Colgate Harvests Volume And Premium Sales Growth In Developing Regions

After consumers in developing markets, where poor oral care practices are prevalent in some regions, start brushing with Colgate toothpastes or using its other oral care products, the firm encourages them to move up to premium products.

Colgate-Palmolive Co.’s business chief for Latin America, Asia-Pacific, Africa, Europe and the Middle East sees “very significant” opportunities to grow health and personal care product sales in developing markets while also encouraging consumers in those regions to move up to higher-priced products.

During the recent Morgan Stanley Global Consumer Conference, Panagiotis Tsourapas noted Colgate’s core oral care business as having “significant potential both in terms of per capita consumption and in terms of premiumization” in developing markets.

Increasing per-capita consumption in developing markets is a growth driver for oral care product providers because “there are still hundreds of millions of people around the world that they don’t brush their teeth twice a day. They don’t even brush their teeth once a day for many reasons,” said Tsourapas, group president of Colgate-Latin America, Asia-Pacific and Africa/Eurasia.

colgate executive Panagiotis Tsourapas: oral care sales have “significant potential both in terms of per capita consumption and in terms of premiumization” in developing markets.

And once consumers start brushing with Colgate toothpastes or using its other oral care products, the firm presents them with trade-up opportunities.

“We are very well-positioned with our initiatives, with our product offerings, with our distribution and availability to capture” more consumers with basic products and steer them toward premium offerings, Tsourapas added at the conference conducted online on 2 December.

To show how Colgate encourages trade-up, he referenced Latin America – a region representing 20% of its business where it was successful in a premiumization drive behind its oral care and skin care products over the past year.

With its latest quarterly results, Colgate announced it had launched naturals and whitening toothpaste line extensions in Latin America, comprising mostly the Colgate and Sorriso brands, while expanding its Protex skin care brand with a flax seed oil formula and a face care product that helped drive sales.

Despite strong sales of oral care and skin care products in the region, however, sales in Latin America declined 5% to $837m in the third quarter, due to the negative impact of currency devaluation, Colgate reported in October.

Colgate has a solid market share position in Latin American countries. In Mexico, it’s toothpaste market share is above 80%, unchanged even after its biggest competitor launched a second brand into the market last year. The firm maintained its market share despite significant price increases it took behind its products in the second quarter due to currency devaluation.

In Asia-Pacific, Colgate’s sales during the July-September period increased 4.5% to $722m and 2.5% to $722m in Africa/Eurasia.