Friday, October 31, 2003

US toothpaste market I found this interesting defense of the worth of skilled advertising buying in an online article: Back in the '50s, the ratings were huge on primetime television programs. There were five toothpastes (Colgate, Crest, Ipana, Pepsodent, and Gleem) with 95% of the market. Today, there are dozens of brands with endless iterations such as sensitive formula, peroxide, baking soda, whitening agents, and on and on. At the same time, back in the '50s, there were three networks (ABC, CBS, and NBC) with 95 % of total viewing. Media was indeed a commodity in those days because there was no ability to differentiate audiences as there is today, with 74 advertiser-supported cable networks and over the air channels such as The WB, which is solely targeted at 12-34-year-olds. How things turn around. There are no longer three networks, but there are five dominant media companies with lots of cable channels. I'm not sure about the accuracy of the '50s toothpaste market share, but it sound about right. But the oligopoly of our decade may be even tighter, and in a much larger market. In 2000, according to the AdAge chart below, there were five companies that controlled over 85% of the 1,3 billion US toothpaste market, and the two leading brands owned over 60% of the market, and growing. The toothpaste market is growing very slowly in the US, so that any growth is at the expense of another company's loss. True, there's a lot of pseudo-variety as we've pointed out, but the competition is very focused among four leading brands, not the "dozens" mentioned above. Interesting to note: Ipana and Gleem (now owned by Procter & Gamble) are not dead brands, but they now have a very low US market share. Unilever's Pepsodent brand, once so important, now has pitiful share. The general agreement is that Unilever is trying to get rid of its non-performing brands as they try to concentrate on products in other areas that are leaders in their categories, Arm &Hammer has done well in recent years, promoting the idea that baking soda enhances tooth brushing. Aquafresh, owned by pharmaceutical giant Glaxo, is holding a strong third place. The smaller companies are no t much of a threat. By the way, the leaders keep gaining ground. 2003 numbers show Colgate has managed to push up to a 34% share, Crest has moved up to 29%, and Aquafresh is up to 16%. In the world market as well, those three companies, with global reach, deep pockets, and lots of marketing savvy, keep building their brands. India and China are the big new markets, and all three companies are pushing hard.  Colgate is a billion-dollar brand worldwide, and Crest is nor far behind. US toothpaste market shares Rank Brand Company 2000 market share 1999 market share 1 Colgate Colgate-Palmolive 32.1% 30.1% 2 Crest Procter & Gamble 27.4% 27.3% 3 Aquafresh GlaxoSmithKline 10.5% 10.9% 4 Arm & Hammer Church & Dwight 8.3% 6.6% 5 Mentadent Unilever 5.7% 6.6% 6 Sensodyne Block Drug 4.2% 4.1% 7 Rembrandt Rembrandt 3.1% 2.8% 8 Close Up Unilever 1.6% 1.7% 9 Ultra Brite Colgate-Palmolive 1.3% 1.3% 10 Pepsodent Unilever 1.0% 1.1% Source: AdAge 10:50:54 PM

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