Colgate-Palmolive India is embarking on an expansion journey beyond its traditional portfolio of oral care, with a strategic focus on entering the personal care domain through potential acquisitions, as highlighted by the company's management on Tuesday. MS Jacob, the Chief Financial Officer of Colgate-Palmolive, emphasised the company's careful consideration of this move, mentioning the active exploration of opportunities.

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Responding to a question by CNBC-TV18, Jacob said, "Prabha and I have been traveling across the country, meeting both legacy and direct-to-consumer (D2C) companies. We will share updates with the public when we have substantial developments." Prabha Narasimhan, the managing director and CEO of Colgate-Palmolive, further reinforced the company's strong intention to diversify its portfolio.

Since Prabha Narasimhan assumed leadership last year, expanding the Palmolive portfolio has been a pivotal aspect of the company's strategic pillars, with acquisitions being an integral part of this growth strategy. While no acquisitions have occurred yet within the Indian market, Colgate-Palmolive Asia's Hong Kong arm made headlines in 2018 by acquiring a minority stake of approximately 14 percent in the men's grooming brand Bombay Shaving Company as part of a series A funding.

In the most recent quarter, Colgate-Palmolive witnessed a robust 12.3 percent growth in domestic sales, primarily driven by double-digit growth in toothpaste sales. Presently, Colgate-Palmolive's primary focus is oral care, encompassing toothpaste and toothbrushes. As the company continues to explore new avenues, its aspiration to expand its offerings to encompass personal care remains a pivotal aspect of its strategic evolution.

During an investor call in May, the CFO had said the share of the non-personal care segment (Palmolive), has stayed at low single digits over time, and is not more material.

However, Narasimhan now sees the Palmolive category having the potential to grow at least twice as fast compared to the rest of the company. And the company expects the share of the personal care business to the total business to inch up in the coming years as it expands this portfolio.

"Palmolive is an underserved equity in our portfolio," Narasimhan said, adding that the company identifies body wash as a nascent category with a massive scope to grow, given that the penetration of body wash currently is just two percent across India.

Presently, Colgate-Palmolive's non-oral care presence in India is defined by two categories—handwashes and bodywashes under the Palmolive brand. Narasimhan highlights the differing strategies for the oral care and Palmolive portfolios: while oral care seeks increased consumption, Palmolive's goal is to expand its footprint into new households.

In the Indian market, body washes or shower gels are primarily an urban, premium product with less than two percent penetration across the nation. Key FMCG players, including HUL and ITC, already have a stake in this segment with brands like Dove and Pears. A variety of personal care companies and D2C brands also operate within this sphere. Colgate anticipates growth in this category as premiumisation takes root.

In the hand wash domain, brands like Dettol, Lifebuoy, Savlon, Protekt, and Palmolive dominate the market. As part of its strategy, Colgate aims to introduce additional brands from the global Palmolive portfolio into India. Narasimhan affirms, "We have a wider range of Palmolive products outside the country, so we will bring the most suitable offerings to India."

Beyond personal care, Colgate is evaluating the potential for categories like hair care, home care, and pet care to be introduced to the Indian market from the global product lineup. Narasimhan acknowledges the company's global presence in diverse categories such as shower creams, liquid handwashes, shampoos, deodorants, and bar soaps. Additionally, Colgate participates in the home care sector with brands like Ajax, Axion, Soupline, Suavitel, and Fabuloso, along with a presence in pet nutrition through the Hills brand.

First Published:Aug 23, 2023 12:04 PM IST