Procter & Gamble (NYSE:PG) is one of the global leaders in oral hygiene. Its market share stands next only to oral care giant Colgate-Palmolive (NYSE:CL), which commands slightly less than 27% of the global oral care market. P&G has approximately 20% share of the market by our estimates. Its oral care division, which includes leading brands such as Crest and Oral-B, contributes about 6% to P&G’s net sales and forms an important part of the company’s overall portfolio.
Due to an increased focus on core developed markets over faster growing developing economies, P&G has conceded its share of the oral care industry to competitors such as Colgate-Palmolive and Unilever (NYSE:UL) in the past two fiscal years. However, the company has now shifted its focus towards global expansion of the oral care business, and has entered 40 countries in the last four years. It has also hired singer and two time Grammy award winner, Shakira, to promote its Crest 3D White and Oral-B brands around the world through print, TV and online advertising. 
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New Product Launches Will Help Capture Share In Emerging Economies
Growing awareness about oral hygiene, more advertising by big players as well as population and income growth are driving the robust expansion of the oral care industry in emerging markets. To leverage the trend, P&G is expanding its reach in these markets by launching new products. It launched the Crest 3D White toothpaste with Whitestrips in Brazil in Q2 2013, which resulted in 50% growth in oral care shipments to the country. Oral-B’s share of the Brazilian toothpaste market also increased to 9% during the quarter.  Demand for oral care products in the country is expected to continue rising in the foreseeable future. According to Eurmonitor, the oral care market in Brazil will grow at a CAGR of 8% during 2012–2017. 
P&G also recently forayed into the Indian toothpaste market with the launch of Oral-B Pro-Health.  The market size of toothpastes alone is estimated to be around $1 billion in the country. Although Colgate-Palmolive dominates the oral hygiene market in India with a share of over 50%, there is immense potential for P&G to build a substantial presence as the market is expected to grow at a CAGR of 14% during 2011–2015. 
Innovation Is Driving Market Share Growth In Developed Markets
P&G has constantly focused on innovation to address the needs of customers by providing them value-added benefits in its products. The company launched the Oral-B Deep Sweep power brush in Q2 2013 in the U.S. The toothbrush moves like a manual brush but offers twice the protection from plaque.  It also launched Crest and Oral-B ‘Pro-Health For Life’ range of products to cater to the aging 50+ population. Innovations across the 3D White, Pro-Health and Crest product lines have helped the company become the oral care leader in the U.S. where it now has an outlet value share of about 37% in toothpastes. In our view, such innovations will continue to be the key to P&G’s growth in developed markets.Notes:
- Shakira Named New Global Ambassador Across The Worlwide 3D White Collection From Oral-B and Crest, P&G press release, July 23, 2013 [↩]
- P&G Q2 2013 Earnings Call Transcript, January 25, 2013 [↩] [↩]
- Oral Care In Brazil, Euromonitor, August 2013 [↩]
- P&G Enters Indian ToothPaste Market With Oral-B Pro Health, July 2, 2013 [↩]
- Indian Oral Care Market Forecast To 2015, Research and Markets, June 2012 [↩]