* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *
Personal care giant Colgate-Palmolive is generally associated with toothpaste and soap, but its broad portfolio also includes petfood, deodorants, fabric softeners, household cleaners and detergents. Brands include Ajax, Speed Stick, Mennen and Hill's Science Diet, alongside the two products that make up the company's name. Colgate is the world's #1 toothpaste and toothbrush brand; Palmolive soap is the third largest soap brand, now covering a growing range of haircare products as well as soaps. Colgate-Palmolive is also truly international, deriving around 75% of its sales outside the US. Its biggest region, in fact, is not its domestic market but Latin America.
Who handles Colgate's advertising? Click here for these and other agency account assignments for Colgate-Palmolive. Including unmeasured media, Colgate declared total advertising expenditure of $1.43bn for 2016.
See Personal Care index for competitive companies
Colgate-Palmolive has long served as a model for effective global packaged goods management, deriving its revenues in broadly equal measure from North America, Europe, Latin America and Asia. However fierce competition with Procter & Gamble in particular has forced the company to withdraw from weaker areas, such as laundry detergents in developed markets, in order to concentrate on the core business of oral care and body wash. This strategy appears to have paid off, with the oral care business continuing to demonstrate strong organic growth. Acquisitions have been comparatively few and far between, and are generally small in size.
For many years Colgate-Palmolive was an exception among US companies in that it was regarded as strong internationally but weak in its domestic market. Since the late 1990s, that perception has changed as the group has re-established local strength without sacrificing any of its worldwide profile, which covers more than 200 countries. The group's business now divides into five categories: oral care, personal care, household surface care, fabric care and pet nutrition.
Oral care products are Colgate's biggest segment, contributing sales of around $7.1bn in 2016. The group is by far the worldwide market leader in this segment, but sales have been under intense pressure. For full-year 2016, the company claimed a 44.0% share of the global toothpaste market, more than its three largest competitors combined, but slightly below highs of over 45% in 2015. Colgate is the #1 brand in that sector in more than 170 countries. In 2016 P&G was #2 worldwide with around 14.0%, followed by GlaxoSmithKline (12.8%) and Unilever (8.1%). In some countries, its share is even higher, as high as 72% in Brazil and over 80% in Mexico. It is also the global market share leader in manual toothbrushes as well, with 33.1% global share in 2016, to around 21.5% for P&G. There are numerous different formulations of the main Colgate toothpaste, as well as a host of other products including toothbrushes, dental floss and mouthwash. [See Colgate / Crest profile for more].
In personal care, Colgate is the world #1 in liquid hand soap and men's bar deodorants. Brands include Speed Stick and Lady Speed Stick deodorants, Softsoap liquid soap, Irish Spring bar soap and a small selection of men's toiletries such as Skin Bracer and Afta. The Palmolive name is no longer used for the company's soaps within the US, although it remains Colgate's leading international soap brand. Regional sub-brands include new launches Palmolive Thermal Spa and Palmolive Aromatherapy liquid soaps, Caprice shampoo (North America), Gard haircare products (Germany), Palmolive Basics shampoos (Netherlands and other countries), Cashmere Bouquet antiperspirant (in Latin America), Baby Magic babycare soaps and talc (Latin America), Soft & Gentle and Tahiti soaps and antiperspirants (Europe), Cleopatra, Unicura, Donge and Cadum soaps (Europe), Tender Care hair and skin care products (Asia). In 2011, Colgate expanded its portfolio in Europe with the purchase of the Sanex bath brand for €672m. The business was sold on by Unilever in order to satisfy regulators over its acquisition of the old Sara Lee personal care division, of which Sanex had been part. Combined sales from personal care products were approximately $3.0bn in 2016.
