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Colgate vs Crest

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Colgate vs Crest. It's one of those FMCG battles the marketing industry loves to love, like Coke vs Pepsi or Big Mac vs Whopper. Procter & Gamble's Crest spent 40 years as America's favourite toothpaste before being unceremoniously kicked from the top spot in 1998 by Colgate-Palmolive's Colgate. In fact the battle is more than a little uneven. Colgate has long been the undisputed champion in the global market, the #1 toothpaste brand worldwide with market leadership in more than 170 countries and global sales of around $2bn. The US had been one of its few weak spots, the only significant market where it was forced to put up with the #2 place. All that changed with the launch of Colgate Total, which seized leadership of the sector as a result of an unprecedented endorsement from the FDA. P&G has been fighting back ever since, broadening its attack by expanding into other oral health segments such as whitening, floss, mouthwash and toothbrushes. After almost a decade of fierce competition, Crest regained the #1 position in the US during 2007, only to lose it once more in 2016.

Competitors

See Personal Care index for other companies and brands.

Analysis

Colgate is the world's best-selling toothpaste, the #1 brand in virtually every market in which it is available, often by a considerable margin. Its lead is, if anything, growing. Colgate-Palmolive's global market share peaked in early 2015 at a record of the global toothpaste market, more than its three largest competitors combined. That figure has slipped back slightly, but the company remains comfortably ahead of all its competitors. For 3Q 2017, the figure was 43.5% global share. P&G was #2 with 14.1%, followed by GlaxoSmithKline (12.7%) and Unilever (8.1%).

In some countries, its share is even higher. In the UK, for example, Colgate held over 46% value share by mid-2017, according to Nielsen, more than both its main rivals combined. Its lead is even stronger in Latin America, where share averages around 79% across the whole region, including 72% in the biggest local market of Brazil (in 2Q 2017) and as much as 83% in Mexico. In India, Colgate has 52% share of the local toothpaste market, almost 31% in China, more than 31% in Russia, over 51% in South Africa and nearly 62% in Australia.

Until 1998, virtually the only market where it did not reign supreme was the US, where Crest had held the #1 spot for more than 40 years. That year, however, P&G's supremacy was finally challenged, and Crest was overtaken by Colgate. It was not long before P&G responded with a barrage of new products, which finally clawed back Crest's lead in 2007. The two brands remain fierce rivals. In 2016, Colgate won back local leadership for the first time in almost a decade. By mid 2017, it claimed 35.6% share of the US toothpaste market, ahead of Crest on 34.6%.

Kantar's Brandz ranking placed Colgate as the world's second most valuable personal care brand in 2017 (behind L'Oreal Paris), with an estimated value of almost $18bn. Crest was some way behind, the #12 among personal care brands at $3.3bn.

In the US, Colgate now comprises 12 different product families within the toothpaste range alone. The most important of these is Colgate Total, offering a complete range of benefits to tackle all common oral complaints. Supporting families, each available in several formulations or flavours, include Colgate Max Fresh, Colgate Sensitive, Colgate 2in1, Colgate Tartar Protection, Colgate Baking Soda & Peroxide and Colgate Maximum Cavity Protection, and a variety of whitening ranges such as Colgate ProClinical White, Colgate Sparkling White, Colgate Luminous and most recent launch Optic White, introduced in 2011. There are also various kids' brands co-branded with characters including Dora The Explorer and Transformers. The Colgate range varies from market to market, with most international territories housing fewer varieties, as well as locally specialized products, such as Colgate Herbal, now manufactured in Brazil but distributed to more than 50 countries. In Russia and China, as well as other markets, the group produces a specialized variant, Colgate Propolis, containing a substance collected by bees thought to have natural healing qualities.

The group also manages several local brands as well. These include Ultrabrite (the US and UK), Sorriso (Latin America), Kolynos (Latin America and Eastern Europe), Tandy (Latin America), Dentagard (Europe), Colodent (Eastern Europe), Darlie (Asia) and Savacol (Australia). At the start of 2004 the group agreed to pay up to $830m to acquire Swiss-based oral care group GABA, whose brands include Elmex and Meridol. GABA's brands are marketed in Switzerland, France, Italy, and especially Germany, where it is the #2 in the market behind GlaxoSmithKline. In 2006, Colgate paid around $100m to buy the leading US natural oral care brand Tom's of Maine, made entirely without artificial or animal ingredients or chemicals. (See Colgate-Palmolive profile).

Procter & Gamble's Crest has a similarly broad portfolio. Crest and Crest Multicare are supported by more than 15 different variants, including Cavity Protection, Tartar Protection, Whitening, Baking Soda, flavours, gels, pastes and a range incorporating the company's mouthwash brand Scope. In 2006, P&G launched what it says is its most compelling toothpaste product yet, Crest Pro-Health, which claims to fight all seven major oral health problems in one. This was followed by Crest Nature's Expressions in early 2007, which offers added natural ingredients such as peppermint oil, mint and green tea or lemon extracts. New for 2008 was Crest Weekly Clean, an intensive cleaning paste designed to be used once a week for a "just-from-the-dentist" clean feeling. Crest's latest assault on the variants segment launched in 2014 with the introduction of Crest Be Inspired, a selection of three "fashion" flavours - Mint Chocolate Trek, Vanilla Mint Spark and Lime Spearmint Zest - in stylish new packaging.

