Bite’s Back in Oral Care

• In developing markets, educating consumers on the benefits of traditional oral health and the products to support it is key, while mouthwash has emerged as a strong growth driver in some growing markets.
• Oral care regimens that provide complete oral health care are among strategies that attract new customers and keep existing ones.
• In developed markets, consumers are beginning to follow increasingly complex oral care regimens as they seek to ensure better dental health, trading up to specialized products.
• Product segmentation, efficacy, cosmetic benefits and further consumer segmentation are among key strategies for future growth in the global oral care market.

The global oral care market experienced stable growth from 2005 to 2010, with a value compound annual growth rate of 4.6%, using current/nominal prices and fixed exchange rates, according to Euromonitor International. Up until 2010, the category had survived the global economic downturn, and as the global economy slowly recovers, growth of the oral care category is expected to increase in 2011 to 5.2% and remain close to that over the forecast period through 2015. This growth will be driven by product innovations, value-added products and the strong growth of markets in developing countries—as well as the fact that oral care, by nature, is one of the most essential beauty and personal care categories.

Looking for Innovations or to Trade Up In the global oral care market, regions with developed and saturated markets (i.e. the U.S., Japan, Germany and the U.K.) are expected to show little growth, and those with unsaturated markets and growing populations (such as China, Brazil and India) have clear growth potential. Growth opportunities in these two general types of markets will be realized in different ways: In the developed markets, consumers look for innovations, while developing market consumers trade up to better products.

Brand owners are focusing on ways to stand out against the competition by providing newer and better products with new product formulations, “innovations” and marketing campaigns. In developing markets, brand owners focus their efforts on educating consumers on the benefits of traditional oral health and the products to support that. As a result, places such as India are seeing dramatic growth in the penetration of oral care as more consumers trade up from toothpowder to toothpaste and expand their oral care regimens to include mouthwashes/dental rinses.

Pushing Multi-product Regimens

As brand owners look for ways to attract new customers and keep existing ones, the leading players have developed oral care regimens that provide complete oral health care. In the U.S., the largest market by far, the most heralded new product of 2010 was undoubtedly Procter & Gamble’s Crest 3D White line. The full oral care regimen consists of an Oral-B pulsing toothbrush, a paste-gel hybrid toothpaste, an alcohol-free whitening mouth rinse and whitening strips. By leveraging multiple benefit claims, the 3D White system seeks to capitalize on the trend in oral care marketing of converting consumers from single product users to using a multi-product regimen.

In conjunction with this shift to innovation, companies are positioning many of these regimens as “professional quality” and marketing them as at-home alternatives to dental visits, especially in the area on whitening. Colgate’s ProClinical range provides targeted benefits for health and beauty seekers through what it claims are clinically proven technological features that have three variants: Daily Whitening for removing surface stains, Daily Cleaning for polishing teeth and Daily Renewal for Enamel for fortifying tooth enamel.

In other developed markets such as Germany, consumers are beginning to follow increasingly complex oral care regimens as they seek to ensure better dental health. Following the advice of their dentists, consumers are using more dental floss on a daily basis before cleaning their teeth, and there is an ongoing switch to power toothbrushes. Many consumers are also beginning to follow teeth cleaning with the use of mouthwashes/dental rinses.

In less mature markets like China, there was a shift toward more intricate oral health regimens in 2010. This resulted in good growth for dental floss, which saw 7% current value growth in 2010 over the previous year, with a growing number of consumers flossing, brushing and then rinsing with mouthwashes/dental rinses.

Product Innovation Spurs Growth in Mature Markets

Battery-powered toothbrushes have seen success in countries such as Japan, the U.S. and Germany—markets that have seen little growth in other oral care categories. In the U.S. and Germany, battery-powered toothbrushes are seen as a more effective method for oral care, and despite their higher unit prices, they are seen as an investment in oral health by the consumer. In Japan, growth is driven by sales of compact battery toothbrushes, many of which are marketed to professional women who brush their teeth after lunch at work (the products are designed to look like a cosmetic product).

In the U.K., brand owners have taken innovation to great lengths—beyond just teeth whitening to features like enamel regeneration and teeth polishing. In 2007, Arm & Hammer launched the Enamel Care Sensitive product that is said to contain a liquid form of calcium, the key component in tooth enamel. The idea is that the calcium rebuilds the tooth by plugging microscopic gaps in the enamel. The repair stops dental nerves from becoming exposed, preventing pain. Arm & Hammer has increased in market share in the U.K. from 0.9% in 2005 to 1.4% in 2010 with the help of products like these.

Value-added Products Show the Most Growth, Potential

Across every major market, the introduction of value-added oral care products is being met with approval and success. Brand owners in mature, saturated oral care markets are looking for ways to differentiate themselves in areas where the only way to growth is to take share away from competitors while seeking to serve consumers in developing markets (with their growing incomes) with products to cover a wide variety of oral care issues. As an example of differentiation in mature markets, sensitive toothpaste in Germany and the U.K. saw 2% and 4% share increases over the past five years as consumers looked for more than just basic teeth cleaning from their toothpaste.