Household care includes Palmolive washing-up liquids, tablets and wipes and Ajax cleaners (also known as Axion in some countries), Murphy Oil Soap and a range of international washing-up and dishwashing products under the Fabuloso, Pinho Sol, Dona Blanca, Odex, Vel, Klorix, LaCroix and other brand names. The group has steadily wound down its presence in the laundry sector since 2003. That year it sold several European detergent brands to Procter & Gamble, including Axion and Gama in France, Dynamo in Denmark, Dinamo in Italy, and Ajax in Sweden. In 2005 it announced the sale of its remaining laundry detergents in North America, including Fab, Dynamo, Arctic Power, ABC, Cold Power and Fresh Start, to privately owned Phoenix Brands. The remaining portfolio of detergents in southeast Asia was sold to P&G at the start of 2006. Its laundry and pre-wash products in Australia and New Zealand were sold to Henkel in 2015. Colgate continues to market Soupline, Suavitel and Softlan fabric conditioners and softeners in several global markets, including the US, where it remains the local #2 behind P&G with almost 19% market share (IRI ye 2015). It actually imports Suavitel into the US from Mexico. Following the example of its laundry business, the group sold off its household bleach business in Canada and Latin America to Clorox at the end of 2006. Combined sales from home care products were around $2.7bn in 2016.
The group's pet nutrition, Hill's, reports as a separate entity. It is among the leaders in its field. There are two main lines: Science Diet balanced nutrition products sold through petcare suppliers, and the more specialised Prescription Diet range sold through veterinarian clinics. Hill's was one of several US petfood marketers forced to recall batches of its gravy-based foods in 2007, after a supplies from a third-party manufacturer were found to be contaminated. However the impact on sales and profits was minimal. For 2018, revenues were $2.39bn, of which around half was generated in the US. The company was the #4 petfood marketer overall in 2010 with just over 8% market share.
Group sales rose slowly but steadily in the 2000s and early 2010s, peaking in 2013 at $17.42bn. However, currency fluctuation put a stop to that gradual elevation in 2014, prompting a 1% dip to $17.28bn. At constant rates the increase would have been 5%. Net income has also declined from a 2012 peak of $2.47bn. For 2014, earnings of $2.18bn included a number of special charges for restructuring, legal matters, revaluations and tax issues.
Results for 2015 reflected the cold winds of currency fluctuation and Venezuela's economic meltdown. A near-12% negative impact from the strengthening dollar caused full year revenues to slip 7% to $16.0bn. At constant rates the increase would have been 5%. A $1.1bn charge against Venezuela caused net income to plunge by more than a third to $1.4bn. Without that item, profits would have risen 9%.
Currencies also impacted on 2016 results, with reported revenues down 5% to $15.20bn. Organic sales excluding divestments and currencies would have been positive 4%. Net income rebounded after the prior year's Venezuela charge to $2.44bn. Less than 20% of total revenues - or around $3.5bn - were generated in the US in 2015.
There was a modest rebound in 2017, with revenues rising almost 2% to $15.45bn. However an even steeper rise in expenses and a higher tax charge caused attributable earnings to fall 8% to $2.02bn.
It is perhaps surprising that Colgate-Palmolive has remained independent so long, given its comparatively small size and the dominance of its lead brand. However, any potential acquiror would require deep pockets to fund a deal. Colgate-Palmolive's declining revenues have done little to deter investors. Its shares hit new highs during 2017, lifting its market cap over $60bn.
For 2018, revenues edged up just marginally to $15.54bn. Tax cuts helped net income to rise almost 2% to $2.4bn, but pre-tax income was down slightly year-on-year. Latin America remains the group's biggest market for oral, personal and home care products, with revenues (excluding Hill's) of $3.61bn in 2018. North America contributed $3.35bn.
Colgate-Palmolive is one of the world's longest-established manufacturers, and celebrated its 200th anniversary in 2006. The business was established in New York City in 1806 by William Colgate, the son of an Englishman who had emigrated to the newly independent America with his family only a decade or so before. The younger Colgate learned his trade with his father in Baltimore, before moving to New York to set up on his own, making "Soap, Mould & Dipt Candles", as well as Pearl Starch. Soap quickly became one of the company's main lines, and Colgate began to perfume its products towards the middle of the century. William Colgate died in 1857, passing control to his son Samuel, who established Cashmere Bouquet as one of the country's leading perfumed soaps. By the early 1870s, Colgate & Company had begun to look for other products it could sell through pharmacies.
