Innovation likely to continue brushing up oral care category
Oral hygiene experienced a brushing up in 2007 and emerged as one of the fastest-growing sectors in the U.S. cosmetics and toiletries industries thanks in large part to a strong surge of hot new products. However, 2008 looks to be more challenging for manufacturers as consumers tighten their wallets amid tough economic conditions. Given this, products with added benefits likely will remain key growth drivers.
“The sector, which relies on consumers’ willingness to pay extra for added convenience products, will find a thriftier consumer in 2008 as the U.S. economy continues to struggle,” stated research firm Euromonitor International in its most recent U.S. Oral Hygiene report.
Euromonitor International predicted that consumer expenditure growth in 2008 (in current prices) on personal care will slow to 2 percent—the lowest rate since 2001. This sluggish growth will spell challenges for the oral hygiene segment and manufacturers that hope to grow the segment with premium-priced value-added innovations.
If this proves to be the case, it will be a shift from the growth experienced in 2007. For example, toothpaste, which accounts for more than 35 percent of total sector growth, had its best performance since 2001, according to Euromonitor International. Fueling the growth was, in part, the continued success of Crest Pro-Health, launched in 2006, and Colgate Total’s successful marketing campaign.
Manual brushes with added benefits, such as Colgate’s 360 or Oral B’s Pulsar, which are priced four to six times higher than a generic manual toothbrush, helped drive growth of manual brushes by 2 percent—a category that tends to be flat, the research firm noted.
Furthermore, tooth whiteners experienced a rebound—growing by 10 percent in 2007, after declining by 27 percent between 2003 and 2006—as manufacturers looked to brighten the category with such innovative launches as Listerine Whitening Strips and Aquafresh White Trays.
Manufacturers, however, are hoping to continue the momentum as consumers continue to place value on the cosmetic aspects of proper oral health, such as whiter teeth and controlling bad breath.
For example, Procter & Gamble launched for 2008 its new Crest Whitestrips Daily Whitening Plus Tartar Protection, marking the first time that Crest Whitestrips has gone beyond whitening. The strips promise to protect against daily tartar buildup, whiten and protect from everyday stain buildup.
Earlier this year, Colgate announced that products planned for launch in first quarter 2008 included Colgate Total Advanced Whitening and Colgate Total Advanced Fresh toothpastes, Colgate 360 Degree Deep Clean manual toothbrush and Colgate 360 Degree Sonic Power battery toothbrush.
Dr. Fresh is looking to invigorate the mouthwash category with the launch of Dentyne Ice mouth rinse, which features the same flavors as Dentyne arctic chill and shiver mint chewing gum. The mouthwash is alcohol-free.
Meanwhile, SunTrust Robinson Humphrey analyst William Chappell is optimistic about Chattem’s ACT mouthwash brand, which it snapped up from Johnson & Johnson.
Sales forecast: Oral care 2012Consumers will look for added-value products
| 2007 | 2012 | |
| Toothpaste | 2,078.80 | 2,025.2 |
| Toothbrushes | 1,699.1 | 1,868.8 |
| Mouthwash | 914.4 | 924.4 |
| Denture care | 407.2 | 380.4 |
| Tooth whiteners | 378.8 | 397.8 |
| Dental floss | 297.8 | 296.1 |
| Mouth fresheners | 141.7 | 111.0 |
| Total oral care | 5,899.70 | 6,003.5 |
“In our opinion, ACT is emerging as the real jewel of the five brands acquired from J&J. Recall, ACT had seen limited advertising and only one product extension in the five years before Chattem acquired it in early 2007,” stated Chappell in a recent research note. “Since the acquisition, Chattem has improved the packaging, added a 33-ounce bottle (expanding the addressable market by 40 percent) and stepped up advertising. As a result, the brand not only has grown in excess of 20 percent over the past year, it also has gained market share, the only brand in the category to do so during that time frame.”
He noted that ACT already has grown from a $40 million brand to a $60 million brand under Chattem’s ownership. He said it is likely ACT could grow to $100 million in the next two to three years.
“Moving to 2009, we expect the company to leverage its strengthened position with retailers to gain additional facings for new product extensions and more favorable shelf space at retail,” Chappell stated.