With a strong fourth quarter rounding off a great year, Colgate-Palmolive’s chairman, president and CEO, Noel Wallace, has outlined how investing in innovation, productivity and capabilities will enable it to build on the momentum of 2020 in the year ahead and beyond.
Forecasting organic sales growth of 3-5% in 2021
For 2021, the company is planning for organic sales growth of 3-5%, with continued strong growth in the first half, but normalising in the second half. However, is expects demand to remain elevated compared to 2019. Increased advertising will play a key role, focusing its efforts where it can get the best returns, including targeting categories it had not previously been supporting in some geographies. The company views three key factors contributing to future growth.
1. Adopting a category-driven approach to growth
The company has changed how it thinks about growth, to be focused on driving category growth through growing its customer base and usage frequency. It is pursuing strategies to reach a larger group of customers through improving its digital marketing targeting, with the aim of raising brand awareness and household penetration.
The company has also been focused on breakthrough and transformational innovation which enables it to increase the frequency of how customers use and purchase its products. Self-diagnostics and self-care are two areas where the company has been making some in-roads, with new products launched, as consumers become more comfortable with telehealth systems and at-home procedures.
Source: IGD Research
2. Pairing growth and productivity more effectively
During 2020, the company improved profitability while increasing investments in brand building and developing new capabilities. It was able to do this by pulling on multiple levers including premium innovation, revenue growth management and remaining laser-focused on all cost elements. Given expected increased in raw material costs, logistics and other areas, it recognises that it must do more to ensure it can continue to invest in transformational capabilities. Pairing growth and productivity more effectively will be a key part of this.
3. Building organisational capabilities
Last year, it took several steps to accelerate the rate of cultural change, focused on building an organisation for future growth. This includes bringing in more external ecommerce talent, up-skilling existing talent across the organisation and launching online-specific innovation. This has helped it to grow ecommerce sales to represent a double-digit percentage of sales. It also continues to invest in better systems and cloud capabilities which are providing it with more agility and speed.
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