Colgate Builds Domestic Oral Care With Freshening, Sensitivity Pastes
This article was originally published in The Rose Sheet
Executive Summary
Colgate-Palmolive will introduce Colgate Max Fresh Cool Scrub and Colgate Sensitive SmartFoam with Whitening in the third quarter, firm announces July 24. Launches will build on momentum generated by oral-care entries in the second quarter, when North American sales climbed 5%.
Colgate-Palmolive will launch two new toothpastes in the U.S. in the third quarter that are expected to build upon recent volume and market-share gains, Colgate Senior VP, Investor Relations Bina Thompson suggested during the company's second-quarter earnings call July 25.
The New York-based firm will introduce Colgate Max Fresh Cool Scrub and Colgate Sensitive SmartFoam with Whitening in the third quarter.
Cool Scrub is expected to contribute to the strong position already commanded by the Max Fresh franchise in the fresh-breath toothpaste category, especially among young consumers, said Thompson. “The freshening segment is large and appealing to young consumers, particularly in the 18 through 24 year range,” the exec said.
Max Fresh Cool Scrub contains “micro-scrubbers” to impart a freshness that the user can feel, according to Thompson. The exec explained that “during brushing, bigger silica particles provide a micro scrubbing sensation as [the particles] gradually diminish.”
Cool Scrub packaging will feature the tagline “Destroys bad-breath bacteria from teeth and tongue,” she noted.
The product joins four others in the Max Fresh family – Max Fresh with Germ Fighting Strips, Max Fresh with Mini Breath Strips, Max Fresh with Mini Bright Strips and Max Clean SmartFoam. All contain the range's active ingredient sodium fluoride. The Max Fresh line rolled out in 2004 (Also see "Marketing In Brief" - HBW Insight, 21 Jun, 2004.).
Colgate also plans to extend its foam-enhancing SmartFoam technology from the Max Fresh line to its Colgate Sensitive sensitivity line with the launch of Colgate Sensitive SmartFoam with Whitening.
The toothpaste “builds on the insight that consumers understand that formulas with foaming technology have the capacity to get to hard-to-reach spaces during brushing,” Thompson said.
“Colgate Sensitive SmartFoam provides 30% more foam than our existing Sensitivity toothpaste along with a maximum-strength sensitivity ingredient,” the exec added. “It is also formulated with high-performance cleaning silica to remove surface stains and help keep teeth whiter.”
Thompson noted the launch is “exciting” given that the whitening segment is growing faster than the overall toothpaste category.
Colgate markets two lines of Sensitive toothpaste – Colgate Sensitive and the higher-end Sensitive Pro-Relief. The firm expanded its sensitivity offerings earlier this year with the introduction of Colgate Total Zx-Pro-Shield Plus Sensitivity, a value-priced product (Also see "Colgate Sensitivity, Whitening Pastes Lead “Robust” Q1 Pipeline" - HBW Insight, 4 Feb, 2013.).
Q2 Results Reflect Mouthwash Launch
The U.S. launches will help continue the strong momentum that Colgate achieved in oral care in the second quarter, which saw the introduction of Colgate Total Advanced Pro-Shield mouthwash.
The first mouthwash to debut under the venerable toothpaste line, the mouthwash is promoted as killing 99% of germs and offering 12-hour protection even after eating and drinking (Also see "Colgate Total Mouthwash Debut Makes “Complete Regimen”" - HBW Insight, 29 Apr, 2013.).
Across the country, Colgate promoted the launch with a record number of displays in stores, as well as a strong professional sampling plan in dental offices, with dentists emphasizing the 12-hour protection of the product, according to Thompson.
Within one month of launching the product, the company's share of the mouthwash category grew by five points to reach a total of 8.4%, the exec said.
In a same-day earnings release, Colgate noted that U.S. launches are contributing to volume and market-share growth across categories, with particularly robust growth in whitening.
In toothpaste, the success of Colgate Optic White and Colgate Optic White Dual Action toothpastes helped drive market share for the Colgate Optic White brand to 5.6% year-to-date, up 1 share point versus year ago, the firm reported.
Net sales (excluding pet nutrition) in North America increased 4.8% in the second quarter to reach $762 million, the firm reported. Unit volume in the region increased 6%, and organic sales were up 5%. Operating profit in the region advanced 20% to $227 million, owing to an increase in gross profit and a decrease in selling, general and administrative expenses, the firm said.
Net sales in Latin America decreased 1.3% to $1.28 billion, and operating profit fell 5.6% to $352 million. Sales in Europe/South Pacific dipped about 3% to $824 million, while operating profit climbed 6% to $189 million in the region. Sales and operating profit in Greater Asia/Africa grew 8% to $929 million and $238 million, respectively.
Colgate reported net sales of $4.35 billion for the second quarter, representing an increase of 1.9% compared with the prior-year period. Unfavorable foreign exchange negatively impacted sales by 3%. Global unit volume grew 4%, and organic sales were up 5.5%, the firm says.
Net Q2 income declined 10.5% to $561 million, hampered by $101 million worth of after tax charges associated with the firm's restructuring program.
The impact of the Venezuelan currency devaluation and recent volatility in foreign exchange in other countries has compelled the firm to lower its diluted earnings-per-share growth estimate for the year to 4.5% to 5.5%, down 1 percentage point from previous guidance.