Hi all,
Thanks for creating this thread on Colgate India.
There are a few changes that are happening in the overall Colgate global trajectory
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They had a program called Global Growth and Efficiency program which was specifically for optimizing their supply chain and increasing gross margins. This program started from 2012 and ended recently on Dec 2019. The program was super successfull and Colgate India gross margins are at an all time high of 65.24%.
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Natural and sustainable products is an important and high growth area across all their businesses across the world and people are willing to pay a premium for it. Some of the premium innovations in oral care are Colgate Natural Extracts , Charcoal toothpaste, bamboo manual toothbrush etc
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Relaunches in cavity and teeth whitening products. Some Asia esp India focused products are Colgate Total maximum cavity were relaunched , there was a global relaunch in Colgate. There was a new launch of its hydrogen peroxide based toothpaste called Colgate optic white renewal in the US.
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Globally, they are expanding their skin health portfolio. In 2018 and 2019 they acquired 3 skin care cos called PCA skin, EltaMD and Filorga. While they don’t have a skin portfolio in India - it’s good to know that they are enhancing their capabilities in this market- as we know India has a sizable skin care market.
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Another interesting area is their fastest growing business i.e pet foods driven by Hills. Hills recently achieved the maximum sales growth in the last 11 years. While pet foods is a developed business in countries like US/Europe etc - it’s picking up speed in countries like India. While globally oral care contributes 46% to it’s overall sales it contributes 86% to its Asia business - so again chances of having a pet food business in India are next to zero. Pet foods is a small industry in India sized about 2200 Cr which is controlled by Mars (pedigree, whiskas, royal cannon)
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Enlisting new channels e.g travel retail and pharmacies. These are channels which serve specialized products. We have a landscape dotted with pharmacies in every nook and corner so the possibility of using this channel to push specialized products is interesting.
I think Colgate is doing very well in having a plan in place to increase margins. One cannot expect high volume growth going forward however taking price through these initiatives will certainly see the ROCE increase going forward.
Best
Bheeshma