Crest is also available in several other countries worldwide - its biggest international market is China - but its combined market share is low. Colgate, on the other hand, has the #1 position in virtually every other market. P&G's attempts to establish the Crest brand in other countries have been largely unsuccessful, but it scored considerably greater success, especially in Europe, with the regional launch of toothpastes linked to its already well-established Oral-B toothbrush range. These are marketed in three product families of Oral B Pro-Expert, Oral-B Complete and Oral-B 3D White. Broadly speaking, they are in all but name the same products marketed in the US under the name Crest. P&G also controls some other regional oral care brands, including Blend-a-med, a leading toothpaste in Germany, which has a similar range of variants. However market share remains low. Combined sales for Crest were estimated by Euromonitor & Sanford Bernstein at $2.0bn in 2013, with an additional $273m from Blend-a-Med.

In an attempt to win back a leading position in the oral care sector, P&G shifted the battle from 2000 onwards into other, higher value markets. First of these was the electric toothbrush sector. This segment was actually rejuvenated by Colgate, who introduced their Colgate Actibrush worldwide in early 2000. At the time, powered products accounted for only around 4% of the toothbrush market. A lower priced battery-operated version was launched as Colgate Motion. Sales grew quickly, and P&G responded later the same year by acquiring a small independent manufacturer, Dr John's Products. This range was relaunched nationally as the Crest SpinBrush, and built up almost 23% share by 2004, behind Oral B's powered range (with 36%), and Philips' Sonicare (33%), but well ahead of Colgate, whose share had dwindled to just 5%. Colgate later discontinued its higher-priced ActiBrush in the US market (but not elsewhere around the world) to concentrate on battery-powered products.

P&G, meanwhile, raised its game at the upper end of the market in 2004, with the formation of an alliance with Philips to market the IntelliClean oral care system, a version of Philips' top of the range Sonicare electric brush preloaded with liquid Crest toothpaste. However the definitive blow to Colgate's position came with P&G's acquisition of Oral B as part of Gillette. As a result, the SpinBrush brand was sold to Church & Dwight in 2005. All P&G's adult manual and powered toothbrushes are now sold under the Oral B brand, although it still sells some kids brushes under the Crest name. Colgate's range includes the battery-powered 360 Sonic Power, which emits sonic vibrations, and also features tongue and cheek cleaners; and the Colgate Wisp disposable mini-brush, launched in Spring 2009, and designed for portable "on the go" cleansing. In 2012, Colgate re-entered the electric toothbrush sector with a range of sophisticated brushes manufactured by medical equipment specialist Omron. These are marketed under the Colgate Professional banner, although they're marketed towards consumers. Colgate still holds the lead in the manual segment, worldwide with almost 33% global share for 2017, to P&G's 18%.

Another fierce battleground was the oral cosmetic market. Crest Whitestrips were introduced in 2001 and quickly claimed to have captured more than half of the the tooth polish and powder segment. A genuinely innovative new product, these strips were applied to the teeth like a band-aid for 30 minutes twice a day to visibly whiten the enamel. A year later Colgate responded with its own cosmetic whitener, Colgate Simply White, a paint-on gel, pitched at half Whitestrips' price. The two companies have introduced a series of further variants since then, but P&G took the lead in the sector, achieving a dominant 70%-plus share by 2007. As a result Colgate surrendered the field, discontinuing its cheaper specialist products. It still markets the Visible White professional cleaning kit, designed for consumer use at home but sold through dental surgeries. Crest expanded its Whitestrips portfolio in 2010 with the launch of Crest 3D Whitestrips, which bundles Whitestrips with the company's Oral-B toothbrushes.

Crest broadened its position in oral care further with the acquisition of Glide dental floss, now Crest Glide, and opened up a new front against mouthwash Listerine (then owned by Pfizer, now Johnson & Johnson) with the launch of Crest Pro-Health alcohol-free mouthwash. The group already markets Scope mouthwash. Colgate is also active in the mouthwash sector, with Colgate Plax available in a number of global markets, as well as more specialised over-the-counter oral cleansers and treatments, and as prescription products. A separate Colgate Total mouthwash launched in the US for the first time in 2013 to considerable success.

Background

Colgate was the world's first commercial toothpaste, in the sense that we know it now. Colgate Dental Cream was first introduced in 1873, originally in tins, and from around 1896 was being sold in soft lead tubes similar to those we use today. (See Colgate-Palmolive profile for more). However very little was known about the bacteria that inhabit the human mouth, so for many years dental creams were effectively just a form of flavoured soap for the mouth. Although they provided a superficial cleansing they had virtually no lasting therapeutic benefits and offered no protection against gum disease, cavities and other ailments. This was still the case even as late as the early 1950s.

