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Saturday, April 07, 2001

P&G struggles to regain Crest's toothpaste lead




By Randy Tucker
The Cincinnati Enquirer

        Procter & Gamble Co. executives were smiling last May after learning Crest toothpaste had passed archrival Colgate-Palmolive's brand in sales volume.

        It was the first time since Colgate dethroned Crest in late 1997 as the top-selling U.S. toothpaste that the total number of Crest units sold in a month outpaced Colgate.

        But those smiles didn't last.

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        Almost a year later, Crest is still struggling to regain the popularity that made it the best-selling toothpaste in America for more than three decades.

        According to Chicago data tracker Information Resources Inc. (IRI), Crest trailed Colgate in dollar and volume sales for the year ending Feb. 25.

        Colgate had sales of $551.5 million in the toothpaste category for the period, giving it a 32.5 percent share of the U.S. market. By comparison, Crest had sales of $463.7 million, or a 27.3 share of the market, IRI said.

        Volume sales for Colgate rose 3.1 percent to 233.3 million units sold, while volume sales for Crest rose 1.4 percent to 195.2 million units sold.

        Crest is not one of P&G's 10 biggest brands — the ones the company is focusing on because they accounted for half its $40 billion in revenues last year and much more than half its profits. But the continuing struggle with Colgate illustrates how difficult it can be for P&G to grow brands like Folgers and Tide.

        P&G officials say toothpaste sales don't tell the whole Crest story.

        The Cincinnati consumer-goods giant has introduced a number of oral-care products under the Crest name that are expected to boost overall sales for the brand to $1 billion.

        The company says that could vault Crest back to the top of the dental charts as the No. 1 competitor in “total oral care.”

        “We are recognizing consumer needs and really filling gaps in the marketplace in a very powerful and profound way,” Bryan McCleary, a Crest spokesman, said. “That is going to result in Crest being Procter & Gamble's newest billion-dollar brand.”

        P&G's Crest Whitestrips kits, for example, are expected to snare a significant share of the half-billion-dollar home teeth-whitening segment.

        The company said it has already sold more than 250,000 of the $44 teeth-whitening kits through its Web site (www.whitestrips.com) and at dental offices.

        Crest Whitestrips' retail launch is expected this year and will be supported by a major marketing push, Mr. McCleary said.

        “Retailers across the country are expecting this to be one of the biggest new product introductions in recent history,” he said.

        In the meantime, P&G has already begun the expansion of its newly acquired Dr. Johns' SpinBrush under the Crest brand name.

        The battery-operated toothbrush is expected to double P&G's $75 million in annual toothbrush sales. The company said it has sold 2 million of the $5 to $6 power toothbrushes in the last two months in limited distribution.

        But don't be misled.

        P&G isn't neglecting the toothpaste category.

        The company will introduce a new whitening toothpaste this month — Dual Action Whitening — which not only removes stains, “it keeps them off,” Mr. McCleary said.

        Still, despite P&G's best efforts, Colgate continues to dominate the toothpaste market and plans to push growth this year with its own new products and stepped-up marketing.

        Colgate-Palmolive chief executive officer Reuben Mark said at a consumer conference in New York this week that he expects new products to help the Colgate brand widen its lead in the toothpaste market.

        The recent introduction of Colgate's Total Plus Whitening toothpaste already has helped the company boost its share of U.S. toothpaste sales to a record 37 percent last month, Mr. Mark said.

        P&G said it didn't have complete market share data for March, but that it expected a significant boost in market share this month as a result of the Dual Action Whitening launch.

        Montly market share figures can rise or fall significantly based such things as new product introductions and promotions.

        Experts see Crest's struggles in the toothpaste segment as indicative of the daunting challenges facing P&G as it tries to revive sales of other struggling brands, such as Bounty paper towels and Always feminine pads.

        “P&G, once the undisputed leader in the consumer products industry, is now looking to others to benchmark its operating performance,” Andrew Shore, who follows P&G for Deutsche Banc in New York, wrote in a recent report.

        P&G's strategic approach to improving the performance of its major brands involves cutting overhead costs through its five-year restructuring plan, which will eliminate 24,600 jobs by 2004. Part of the savings will be used to boost ad spending and promotions behind core brands.

        But appealing to consumers' brand loyalty doesn't necessarily guarantee growth in a increasingly competitive marketplace, Tom Vierhile, general manager of Marketing Intelligence Service in Naples, N.Y., said.

        “Ten years ago, I think people might have said, "I'm a Crest guy or girl, or I'm a Colgate guy or girl,'” Mr. Vierhile said. “But now people have expanded the sets of products they're willing to consider, and they're letting their decisions be determined by what's on sale, what looks good, what they have a coupon for. It's a lot tougher now to stand out, especially in a category like toothpaste, because the perception is that a lot of these things are pretty comparable.”

       



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