Oral care companies are jockeying for prime shelf space as grocers seek to simplify the shopping experience
By Seth Mendelson
For the stodgy old oral care category, things are really not too bad. That is especially true if your name is Procter & Gamble, the biggest player in the category, or a bunch of smaller niche players that continue to gain awareness with retailers and consumers.
Powered by the much-heralded introduction of its 3D White line last year, P&G has soared above the pack in the oral care segment and, according to a number of industry officials, including retailers and competitors, the Cincinnati-based conglomerate’s coattails are long enough to take other companies on the ride.
“Oral care sales have always been driven by innovation in the category,” says Dunnan Edell, president of CCA Industries, which manufactures the Plus-White brand of oral care products. “Last year, P&G’s launch of 3D played a big role in the growth of the oral care category. It gets people excited to walk down the aisle and a lot of companies benefit from it.”
The biggest winner, of course, was P&G and its Crest line of products. According to Chicago-based SymphonyIRI Group numbers for the 52-week period ended Nov. 28, P&G posted very respectable gains in the toothpaste and mouthwash categories. Interestingly, its largest competitor, New York-based Colgate, has been relatively quiet in terms of new products and showed a drop in dollar volume. “Now we are waiting for the next innovative product from the big players,” notes Edell. “Maybe it is someone else’s turn to lead the category.”
P&G officials say that the key to their recent success is more than just a new product line. According to Kevin Kelley, the company’s category sales manager-oral care, the company has divided consumers into four segments: Purposeful, passionate, harmonious and familiar. The goal is to reach each type of shopper with products that meet their needs.
“For example, the purposeful consumer is more health-obsessed with their oral care,” he says. “They want the best report from their dentist and we target our Pro-Health line at them. The passionate consumer if focusing on her smile and we target the 3D White line at them. The harmonious consumer is looking for a basic approach to their oral care needs and we target the Crest Plus Scope line there and the familiar consumer is the least obsessed and is looking for any product to get the job done. We focus our basic products at them.”
Kelley says that it is important that retailers simplify the shopping process for consumers by putting similar products together. “We want to get some traction with these items and the best way is for the retailer to place them together so consumers can see what is being offered by sub-segment,” he says. “We are designing our packaging to make sure that it is easy for the consumer to see that the products are related.”
P&G cannot be the only product in the department, however. There can be no denying that retailers still have to give considerable space to the other large players, including the various Colgate brands and GlaxoSmithKline’s Aquafresh and Sensodyne lines. “These products have a loyal following with consumers and they still command millions and millions of dollars in sales,” says one retailer. “I have no intention to cut back on my assortment of these brands. I will just have to figure something out.”
Other brands are also demanding more space. East Rutherford, N.J.-based CCA Industries, for example, has created a niche with its Plus White toothpaste and whitening system products. “The poor economic situation has helped [over-the-counter] whitening systems,” Edell says. “Consumers still want white teeth but they can’t afford to go to the dentist now to get them done. So they are buying these products off the shelves and I think they are finding that they work just as well.”
Edell emphasizes that retailers must create an environment where consumers can pick up low-margin, slow-growing toothpaste and higher-margin whitening products. “We all know that oral care is a commodity that people have to use,” he says. “The key to building sales and profits is to promote the products that offer more features and create more excitement in the stores.”
Another route is through the licensed products end of the business. Toothbrushes featuring licensed characters continue to sell well despite the slowdown in the economy. Still, it appears that pricing is playing a role here as well. “We find that consumers are trading down on price in the toothbrush category,” says Puneeb Nanda, president of Buena Park, Calif.-based Dr. Fresh. “Retailers need to pay more attention to pricing in this category because the consumer is more savvy today and they don’t want to pay more than they have to.”
Nanda, who is known as “Dr. Fresh” in the trade, says that his company commands a 22% share in the kids toothbrush segment. “Like everything else in this category, innovation leads the way,” he says. “We have the products that consumers want so retailers should stock more of them.”
World Trend is also thriving in the licensed toothbrush category. Richard Hyken, vice president of sales and marketing for the Pomona, Calif.-based company, says that it comes down to having the right license at the right time. “We have several that are very strong,” he says, noting that Thomas the Tank Engine, the Care Bears and Yo Gabba Gabba lead the list. “So that is helping our sales now, but we need to stay ahead of the curve.”
Both Dr. Fresh and World Trend officials stress that retailers need to highlight these products to get the most from them. Off-shelf displays can help build awareness and can be placed anywhere in the store, including the baby care, toys and cereal aisles. “Creating awareness and visibility is what drives these sales,” notes Hyken.