February 5, 2007
Giants Take Natural Approach to Oral Care
By Laura Klepacki, special to GMDC
The battle of the toothpaste titans is now spilling into the natural products arena and that may herald some big changes in the mass and price-based paste category, which according to Information Resources Inc., inched up less than one percent (excluding Wal-Mart) in 2006.
Last spring, Colgate acquired Tom’s of Maine, the nation’s leading marketer of natural toothpaste, for a $100 million. The partnership entered Colgate into the $3 billion U.S. market for natural oral and personal care, which has been growing at a brisk 15 percent a year. At the same time, the partnership helped Tom’s products filter into mainstream mass-market stores, giving Colgate a significant new segment addition to its extensive inventory of products.
Now its rival, Procter & Gamble, is readying a new toothpaste with a natural twist to get a piece of the action. Crest Nature’s Expressions is slated to hit stores in April, perhaps enticing some whole health-oriented shoppers to the traditional oral care section.
“Through consumer research, Crest discovered a growing audience segment who we identified as the ‘mainstream naturals’ consumer,” said Diane Dietz, general manager North American oral care at P&G. “We developed Nature’s Expressions for this target, a woman who wants to experience natural ingredients but whose preference indicates a strong loyalty to brands with established heritage.”
Nature’s Expressions combines Crest’s original formula with natural flavor ingredients. The flavor ingredients are naturally sourced and minimally processed, so as not to alter molecular make-up. However, Crest Nature’s Expressions also contain some artificial ingredients, so it could turn off purists.
Still, it is a significant initiative by a major player in the oral care category to appeal to the natural products consumer. Along with Colgate’s Tom’s of Maine, there are only a handful of true natural toothpaste offerings including items from Jason’s, Kiss My Face and private label from specialty retailers such as Trader Joe’s.
If change comes, it will be revolutionary. According to Information Resources Inc., of the top 15 toothpaste brands in the U.S., not one natural product appears in the ranking. Crest and Colgate brands dominate the list, with Sensodyne and Aquafresh each making one showing.
Discussion Questions: Will a possible marketing war between Crest and Colgate inject some energy into the category? Will natural products sizzle give the paste category some much need growth? Will a significant new ingredients offering move the paste category away from strictly price competition?
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Crest Nature Expressions will help expand the “natural” health & beauty aids category, since Crest is a prominent brand name and gets shelf space in (nonorganic) supermarkets and drug stores everywhere. Every HBA brand and every food brand is carefully considering a “natural” line extension, acquisition, or startup, if they haven’t already gone down 1 or more of those paths. Why not? It’s a way to get more shelf space or defend the shelf space you have.
The keys to focus on in this launch are $3 billion with growth of 15%! Natural products are one of the fastest growing areas in health, beauty, and wellness products, so it is logical for Colgate’s acquisition and launch plans into mainstream retailers with Tom’s. Those retailers want to serve their shoppers with natural products that can bring a higher retail value and more profits into this very mature category.
The interesting test will be space allocation (where does the shelf space come from for these natural products?) and how the consumer translates these entries into conversion from what they use now. Will these sales be transfers from existing store sales or new business from specialty retailers focused on natural oral care products?
This is a very mature category. Having 2 major companies slug it out will not change the category dynamics, it will only determine whom consumers will have for their choices. The key to success here depends on positioning the 4 P’s and establishing a memorable marketing campaign for consumer’s Top of Mind awareness.
Sounds like cannibalization will be the biggest issue here. Consumers will have to switch from their regular brand to the more “natural” ones as entrance into this category has (what I suspect) low penetration. Moms will pick out toothpaste for their young children and going natural most likely won’t be their first choice.
Going “green” is all in consumer education. As consumers start to understand what ingredients are going into their current oral care products, they may choose to switch to more natural products. And typically these products are higher priced and less price sensitive than mainstream products. So yes, there is potential to move consumers up to higher priced natural products.
Going “part way” to a natural product, as Crest has done (it still contains artificial ingredients), will not get many current “green” consumers to switch. Green consumers tend to be label readers who can spot an artificial ingredient a mile away. If you think about the toothpaste consumer in general (you, for instance), how many would pay more for a “partially natural” toothpaste?
As suppliers start integrating “green” lineups with their current “non-green” brand portfolios, they have to be careful. How much do they communicate to consumers about product ingredients, without opening a can of worms about their “non-green” brands (and particularly if the “green” products are a line extension of existing “non-green” brands)?
I just don’t know if the natural/organic retailers will take on a Crest brand, but that is the decisive factor. If it’s in the health food store “channel,” there will be a brand endorsement effect because those retailers are very, very strong brands. If so, watch for a sales explosion and the move of known brands into that whole (sub)-channel.
If not, the P&G effort will probably fail unless…unless…traditional food and drug retailers create natural themed retail activation with all-natural versions of known brands as focal points. Hey, this could be really interesting, come to think about it!
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Crest Nature Expressions will help expand the “natural” health & beauty aids category, since Crest is a prominent brand name and gets shelf space in (nonorganic) supermarkets and drug stores everywhere. Every HBA brand and every food brand is carefully considering a “natural” line extension, acquisition, or startup, if they haven’t already gone down 1 or more of those paths. Why not? It’s a way to get more shelf space or defend the shelf space you have.
The keys to focus on in this launch are $3 billion with growth of 15%! Natural products are one of the fastest growing areas in health, beauty, and wellness products, so it is logical for Colgate’s acquisition and launch plans into mainstream retailers with Tom’s. Those retailers want to serve their shoppers with natural products that can bring a higher retail value and more profits into this very mature category.
The interesting test will be space allocation (where does the shelf space come from for these natural products?) and how the consumer translates these entries into conversion from what they use now. Will these sales be transfers from existing store sales or new business from specialty retailers focused on natural oral care products?
This is a very mature category. Having 2 major companies slug it out will not change the category dynamics, it will only determine whom consumers will have for their choices. The key to success here depends on positioning the 4 P’s and establishing a memorable marketing campaign for consumer’s Top of Mind awareness.
Sounds like cannibalization will be the biggest issue here. Consumers will have to switch from their regular brand to the more “natural” ones as entrance into this category has (what I suspect) low penetration. Moms will pick out toothpaste for their young children and going natural most likely won’t be their first choice.
Going “green” is all in consumer education. As consumers start to understand what ingredients are going into their current oral care products, they may choose to switch to more natural products. And typically these products are higher priced and less price sensitive than mainstream products. So yes, there is potential to move consumers up to higher priced natural products.
Going “part way” to a natural product, as Crest has done (it still contains artificial ingredients), will not get many current “green” consumers to switch. Green consumers tend to be label readers who can spot an artificial ingredient a mile away. If you think about the toothpaste consumer in general (you, for instance), how many would pay more for a “partially natural” toothpaste?
As suppliers start integrating “green” lineups with their current “non-green” brand portfolios, they have to be careful. How much do they communicate to consumers about product ingredients, without opening a can of worms about their “non-green” brands (and particularly if the “green” products are a line extension of existing “non-green” brands)?
I just don’t know if the natural/organic retailers will take on a Crest brand, but that is the decisive factor. If it’s in the health food store “channel,” there will be a brand endorsement effect because those retailers are very, very strong brands. If so, watch for a sales explosion and the move of known brands into that whole (sub)-channel.
If not, the P&G effort will probably fail unless…unless…traditional food and drug retailers create natural themed retail activation with all-natural versions of known brands as focal points. Hey, this could be really interesting, come to think about it!