In countries like Brazil, consumers are becoming more aware of oral hygiene and are willing to spend extra money on additional teeth-protection products. Leading companies, for example, are engaging in strong advertising campaigns for value-added products, and new innovative product launches are appearing on the market (again, toothpaste for sensitive teeth as an example), and more dentists are promoting the use of such products. Whitening toothpaste increased its share of the Brazilian toothpaste market from 8.5% in 2005 to 36% in 2010, the second most popular type behind standard/traditional toothpaste.

Growing incomes in China, too, are also impacting consumer choices in oral care. In 2010, for example, there was growing interest in functional, specialized and value-added toothpaste. This was partly due to a growing focus on health and appearance, in addition to rising disposable income levels and a return to stronger economic growth in 2010. Consumers became increasingly willing to spend money on ensuring dental health, with many seeking toothpaste that, in addition to cleansing and freshening, offers health benefits.

In India, GlaxoSmithKline (GSK) launched its Sensodyne brand in early 2011. Its entry into this market was a clear indication of the company’s belief in the potential India offers and its consumer evolution to increased product demand for more specific needs and concerns. The overall toothpaste market in India is currently growing at 8%, while the “sensitive toothpaste” segment is estimated to be growing at around 18%, and GSK has reported it will invest Rs.250 million over 2012 to market the brand—adding that it will reach out to around 15,000 dentists across the country.

Consumers in developed markets are also trading up to specialized products, as in Germany where there was particularly strong growth for cross-action toothbrushes, which feature bristles angled in opposing directions in order to better lift out and sweep away plaque. These products gained two percentage points in value share in 2010 over 2009, rising to account for 10% share. At the same time, total care/complete care toothpastes increased its share of the German market from 0.5% in 2005 to 8% in 2010, as consumers looked for products to cover all of their oral care needs.

Aging Populations Drive Growth in Many Countries

As populations in many major oral care markets continue to age, these older consumers are looking for ways to stave off old age and the variety of maladies that comes with it. In Japan, denture care is a fast-growing category and is expected to expand its market share in the near future as brand owners create products that are easier to use and have greater appeal. Older German consumers are also increasingly focused on maintaining dental health, which has helped to maintain growth levels in the country through the global economic crisis.

Emerging Products

Mouthwash has emerged as a strong growth driver in growing markets such as China and India. In China, mouthwashes/dental rinses were the clear leader in terms of current value growth in 2010 over the previous year, with sales increasing by 17%. Growth was underpinned by a rising focus on grooming in urban areas, with consumers keen to avoid bad breath. In India, mouthwashes/dental rinses value sales are still small, accounting for less than 2% of oral care in 2010, but grew by 70% in that year. This robust growth was supported by increasing consumer demand for products to augment the daily oral care regimen, coupled with increasing product availability and penetration, particularly in urban areas.

Products viewed as herbal and/or natural are also very popular around the world, especially in countries that have fewer historical ties to modern oral care. A notable trend in 2010 was the increasing preference of consumers in India for herbal and ayurvedic-based toothpastes. These are perceived to be more “natural” than standard products, and herbal and ayurvedic-based toothpastes saw increasing traction in 2010, as consumers veered toward oral care alternatives perceived as more natural or healthy. In China, there is a growing interest in traditional herbal medicine—specifically benefiting the brand Yunnan Baiyao, which contains a traditional herbal remedy to inhibit gingival bleeding, repair mouth ulcers, relieve gum pain and swelling, and eliminate bad breath.

BRIC Fueling Global Oral Care Growth

The BRICs (Brazil, Russia, India and China) are significant contributors to global oral care growth, with the four countries accounting for a $396 million increase in value sales from 2009 to 2010. Developing countries, including the BRICs, are playing a major role in sustaining the growth of basic oral care. Increasing frequency of usage, especially for toothpaste and toothbrushes, is driving this growth. Stronger hygiene awareness, pushed by major brands and many governments, is encouraging more frequent brushing of teeth, the usage of toothpaste when brushing and also the frequency of toothbrush replacement. In addition, growing middle-class consumer bases in all four countries are further driving demand for secondary oral care products.

India: Hot Spot for Future Oral Care Growth

Rural consumers in India (roughly 70% of the country’s population) are set to drive growth, thanks to rising awareness of the importance of oral hygiene and improving income levels. Consumers are switching from traditional, homemade solutions such as datun and neem leaves to using toothbrushes and toothpaste. Meanwhile, urban consumers are changing their toothbrushes more regularly than before, in line with dentists’ recommendations, due to rising oral hygiene awareness.

Outlook: Growth for Both Basic and Secondary Oral Care Products

The oral care category is set to grow by $4.1 billion over 2010–2015. Basic products will account for the lion’s share of this growth. Toothpaste and toothbrushes will account for just over $3 billion of this (73.4%) growth. Secondary products will also bounce back to growth, with mouthwashes/dental rinses putting in the best performance ($772 million increase 2010–2015), and other products rising more steadily. Segmentation, efficacy, cosmetic benefits (such as whitening), a focus on oral health and further consumer segmentation will be the key strategies for future growth in the global oral care market.

Colin Decker is a member of Euromonitor International’s custom research team.