The Oral Care category is seeing a host of brands launching several variants with value additions to provide solutions to consumers with specific dental care needs.
From toothpastes that offer teeth whitening, protection from sensitivity, and bad breath, to toothbrushes for sensitive teeth and for smokers, to mouthwash, chewing gum and floss, the oral care category is seeing brands launching several variants to reach a specific set of consumers. Never mind what marketing gurus have to say about ‘cannibalising’ one’s own customers!
Not so long ago, Close-up, Pepsodent, Colgate, Cibaca, etc, were popular brands in the segment. Vicco, Dabur and Miswak entered the space and introduced Ayurvedic and herbal toothpastes. With competion heating up brands began offering toothpastes that offered solutions for gum problems, bad breath, and some even promising an all-in-one solution like the Oral B Pro-Health, a specially formulated toothpaste for Indians by Procter & Gamble.
Mouthwash entered the space promising additional oral care, and was pegged/advertised by the marketers as being necessary to ensure bad breath-free ‘proximity’ – personal or professional, inducing consumers to reach for it along with their regular brand of paste and brush.
Not to be left behind, the humble toothbrush emerged with super soft bristles and boar bristles. Colgate launched a toothbrush with whitening cups and polishing bristles that help remove surface stains.
Points out Ankur Gupta, Head – Marketing, Ken Research, “The oral care industry in India has been largely dominated by the toothpaste segment, which contributed the lion share of the overall revenue of the industry in FY’2013. Toothbrush is the second largest oral care product segment in the industry after toothpaste, and offers both manual and electric brushes.”
Understanding the market
According to Gupta: “The Indian oral care industry, over the last few years, has been one of the fastest growing FMCG sectors. The industry has recently undergone a major transition with rising population, entry of international players in the space, and introduction of value-added products. This has considerably changed consumer preferences as they are offered a wider variety of products to choose from.”
Though the Indian oral care market has escalated at a double digit CAGR of 14.4 percent from FY 2008 to FY 2013, Gupta feels that there is still a long way to go. “The per capita consumption is still low in India as compared to USA, Brazil and China. At present, nearly 55 percent of the country’s overall population uses toothpaste, out of which, only 15 percent brush twice a day against nearly 85.1 percent in developed countries,” he says.
The segment is changing and growing as manufacturers make value additions to their basic products. Affirms Kuldeep Goyal, Vice President – Merchandising (Foods) at Spencers Retail, “The last five years have seen some breakthrough innovations and creation of new toothpaste variants like Whitening and Sensitivity.”
GSK introduced Sensodyne toothpaste for sensitive teeth in 2011, which further expanded the industry during 2010-2011.
Says Star Bazaar’s CEO, Jamshed Daboo, “The category has witnessed a lot of changes in the past two years with several new variants being launched. They promise teeth whitening, reduced sensitivity to hot/cold/sweet drinks, etc, and are positioned as solution providers, that is, they offer to meet the specific needs of consumers, who are ready to pay a premium for them.”
“Two years ago, pastes offering Family and Freshness used to contribute 55 percent of toothpaste sales, but their sales are expected to come down by 6.5 percent, while products offering teeth whitening, protection from sensitivity, or multi-benefits, will lead the category,” he adds.
With an upswing in demand and penetration of various brands, homegrown brands like Dabur are also focusing on enhancing their product portfolio, but without losing their core essence. Says Rana Banerjee, Category Head- Oral Care, Dabur India, “The toothpaste market in India is witnessing a marked shift in consumer behaviour, which is driving growth in this highly penetrated category. This growth is largely driven by a higher degree conversion from non-dentifrice users to dentifrice products. We are seeing people shifting from datun and other such homemade options, thanks to growing awareness, aspirations and affluence, particularly in rural India.”
He adds, “Also, there is a growing preference for natural products. This shift has helped Dabur, whose portfolio comprises of Ayurvedic and natural products; these have registered strong growth over the past 5 years, and our market share has grown from 2 to 4 percent to 10 percent. However, the fact remains that night brushing as a habit is not common in the country; developing this would further accelerate growth for the oral care market.”