The breakthrough came in 1955. Fluoride had first been identified as a substance which reduced tooth decay in 1928 when it was found that children living in areas where the chemical occurred naturally in drinking water experienced noticeably fewer cavities. During the 1940s Procter & Gamble, long established as a maker of soaps and detergents, began attempts to incorporate fluoride into a toothpaste. The company's researchers tested more than 500 compounds before settling on stannous fluoride as the most effective ingredient. A field research study was initiated in 1950 in partnership with the University of Indiana, and demonstrated remarkable success, showing a reduction of almost 50% in cavities in both adults and children using the new paste. Emboldened by this success, P&G test-launched Crest in 1955. This truly revolutionary product was to have a permanent beneficial effect on the world's dental health. The toothpaste was packaged in a bold red, white and blue box, and was supported by a classic ad campaign, painted by artist Norman Rockwell, in which an all-American boy proudly boasts, "Look, Ma... No cavities" after a visit to the dentist.

However the great American public was not convinced and Crest initially achieved only modest sales. Certain that they could prove the benefits of Crest, P&G executives commissioned extensive clinical trials of the product and mounted a huge lobbying campaign targeting dentists and health associations. Finally, in an unprecedented step, the American Dental Association was persuaded in 1960 to give Crest its first-ever product endorsement. This seal of approval at last guaranteed the new brand's success. Within a single year Crest's sales doubled, and then tripled the year after that, making the brand the #1 toothpaste in America. It was to be one of the bed-rocks of the company's growth over the next two decades. Better still, patent protection gave Crest its own lasting ring of confidence. Colgate was prevented from introducing a rival fluoride toothpaste in the US until 1967, by which time, Crest's market dominance was unassailable. In the mean time Colgate fought back by promising to keep breath fresh, with its popular "ring of confidence" marketing campaign.

Times changed, but unfortunately Crest did not. By the 1990s, all toothpastes offered fluoride protection, and consumers had a new set of oral health fears to worry about - yellowing or stained teeth, plaque, bad breath, sensitive gums. Other toothpaste manufacturers responded with a flood of new products with added ingredients to counter this array of evils. In the 1970s, for example, plaque was the dominant theme; replaced by tartar staining in the 1980s. Despite the changing market, Procter & Gamble rested on its laurels, leaving the Crest formula virtually unaltered. Among the handful of product updates were a gel variant introduced in 1980, followed by Crest Advanced Formula (with sodium fluoride replacing the original tannous fluoride) in 1981. In 1985 the company belatedly introduced a Tartar Control version. Yet in 1987, Crest's share of the US toothpaste sector was still 39%.

The real challenge came during the 1990s. Arm & Hammer had created an entirely new segment of the market in the late 1980s with the introduction of toothpastes formulated with baking soda and even peroxide, which appeared to provide a thorough cleansing and whitening effect. This sector grew very rapidly indeed, especially after the entrance of Unilever into the market with its Mentadent baking soda and peroxide formulation. By mid-decade baking soda toothpaste had suddenly come to account for around a third of the market as a whole. Colgate and Crest were in fact both caught out by this new trend. Colgate introduced its own variant in 1995, but P&G again chose to stay out of the market. This time, the damage was impossible to ignore. Despite the introduction of Crest Multicare for healthy gums in 1996, Crest's share of the US market had fallen to just 25% by 1997.

Meanwhile, Colgate had been developing a powerful new product of its own. Restricted by Crest's patent protection in the US, Colgate had concentrated on developing its international profile instead, quickly establishing an unrivalled dominance of virtually every global market. The company had already introduced a new formulation of its main toothpaste brand in selected international markets, starting with the UK in 1993. Branded as Colgate Total, this product combated not one but all three of the most common oral care complaints. It contained Triclosan, an antibiotic which killed various bacteria including those responsible for the gum disease gingivitis, as well as a bonding agent which cemented Triclosan to the teeth, giving protection which lasted for up to 12 hours. By 1997 Colgate Total had been introduced with great success into more than 100 international markets.

The US was the last market to crack primarily because, borrowing a leaf out of Procter & Gamble's book, Colgate had spent four years negotiating a seal of approval from the Food & Drug Administration. This was finally granted in 1997, the first (and so far only) time the FDA had ever given its endorsement to a toothpaste. Just as this had proved a clincher for Crest 30 years earlier, so it was for Colgate Total. In December 1997, Colgate Total launched into the US with a massive $100m marketing campaign and within just four months overtook Crest to become the #1 US toothpaste brand, notching up a 30% share. It was a humiliating defeat for Procter & Gamble, so much so that the company even sent out thousands of telegrams to dentists disputing the veracity of Colgate's clinical trials. Being a bad loser, however, was not enough to change the situation. (P&G was later forced to retract its accusations).

After several years of evaluation, during which P&G introduced several new formulations of Crest, the company instead chose to tackle the market from a more oblique angle. Crest has now become a more broadly based brand, encompassing a wide variety of oral care products.

Last full revision 23rd January 2018

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