Inside Colgate’s Initiative to Expand Sanex in Europe

Will Colgate's Leadership Shuffle Mean More Progress to Come?

(Continued from Prior Part)

Growth of Hill’s business

Colgate-Palmolive’s (CL) Hill’s business has been organically growing mid-single digits consistently, due to company’s innovation pipeline in Hill’s. The company introduced Derm Defense with a formulation that reduces the sign of environmental allergies on pets. And the unique technology is believed to be delicious.

Also, the number of small pets are growing as a percentage of the total pet population in urban areas. Hence, Colgate launched a balanced nutrition product for small and toy dog breeds. Unilever (UL), Clorox (CLX), and Kimberly-Clark (KMB) do not have a presence in pet nutrition.

Sanex’s expansion

Colgate acquired its personal care brand Sanex several years ago, with the intention to expand over time to more countries. Recently, Sanex was introduced to Norway. The second strategy with Sanex is to broaden its portfolio of products and move into skincare.The three segments focused on skincare include the following:

The three segments focused on skincare include the following:

• facial cleansers, which is ~15 billion category globally

• acne, which is ~4 billion category globally

• hand and body lotion, which is ~18 billion category globally

As a result, the company introduced hand and body lotion under the brand Sanex Advanced, delivering skin expertise for every need. The product has three variants: Hydrate 24h, AtopiDerm, and DermoRepair.

The Hydrate product is to address dry skin that is unable to retain moisture. The Atopiderm range of products smooths the itchiness of the skin because it deposits identical lipids and emollients to the skin. The DermoRepair treats where pH has been disrupted on the skin.

France, the lead market

The company plans to expand Sanex in France as well as other European locations. Colgate is offering skin diagnosis to in-store pharmacies and other larger outlets in France. Sanex has approached 10% retail (XRT) market share in France, driven by Sanex body wash, which is recommended by a number of the dermatologists.

According to Colgate CEO Ian Cook, the repeat rate of these products is 42%, which makes it easier for Colgate to expand Sanex hand and body lotion.

Now let’s look at the company’s commercial strategies.

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Browse this series on Market Realist:

• Part 1 - Colgate Announces Eventual Successors, Stock Reacts

• Part 2 - Key Takeaways from Colgate’s Update at Investor Conference

• Part 3 - Behind the Rise in Colgate’s 4Q15 Gross Margin, after 3-Year Plateau