Ponnu Subramanian, Senior VP – B&M (Foods) and SCM, Max Hypermarket India, informs that better quality and high-end dental care products are already contributing over 60 percent sales in organised retail, and this trend will only grow in the future. But growth has been slightly muted in the Ayurvedic segment as there is not enough action in terms of launches or share of voice in media. Even from a retailer perspective, the net realisation in terms of sale per piece or profitability is much lesser as compared to other variants.
Brands that are strong in herbal toothpaste offerings include Dabur Lal, Colgate Herbal, Meswak, Babool and Neem. Herbal brands comprise close to 5 percent of the overall toothpaste category.
According to Banerjee, the overall oral care market in India is estimated to be over Rs 7,000 crore. “The toothpaste market in India has grown by an average 7 percent over the past five years. However, Dabur’s toothpaste portfolio, with its highly differentiated offerings, has been growing at nearly double the industry average during the same period,” he informs.
The growing organised food and grocery retailing is encouraging proliferation of oral care products, especially in urban areas. “Both Modern Retail and Mom & Pop stores are serving the specific needs of consumers. While Modern Trade has surely altered the retail landscape in India, a bulk of FMCG sales still comes from traditional trade. Regardless of consumers’ lifestyles, the kirana stores continue to serve consumers as before, probably with a significant change in the range of products stocked. So, the importance of neighbourhood stores and traditional trade still remains,” comments Banerjee.
At Star Bazaar, the category contributes about 12 percent in the health and beauty segment. Says Daboo, “The size of the oral care category in urban areas is about Rs 5,300 crore, of which, toothpaste comprises 70 percent, toothbrush 20 percent, and mouthwash 2.8 percent. The segment has grown by 8.5 percent in urban areas in both General and Modern Trade, especially in the last two years.”
Goyal informs that at Spencer’s the shelf space allocated to oral care products is close to 80-100 running feet. This has increased from 50 to 60 running feet over the last 5 years, mainly due to new launches and innovations in the category.
At Auchan stores, the shelf space allocated to oral care products varies from 5 to 6 bays depending on the size of the store. Informs Subramanian. “Each bay has 5 shelves with 4 feet running space, so there is 100 to120 running feet. The space is a function of the number of skus to stock, overall category sale, and profitability of the category. Category growth and profitability have been very positive and we have seen all top brands launching new ranges in the last few years. So it is natural that space would have increased too. But because of the fixed amount of shelves available, the increase in space may not have been exponential; it would be around 20 percent.”
Rural trends and preferences
Brands are also increasing their focus on rural areas. According to Ken Research, rural markets have been witnessing rapid growth in the past four to five years.The monthly per capita expenditure of 13.2 percent during 2009-2012, increased to 17.2 percent during 2004 to 2010. With rising disposable income, rural consumers have increased their expenditure on FMCG products, including dental care products.
Subramanian is of the opinion that there is a greater acceptance of specialised products such as Whitening and Sensitivity in northern India compared to the south. Southern India is still somewhat conservative as regards consumer behaviour with most customers sticking to multi-benefit and basic toothpastes, but this would change in times to come.
In Daboo’s view, sale of toothpastes with salt are higher in the South as compared to other regions. Affirms Goyal, “Toothpaste definitely sees regional inclinations. South is heavy on flavours like salt, while the East is an established market for Whitening, given its more beauty conscious shoppers. Over and above this, markets are price point sensitive depending on the catchment they cater to. For toothbrushes, however, the choices are more lifestyle dependent than regionally influenced. While rural habits are still towards hard brushing, you’d see more inclination towards gum friendly, need specific, and soft bristles in urban India.”
Connecting with consumers
Almost all TV commercials feature a dentist advising consumers on dental care. Brands also undertake dental drives, and give free samples to dentists to pass on to their patients. As regards promotions in food and grocery stores, Goyal shares, “Category focussed activity in partnership with leading brands has helped the category grow in terms of overall value, along with healthy organic growth. These activities are also supported by consumer-centric promotions such as dental health check that provide shoppers an added benefit while shopping.”
