But the message from large investors is clear: Mr Peltz's questions will not go away. "The bad news is that [Peltz] is right," says Scott Galloway, marketing professor at New York University's Stern School of Business. "The good news is that P&G recognises that."
Since being promoted to chief executive in 2015, Mr Taylor has admitted to the company's mistakes. To jolt stagnating profits, he slashed P&G's brand portfolio from 170 to 65, cut its workforce by 35,000 and pledged an extra $10bn in cost cuts by 2021.
"We can't change the past, but we've learned," he said this week. When frustrated shareholders confronted him about an underperforming share price, he conceded that "we're not saying success, we're saying improvement".
Mr Peltz has hit out at P&G for being slow, closed-minded and too focused on its big brands at a time when shoppers are looking to more distinctive products . Small consumer goods companies, with less than $1bn in annual sales, are growing three times faster than their larger counterparts, he noted when laying out his case. Trian argues that P&G's returns for shareholders during the past 10 years have been less than half for those of its peers due in part to "excessive bureaucracy".
Having previously taken on companies including Wendy's, Mondelez, Heinz and General Electric, Mr Peltz wants to simplify P&G's corporate structure from 10 business units to three. However he stopped short of demanding more extreme measures, like a change of leadership or spin-offs.
Mr Taylor has promised he will listen to Mr Peltz, but he spent at least $35m to keep him out of the boardroom. At times the battle resembled a political campaign, with both sides pouring tens of millions of dollars into pamphlets, automated phone calls and videos imploring shareholders to "vote white" for Trian, or "vote blue" for P&G.
The strategy worked: more than 400 shareholders showed up to the meeting in Cincinnati - nearly double that of previous years, resulting in what Mr Peltz called a "pyrrhic victory" for P&G. Trian drew the "vast majority" of its support from institutional investors, but P&G won over retail investors and employees, who make up an unusually high share of its investors, according to people familiar with the vote. "The retail base was critical," says one person familiar with P&G's plans. "We knew we had to get those people out and vote."
Despite the activist pressure, P&G's situation is far removed from the crisis the company faced in 1999 when spiralling costs forced it to issue three profit warnings and its shares almost halved in the space of three months.
The path to recovery was summed up by AG Lafley, soon after he became chief executive in June 2000: "Lead innovation, build big brands and leverage global scale to create leadership market shares." The recipe worked. During the nine years of Mr Lafley's first tenure, P&G's sales more than doubled, as did its portfolio of billion-dollar brands - from 10 to 22, including Pampers nappies and Tide detergent.
But that central formula of ramping up big brands and distributing them round the world no longer seems to be working. P&G's experience of slow revenue growth is also the industry's. Organic sales growth of the 50 largest consumer companies, including P&G, PepsiCo and Unilever, has fallen from an average of 7.3 per cent in 2011 to minus 0.7 per cent last year, says consultants OC&C.
Consumers have far more choice and often exercise it in favour of smaller, local brands. "Scale was once all-important," says Marcus Bokkerink, senior partner at Boston Consulting Group. "On its own, however, it no longer guarantees competitive advantage."
Millennials, those born between 1980 and 2000, last year overtook baby boomers as the biggest demographic cohort in the US. Unlike most chief executives of large consumer goods companies, they have used the internet all their lives and are swayed more by peer reviews and social media than by traditional advertising. E-commerce has enabled consumers to bypass traditional retailers and buy direct.
"Thirty years ago, you had to surmount two powerful barriers to entry," Mark Schneider, chief executive of Nestlé, the world's biggest food group, told investors last month. "One was getting word out about your product without a massive advertising budget. And the second one was getting listed with one of the key retailers. Because of the digital change, once [new companies] have the product, making it to market has become cheaper and faster."
These "piranha" brands, as consultants AT Kearney has dubbed them, have been taking bites out of the consumer goods mass market growing by up to 20 per cent last year, while the big brands grew at best by 2-3 per cent, it says.
The growth of these piranha brands has led to the fragmentation of the home and personal care market, with P&G and Unilever under pressure from upstarts such as Dollar Shave Club and Harry's in men's grooming and The Honest Company, Seventh Generation and Ecover in household goods.
Unilever has responded by buying up smaller companies. Since 2015, it has made 17 bolt-on acquisitions at a total cost of €7.4bn, according to estimates from Bernstein, including Dollar Shave, Seventh Generation and most recently Carver Korea, a skincare business, adding €1.7bn in sales. Nestlé has also bought smaller companies, such as Blue Bottle Coffee, a California-based chain of artisanal coffee shops.
Mr Peltz has urged P&G to take the same course, but the company has dug its heels in on its formula. Growth "needs to be driven by brands that are superior", Mr Taylor said this week. "What I don't believe makes sense is to pivot away from large brands that consumers trust, that millennials trust."
People close to P&G say it views its big brands as better insulated from consumer whims. "If you're shopping for detergent, you want something that works," says an executive. "Moms don't say: what's the trendy new diaper?"
P&G differs from its peers in structural ways, too. Known for promoting almost solely from within, analysts say the company is more centralised and insular than rivals. "There's a long history of this company being closed to outside points of view," says Ali Dibadj at Bernstein. "And frankly that's what got them in this mess in the first place."
Mr Dibadj says P&G's rigid culture has hurt its ability to respond to changes. "Even if P&G had smaller brands, they would fail, because there is no pride in working on one of these smaller brands in the basement of their buildings . . . it's still really cool to work on Tide."
As part of Mr Taylor's promise to tackle this "culture problem", the company hired about 200 external people last year, up from just 50 in previous years - although the total workforce numbers 95,000. The chief executive has also given more autonomy to its local operations. P&G in the past year has unveiled new products tailored to Chinese consumers, such as a silicone-free shampoo called Rejoice, and a koala-shaped sanitary pad for teenage girls.
Analysts say the 180-year-old company has made progress. Market share losses are narrowing, and P&G is targeting organic sales growth of 2 to 3 per cent this fiscal year. In the year to June 30 the company reported revenues of $65.1bn, up 2 per cent in organic terms. Shares have grown more than 20 per cent since Mr Taylor took over two years ago, keeping pace with the S&P 500.
Mr Peltz may have lost this week, but his attacks have added urgency to the mission, creating a "proverbial win-win" for P&G shareholders, according to analysts from Jefferies. "We see it likely [Peltz] would stick around and continue to make his case . . . Trian's involvement should put a floor under P&G's shares," they said.
"One thing I'm certain of over the next 12 months," says Mr Galloway. "P&G will either have outperformed its peers, or Peltz will have a seat on the board."
Additional reporting by Lindsay Fortado in New York
Copyright The Financial Times Limited 2017
