At the CAGNY (Consumer Analyst Group of New York) investor conference, Colgate-Palmolive’s (CL) Chief Executive Officer, Ian Cook, discussed how the company plans to maintain progress going forward in 2016. The company is focusing on the following:
- clarity and consistency of strategy
- innovation to drive growth
- commercial strategies to build brands
- consumer engagement
- simplification and efficiencies to fund other activities
Strategy to build the future
The company has been taking strategic initiatives for over ten years, starting with brands, fueled by innovation, funded by effectiveness and efficiency, and aimed at building a cadre of strong leaders.
Specifically, Colgate continues to put an enormous emphasis on gross margin. The company is also working hard to put down overhead costs as a percentage of sales. This should help the company fund the innovation and the consumer engagement behind building its brands and, therefore, grow operating profit and the cash flow.
ETF investors might note that CL accounted for 1.0% of the iShares MSCI All Country World Minimum Volatility ETF (ACWV) as of March 30, 2016.
Innovations on the horizon
Colgate and other companies like Procter & Gamble (PG), Unilever (UL) and Clorox (CLX) believe that innovation is the key that drives growth. For this reason, Colgate has a list of innovations announced for 2016. In oral care, Colgate introduced Total variant, Daily Repair, which helps reverse early damage for better oral health.
The company also introduced the Colgate Optic White Toothbrush and Whitening Pen with shimmering packaging. According to CEO, Ian Cook, this product should be margin accretive. Colgate rolled out a new bacteria-removing toothbrush as well, and a gold colored toothbrush with slim tip bristles in Asia as gold is of importance there.
The company also extends innovation in its mouthwash business, which provides 24-hour breath control with 100% natural extracts.
In the next part of this series, we’ll discuss the company’s Hill’s business growth as well as its Sanex brand in Europe.