Colgate-Palmolive takes a bite out of grime. The company is a top global maker and marketer of toothpaste and soap and cleaning products. Colgate-Palmolive also offers pet nutrition products through subsidiary Hill's Pet Nutrition, which makes Science Diet and Prescription Diet pet foods. Many of its oral care products fall under the Colgate brand and include toothbrushes, mouthwash, and dental floss. Its Tom's of Maine unit covers the natural toothpaste niche. Personal and home care items include Ajax brand household cleaner, Palmolive dishwashing liquid, Softsoap shower gel, and Speed Stick deodorant. The company has operations in 70-plus countries and sells its products in more than 200 countries.
In the US, it operates about 60 properties, which include manufacturing, distribution, and research facilities, as well as office space. Major overseas facilities are located in Australia, Brazil, China, Colombia, France, Italy, Mexico, Poland, South Africa, Thailand, Venezuela, and Vietnam. About 80% of Colgate-Palmolive's net sales come from markets outside of the US, with Latin America leading the way with 28% of sales. Its products are generally marketed by a direct sales force, and in some cases, distributors and brokers are used.
About half of Colgate-Palmolive's 2011 net sales came from emerging markets -- Latin America, Greater Asia/Africa (excluding Japan), and Central Europe. 2011 was a relatively good year overall as a result. Latin America's net sales rose 12% in 2011. The company points to a 3% volume growth (mostly among Mexico, Brazil, and Argentina), increases of 7% in net selling prices, and a 2% positive foreign exchange impact for the sales boost. Organic sales also rose by more than 11% in the country. The company's Europe/South Pacific segment saw 9% increases in net sales in 2011 while Greater Asia/Africa posted similar gains with 9.5%.
Colgate-Palmolive's strategy is to build and boost its market share in key product categories; the company is organized to achieve this goal. Its management teams function along geographic lines and are accountable for each region's business and financial results. Colgate-Palmolive points to its geographic diversity as a way to reduce its risk in any one part of its business. The completion of a major four-year restructuring years ago has helped to tighten Colgate-Palmolive's global supply chain and realign its sales, marketing, and new product organizations to serve both mature and developing markets. This and other cost-saving initiatives have freed up additional funds to invest in product research and support. Indeed, Colgate-Palmolive's worldwide gross profit margin in 2011 was more than 57%, thanks to its cost-cutting and despite rises in commodity costs and negative foreign exchange during the same time period.
Mergers & Acquisitions
The consumer products company continues to cull high-performing brands while shedding those that don't fit into its strategy. To this end, Colgate-Palmolive in 2011 acquired the Sanex personal care brand from Unilever PLC for about $950 million. Sanex, with net sales of nearly €190 million ($260 million) in 2010, enjoys strong market share in Europe with its deodorants and shower gels. The deal with Unilever was a swap, of sorts, as that company in 2011 bought Colgate-Palmolive's laundry detergent business consisting of the Fab, Lavomatic, and Vel brands in Colombia for $215 million. Paring down its products portfolio for international markets, Colgate-Palmolive sold its Pom Pom children's soap brand to Brazil's Hypermarcas in 2010. Consumer products conglomerate Hypermarcas paid about R$85 million ($50 million) for the brand to expand its assortment of personal care products.
Sales & Marketing
Its oral care business segment holds a growing share of the global toothpaste market and the manual toothbrush market worldwide. However, those core products face stiff competition from large multinational rivals, such as Procter & Gamble, which boasts a similar product portfolio, including brands Olay, Secret, Mr. Clean, and pet products under the Eukanuba and Iams names. Colgate-Palmolive additionally competes with a growing number of discount and private-label brands sold at leading retail chains. – less