Daboo adds, “Premium segments like a whitening toothpaste reaches consumers through beauty magazines (example, Cover Girl Programme – Colgate Visible White). Brands reach out to kids by educating them about oral hygiene and the importance of brushing twice daily (for example, Colgate’s tooth defender activity).”
“Dabur has put in place special efforts to drive penetration and sales. Our initiatives towards developing right sized skus and addressing specific price points to create greater affordability in the market has helped us drive penetration of our products,” says Banerjee. He informs that Dabur rolled out a series of school contact programmes that sought to increase oral hygiene awareness among nearly two crore children across the country. Dental camps were also organised to teach children about dental care practices. This initiative covered both modern urban schools and local rural schools. Dabur also roped in the Society for Dental Care and dentists to run similar camps in the interiors of India.
With so many brands and variants on store shelves, packaging plays an important role in attracting attention to the brand. Says Daboo, “Brands have started coming up with clutter breaking packaging, which also gives the product a premium look and differentiates it from other brands. Colgate Visible White came with a vertical stand up tube vis-a vis the horizontal tube. We also had many brands offering the white strip test to test the ‘visible’ difference when it came to their brand promising whiter teeth!”
Subramanian adds, “This is currently the most competitive category where biggies like Colgate, HUL, GSK, Dabur and P&G are operating. The aggression to stand out in store shelves through visual merchandising has also increased. This has led to innovative merchandising, and cross merchandising of oral care products to provide multi touchpoints to customers.” He adds, “There is also a change in customer behaviour where a household is using multiple products giving multiple benefits at the same time. So there has been a gravitation towards specialised products.”
According to Banerjee, “Dabur India operates in the toothpaste market with a highly differentiated product portfolio viz Dabur Red Toothpaste, Babool and Meswak, and each of these products are marketed on the basis of the efficacy and unique propositions that they offer. Our USP is the presence of natural ingredients and Ayurvedic formulations that have helped us drive demand for our brands, and giving us the strategic advantage in an otherwise competitive market. With this portfolio, Dabur offers effective oral hygiene solutions for every Indian consumer, who generally seeks products based on his/her specific needs, and our products provide the the desired solutions.”
Message to brands
“Brands should focus on educating customers with clear communication as regards usage and benefits of their products,” says Goyal.
Daboo feels that it is detrimental for brands to launch too many skus. “It is important that brands don’t clutter the segment so that consumers don’t get confused.”
Advises Subramanian, “Standing out in the category is extremely important. Innovative displays are critical. Quality of promoters to ensure right display on shelves and other visibility units play a key role in winning inside the store. Cross category placements provide multiple touchpoints. Right standard of service (SOS) in the store, eye level placement on shelves, and creating excitement with activations in the category are critical.”
According to Banerjee, Dabur Red Paste, with its strongly differentiated positioning and problem solving properties, has emerged as the fastest growing toothpaste brand in the country. It crossed the Rs 200-crore turnover mark during the year, becoming the fastest brand to achieve this landmark. The brand launched a mega exchange offer, the biggest-ever by any brand, which helped generate fresh trials and win a whole new set of consumers. The company received over a million entries for this exchange offer.
Adds Goyal, “The consumer today is ready to spend more on better quality oral care products. They have higher disposable incomes, besides whch, they are more aware and health conscious. At Spencers, the category contributed 13 percent to the total Health & Beauty sales in 2013-14. In the previous fiscal, it was 11 percent.”
The Oral Care industry has been witnessing many trends and new developments in recent years, all of which are driving its growth. New product innovations have added value, and users are adding mouthwashes, dental rinses, and dental floss to their shopping basket. Along with brand extensions, leading players are extending reach across the country. They are introducing products that meet regional tastes; increasing awareness with attractive displays and promotions at the retail end, and launching aggressive advertising to establish their brands more strongly.
According to Rohit Gupta, the Indian oral care industry is still at a nascent stage, but it offers immense growth opportunities as the penetration level is still low. Increasing demand for advanced oral care products is set to boost sales, while increasing awareness of oral care in rural India will also be a major factor for driving growth.