need that helps us focus our product development efforts.

Manjit Singh | Our curiosity has led us to establish relationships with organizations such as research boards, venture capital groups and investment firms, which expose us to early-stage innovations that can inspire new ideas and further improve our speed to market. We encourage our employees to tap these relationships to learn more about technology advances that will allow us to discover innovative ways to solve consumer needs.

Products

How we make innovation work for you.

Innovation is the lifeblood of any consumer products company. The more attuned we are to you, our consumers, and your changing world, the better we can provide you with products that make everyday life better, every day. Helping people thrive — to live healthier, more satisfying lives — makes our brands essential. In our 2017 fiscal year, we introduced a host of new products across all our brands and businesses. Each one is driven by insights into real people’s wants and needs as tastes and times change.

Clorox Scentiva

The new Clorox® Scentiva® disinfecting wipes and sprays provide consumers with experiential fragrances while they clean their homes and give us a new platform for growth that appeals to millennials and Hispanics.

Hidden Valley Simply Ranch

To satisfy consumers’ appetites for better-for-you food products, we introduced Hidden Valley® Simply Ranch® dressing that delivers amazing ranch taste with no artificial preservatives, flavors or colors.

Clorox Healthcare Fuzion

The new Clorox Healthcare® Fuzion® cleaner disinfectant offers the healthcare industry a disinfecting solution with the power of bleach, providing the fastest kill time available against potentially life-threatening microorganisms like C. difficile spores, while leaving behind minimal odor or residue without damaging common surfaces

Kingsford Long-Burning Briquets

Kingsford® long-burning briquets were introduced to capitalize on the growing interest in smoking and low-and-slow cooking. The product burns 25 percent longer, making pitmaster favorites like brisket and pulled pork easier for any backyard griller.

Brita Stream Pitcher and Brita LongLast Filter

The new Brita® Stream™ pitcher with filter-as-you-pour technology fills quickly and pours immediately so consumers don’t need to wait for filtered water, while the new Brita LongLast® filter, which lasts three times longer than our legacy filter and removes lead, can be used with existing pitchers.

Burt’s Bees Strawberry Lip Balm and Tinted Lip Oils

Our 100 percent natural moisturizing lip care line expanded further with the addition of Burt’s Bees® strawberry lip balm, a mainstream flavor that’s attractive to a broad range of consumers. Our Burt’s Bees® tinted lip oils exceeded retail sales projections in their FY17 launch year, driven by an integrated marketing campaign that leveraged digital platforms novel for the brand, and also resulted in media coverage by fashion and beauty publications.

Inspiration

Consumers

You Inspire Us to
Make Everyday
Life Better,
Every Day

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Communities

Inspired by
Our Communities

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Employees

Inspired by
Our Employees

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Innovation Q&A

Inspired By You:
Innovating on Innovation

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Products

How we make innovation
work for you.

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