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Colgate’s strategy for evolving oral care market: driving premiumisation while growing the core, says M S Jacob

Colgate’s strategy for evolving oral care market: driving premiumisation while growing the core, says M S Jacob



The oral care market is growing in India but oral health awareness and practices are alarmingly low. Colgate-Palmolive (India), which reported a 10% year-on-year growth in top line revenue in Q2, says that it is committed to improving this situation.

In an interaction with ET Digital, M S Jacob, Whole-time Director and Chief Financial Officer, Colgate-Palmolive (India) Limited (CPIL), says the company remains cognizant of the market conditions, including fluctuating consumer demand, heightened competition, and rising raw material costs. Edited excerpts:

The Economic Times (ET): How is India’s oral care market placed?
Jacob MS (JMS): The oral care market in India is growing, driven by increased awareness of dental hygiene and a focus on preventive healthcare. However, oral health remains a low priority. Awareness of oral health practices is alarmingly low: with 80% of urban Indians not brushing at night, and 55% of rural India not brushing daily, according to Kantar’s household panel data.

As the leaders in the segment in India, we are committed to addressing these challenges through targeted initiatives that educate communities about oral hygiene, promote quality products, and provide resources and training to local health workers, ultimately enhancing oral health standards and empowering individuals to make informed choices for their dental care.

ET: Colgate-Palmolive (India) reported an YoY jump in its net profit for the second quarter ended September 2024 on the back of highest-ever quarterly revenue. But the company mentioned in its regulatory filing that it expects continued difficult market conditions. Please elaborate?
JMS: We have seen a robust performance in the second quarter, achieving a significant 10% year-on-year growth in top line revenue, driven by broad-based momentum across our portfolio. Our core brands contributed to a high-single-digit volume growth in toothpaste, while our net profit increase of 16.2% reflects our strategic investments in brand and category development. However, we remain cognizant of the market conditions, including fluctuating consumer demand, heightened competition and rising raw material costs. These challenges require us to be agile and responsive in our strategies. Nevertheless, our strong financial position enables us to maintain focus on innovation and investment in marketing initiatives, ensuring we deliver exceptional value to consumers.ET: How do you see innovation contributing to Colgate’s product portfolio, and what are your expectations about consumer adoption in this segment?
JMS:
Innovation is at the core of Colgate-Palmolive’s strategy, and our recent launches are poised to significantly enhance our product portfolio and drive growth. The Colgate Visible White Purple, which we introduced recently, has received an excellent early response and reflects our commitment to addressing evolving consumer needs. Our communication efforts for Colgate Total highlight its role in providing superior everyday protection and aligning with our premiumisation strategy.

With consumers increasingly concerned about oral health, we anticipate Colgate Total will become a preferred choice in the marketplace. In addition, the rise of snacking culture has led to greater calcium loss, and Colgate Strong Teeth addresses this issue, as effectively communicated in the campaign, with a formula enriched with arginine and calcium, reinforcing our dedication to holistic oral care.

ET: What is your strategy amid the fast-evolving consumer preferences and competitive pressures in the oral care market?
JMS
: Our strategy in this fast-evolving oral care market is rooted in driving premiumisation while growing the core, as we see a strong and growing consumer base in India that values high-quality products and is willing to invest in their oral health. We are focusing on meeting these consumer expectations by offering innovative, science-backed solutions that align with their desire for premium and differentiated oral care.

To stay competitive, we are not only investing in product innovation but also expanding our reach through multiple channels, including digital platforms and retail spaces, to connect with consumers at every touchpoint.

ET: What role do you see sustainability and social responsibility initiatives playing in shaping the company’s long-term strategy and consumer engagement?
JMS:
Our purpose of ‘reimagining a healthier future’ guides us through the complexities of sustainability, allowing us to seize opportunities that create a positive impact across our organisation and communities.

Further, for us, sustainability and social responsibility are integral to our long-term strategy, guiding our efforts to protect natural resources, reduce waste, and engage meaningfully with our consumers. Water conservation is a central focus, with three out of our four industrial sites now operating at net zero water levels — a milestone in our commitment to efficient resource management. We are also dedicated to reducing plastic waste, having achieved 83% reusable, recyclable or compostable packaging. 50% of our toothpaste tubes are in recyclable packaging using the technology developed by Colgate and we are on track to exit FY 2024-25 with 100% recyclability.

These kinds of initiatives reflect how our environmental, social and governance (ESG) framework is crucial for integrating sustainable practices into everything we do.

ET: What are your key priorities for maintaining profitability while navigating external challenges such as inflation, supply chain issues, and shifts in consumer behaviour?
JMS
: Delivering sustainable profitable growth continues to be the cornerstone of our financial strategy. We continue to stay focused on identifying opportunities through the robust revenue growth management (RGM) and funding the growth (FTG) processes we have in place. RGM leverages analytics to drive promotion and pricing efficiencies, better assortment and accretive innovation. Our FTG programme seeks to deliver efficiencies in costs — direct as well as indirect spending areas like advertising and overheads.

This relentless pursuit of efficiencies across all lines allows us the flexibility to invest in offering superior products supported by effective communication as well as lead category development actions while delivering against our strategic pillars.

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