P&G to price Oral-B toothpaste at 10-15% premium to rivals

Procter & Gamble’s (P&G) much-anticipated Oral-B toothpaste is likely to be priced about 10-15 per cent higher than competitors such as Colgate-Palmolive. The world’s largest consumer products company is finally making its foray into toothpastes on Tuesday. The product will be endorsed by actor Madhuri Dixit, who also promotes Oral-B toothbrushes in the country.

While a mail sent to the company remained unanswered till press time, a report by brokerage Motilal Oswal says P&G will launch three variants of the product— a basic toothpaste called All Rounder 32, a gel variant called All Rounder Gel and one for those suffering from sensitivity called Pro-Health.

P&G is expected to launch three to four different stock keeping units of the three variants in a bid to counter competition. This includes a 40g, 80g, 140g and 190g pack of All Rounder 32; 35g, 80g and 140g pack of All Rounder Gel and 75g and 140g packs of Pro-Health.

In the first phase, P&G is targeting the metros before gradually taking the range to mini-metros and other cities. “We do not expect the launch to create material disruption for the market leader – Colgate - given its portfolio straddling multiple benefits and price points, well entrenched brand equity and deeply penetrated distribution network. P&G’s entry, however, will result in further stepping up of category ad-spends,” it added.

Colgate’s ad spends, which is about 15 per cent of sales at the moment, is likely to go up in the coming months, according to analysts. P&G first disclosed plans of the impending launch in May when its global chief financial officer Jon Moeller had indicated so at an investor meet in the US.

The launch will put an end to years of speculation about P&G’s entry into toothpastes in one of the most promising oral care markets in the world. For a long time, most expected P&G to launch its top-selling brand Crest in India. But with P&G upping its spends behind Oral-B with its Smile campaign endorsed by Dixit in recent years, it soon became clear that the toothpaste foray would happen under Oral-B.

Globally, Oral-B is the leader in the brushing segment and is one of P&G’s billion-dollar brands. The company also has a toothpaste portfolio under Oral-B which sells in countries such as Greece, Portugal, Israel and Venezuela.

A recent report from brokerage house Edelweiss had said the company intended to take Oral-B toothpastes to many more countries and that the launch in India would be a step in that direction.

The toothpaste market in India, pegged at Rs 6,000 crore, has been growing at a clip of about 19 per cent per annum.

In the past two years, companies such as GlaxoSmithKline (GSK) and Colgate have demonstrated that consumers in oral care can be uptraded, provided the products are right. GSK’s Sensodyne that targets sensitivity, an oral health problem where the sufferer experiences a sharp, shooting pain on consumption of anything hot or cold, is already clocking sales in excess of Rs 100 crore.

Pegged at Rs 950 crore, sensitivity, the largest of the emerging toothpaste categories, is growing at around 30 to 40 per cent per annum. Both GSK and Colgate have taken the battle for niche oral care to the next level with launches in areas such as gum care and teeth whitening in the last few months.