A logical natural step forward was dental cream. Toothpaste was at the time a comparatively little used substance, other than among the wealthy. Most people used bicarbonate of soda, rubbed on by hand, but gradually individual chemists had begun to mix their own "creme dentifrice", mixing the soda with glycerine to make a paste and adding other substances as varied as chalk, borax and even sugar. These pastes gained popularity during the second half of the 19th century. Colgate introduced its first mass-produced dental cream in 1873, with some success. Initially it was sold in a small earthenware jar, but towards the end of the century, the company borrowed the process developed by a Connecticut dentist, Dr Washington Sheffield, to package paste in a collapsible soft tin tube, the predecessor to the plastic tubes used today. This new packaging joined what was already a huge range of almost 3,000 products sold by Colgate, including 625 different perfumes and 160 types of toilet soap.
At around the same time, The BJ Johnson Soap Company of Milwaukee had introduced a green bath soap made from a mixture of palm and olive oils. It was initially designed to float, in emulation of Procter & Gamble's extraordinarily successful Ivory, but failed to made significant inroads into the more established brand's sales. As a result, the product was reformulated to be heavier and more exotic. It was relaunched from around 1905 as a rival to imported French toilet soaps, with an aggressive marketing campaign masterminded by the Lord & Thomas agency. This approach proved far more popular. The brand quickly established itself, and Johnson's changed its name in 1916 to The Palmolive Company. Ten years later Palmolive took over another soap company, Kansas-based Peet Brothers, best-known for its Crystal White laundry soap, and was itself engulfed by Colgate in 1928 to form Colgate-Palmolive-Peet. This was by now a substantial international company. Colgate had begun to sell its dental creams in Britain from 1908, while Palmolive had been introduced to the country through branches of Boots The Chemist since 1913. By the end of the 1920s, the combined group had offices throughout Europe, as well as in Latin America, Asia and South Africa.
Following the Second World War, Colgate-Palmolive-Peet (as it was known until 1953) diversified into household cleaners, launching Ajax and Fab. The company also established new manufacturing bases in Europe and the Far East, buying up local soap makers. Washing-up liquid was launched under the Palmolive brand in 1966, and by the following year group sales had topped $1bn a year. The move into petfoods came in 1976, with the acquisition of Hill's. A number of other businesses were acquired, including the Helena Rubinstein cosmetics company, but most of these were sold off in a company-wide restructuring during the 1980s.
In 1985, Colgate developed its Asian business by taking a 50% stake in local toothpaste brand Darkie. The name was changed four years later to Darlie after complaints over the name and its "gollywog" branding. In 1987, Colgate broadened its soap range to include liquid soaps, marketed through its Softsoap Enterprises subsidiary. Other acquisitions included Javex Bleach (1990), Murphy Oil Soap wood cleaner and international rights to Pfizer's Plax mouthwash (1991). In 1992, the company acquired deodorant business Mennen, and bolstered its liquid soaps business with SC Johnson's European soap business the following year. In 1995, the company bought $300m Latin American oral care business Kolynos from American Home Products for $1bn, and Argentinean business Odol Saic.
The company set an advertising industry precedent in 1995, when it consolidated all its worldwide advertising with Young & Rubicam. In 1997 it began a $100m marketing assault in the US to support the launch of its new Colgate Total toothpaste, already available internationally. The success of the brand gave Colgate market leadership in the US over Procter & Gamble's Crest for the first time since the 1950s. In 1999, the group launched a new range of Palmolive Naturals spray antiperspirants across central and eastern Europe and the Far East, in a bid to dent market share of leaders P&G and Unilever. Later that year the group was forced to recall almost 114,000 tubes of Ultra-Brite toothpaste in France after finding evidence of bacterial contamination in samples. At the end of 2000, the group pulled out of the detergent business in Mexico, selling its Viva brand to Henkel.
In 2004 the group announced plans for a major global restructuring program, cutting up to 12% of jobs and almost a third of its factories worldwide by 2008.
Last full revision 22nd November 2017
* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *
All rights reserved © Mind Advertising Ltd 1998-2021