Oral health & beyond: How age-old FMCG brand plans to maintain stunning growth in India

In an exclusive interaction with Zee Business Executive Editor Swati Khandelwal, Colgate-Palmolive (India) MD and CEO Prabha Narasimhan shed light on the company’s strategy to maintain its path of growth-driven profitability as a more than 200-year-old brand — which has remained a household name in India since 1937. “Colgate is the single most penetrated FMCG brand. Whether urban or rural, nine out of 10 homes have a Colgate product at least once a year… It is a legacy that we are very proud to hang on to,” Narasimhan told Zee Business on the sidelines of Colgate-Palmolive’s annual Brand Days event.

“Oral care penetration in this country is near universal… Everybody has a toothbrush and toothpaste at home, (but) it’s the usage that we need to drive… Only 20 per cent of urban consumers brush their teeth twice a day, and only about half of rural consumers even brush their teeth daily.”

“Moving these two numbers of consumption is really the first part of our strategy, and the core foundation on which our growth is built,” the CEO added.

Colgate-Palmolive India is focused on promoting oral health through best-in-class science-backed tech products. “Colgate-Palmolive is globally the biggest investor in the understanding of oral health and the science of oral care.”

In a presentation to investors, released on Tuesday, the company highlighted four pillars of growth as part of its strategy in action: 

• Lead the toothpaste category
• Premiumise through science-based superior innovation
• Lead category growth in toothbrush and devices 
• Build personal care

According to Colgate-Palmolive, 75 per cent of the urban population in the country believes their teeth are in excellent condition while 89 per cent suffer from oral health issues. Also, nine per cent of the country’s population visits a dentist every year. 

Colgate-Palmolive reported a strong set of quarterly numbers for the April-June period, beating Street estimates on all parameters and maintaining its margin — a key measure of profitability — well above 30 per cent. 

“We are a debt-free company with a very strong balance sheet,” Narasimhan told Zee Business on Tuesday. “This has been a truly profitable company… But our focus is not as much about driving profitability as it is about driving profitability through growth,” she said. 

Here’s how Colgate-Palmolive fared in Q1 

The company’s net profit grew 30.5 per cent on a year-on-year basis to Rs 274 crore for the first quarter of the current financial year, and revenue expanded 10.6 per cent to Rs 1,324 crore, according to a regulatory filing. The company’s margin for the three-month period improved by 440 basis points to 31.6 per cent compared with the corresponding quarter a year ago. 

According to Zee Business research, Colgate-Palmolive’s quarterly net profit was estimated at Rs 254 crore, revenue at Rs 1,282 crore, and margin at 30 per cent. 

The FMCG major registered an increase of 12.3 per cent in domestic sales, driven by double-digit growth in the toothpaste segment. 

Plans for Palmolive

The company — which has a host of products under the Colgate and Palmolive brands — plans to diversify its business beyond oral care, towards personal care. “The second brand (Palmolive) is “a little bit of an underserved equity at the moment but two out of three consumers in India know this brand… So, awareness (about the Palmolive brand) is there... We just need to build on that awareness,” said Narasimhan.

Stating that the company plans to further enhance the quality of its Palmolive range of products, she said: “We are very small at the moment, operating in the body-wash and hand-wash categories.” 

“The (Palmolive) products are already best in class… We intend to bring more of our global range in Palmolive and then invest on advertising to drive awareness. Because, truly, once you bathe with Palmolive, it is difficult to bathe with anything else.”

Investment strategy 

The first part of Colgate-Palmolive’s investment strategy is to support its three core brands: Strong Teeth, Active Salt and Max Fresh. 

“The second part of our war-chest is really about driving premiumisation. We have some fantastic products with absolute latest technology in oral care, like Visible White, which was launched last year, or Colgate Total, which is the world’s No. 1 germ-fighting toothpaste, or even PerioGard (a gum protection toothpaste),” the CEO elaborated. 

Finding inorganic growth is not an issue, she said. “It is a question of us finding the right target that fits with what we want to do and fits with our strategic intent.”

Asked about her plans for the next one year, Narasimhan said: “It is truly a privilege to work on a brand that is a household name in this country. What we would like to do is to double down on the growth trajectory that we have been delivering.”

The idea of Brand Days is to interact with the country’s consumers, she added. 

Narasimhan joined Colgate in 2022 from Hindustan Unilever. She has nearly 25 years of experience in customer development, consumer marketing and innovation across geographies and multiple categories, including home care, food, and personal and skin care.