Speaking at the Barclays Global Consumer Staples Conference earlier this month, Colgate-Palmolive’s chairman, president and CEO, Noel Wallace, outlined three strategies for the business as it navigates the pandemic.
1. Staying true to its core principles
The company has launched several new initiatives to support consumers, retailer customers and communities. These include providing educational materials around hand-washing and deepening its sustainability commitments. In several markets, it has supplied customers with plexiglass screens so that they can keep their employees and shoppers safe. In Latin America, it has partnered with traditional operators and the formalised trade. The Colgate-Palmolive branding provides reassurance while also helping to drive awareness. This could be an opportunity for other suppliers to pursue or become part of the in-store media opportunity.
2. Adapting its strategies for growth
The company has been innovating and investing in its core brands while adapting its marketing messages for the COVID-19 environment. This includes reformulating its Protex brand in the anti-bacterial body cleansing segment to bring in a natural ingredient story, increasing the brand’s relevancy. With Ajax in Europe, its introduced new biodegradable and vegan formulas and is using packaging made with 100% recycled plastic. It has also been investing in innovation and high growth segments, using premiumisation to drive up price points. This includes launching new sanitizers within some of its brands which operate in adjacent categories. Despite the expected recessionary environment, it believes that affordable luxury will be a key trend, providing an opportunity to continue driving premium products.
The company has also been expanding into new channels and markets. Ecommerce has been a key area of focus with sales up almost 50% in the last quarter. To support this, it has launched a new direct-to-consumer (DTC) product, Colgate hum. This is a smart, app-enabled, electric toothbrush. The company has also been ramping up its activities in China, noting that it needs to premiumise its product portfolio to compete effectively. NPD has supported this, with the company also looking to bring skincare trends into oral care. In China, it has also been tapping into live stream events. Working with one of the top live streamers in the market, during a recent initiative it sold out of all of its product in 10 seconds.
3. Managing through the crisis while being better prepared for the future
Noting that line extensions have not delivered incremental growth for Colgate or its customers, the company will shift its focus and resources to achieve a better balance between line extensions and transformative and disruptive innovation. It will also adapt its systems to better use data improve efficiencies in trade spending, programmatic advertising and product formulation. Portfolio optimisation, along with improving supply chain flexibility and efficiencies will also be areas of focus.
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