Colgate-Palmolive (India) reported a 4 per cent sales growth for the three months ending March, the highest in four quarters. Toothpaste volumes grew 3 per cent while toothbrush volumes grew 5 per cent during the quarter.
This volume growth is better than what it expected in the March quarter. Revenue growth reported was 6.8 per cent to Rs 1,099 crore. Other positives include the rise in brand investment to aid volume recovery (with advertising and sales promotion expenditure touching 18.1 per cent of sales in the March quarter) and success in personal care (3 per cent of India sales; 21 per cent of global sales) can boost long–term growth.
There is no doubt that Colgate-Palmolive (India) is putting up a strong fight against Baba Ramdev’s Patanjali Ayurved which has been causing disruption in FMCG segment lately. Its India-specific products like the Active Salt Neem toothpaste are pushing up sales with a 1.1 per cent market share nationally. The FMCG major is working on strengthening its naturals portfolio with new launches in 2016-17 to compete with the growing likes of Dabur and Patanjali Ayurved.
There has been a step-up in herbal segment innovation with its launch of sensitive toothpastes containing clove oil (Colgate Sensitive Clove Essence) and based on charcoal (Colgate Charcoal Deep Clean) in 2015, which according to the company, have been doing well. In February 2016 , it introduced an express pain relief gel in the market. The innovations are likely to continue this year.
Around 70-80 per cent of Colgate’s Indian revenue drives from toothpastes and it still remains the leading player in the category despite threats from Patanjali Ayurved whose Dant Kanti paste has been eating into the former’s share which has slipped to 55.7 per cent from 57.3 per cent in December 2015 quarter.