Church & Dwight Launches Arm & Hammer Toothpaste With Orajel Pain Relief
This article was originally published in The Tan Sheet
Executive Summary
The firm positions the toothpaste as providing maximum strength relief from cold, heat, acids and sweets at a value-tier price. CEO Jim Craigie says the firm has been “a little delinquent” on launching toothpaste products relative to competitors Colgate-Palmolive and GlaxoSmithKline.
Church & Dwight Co. Inc. launches Arm & Hammer Sensitive toothpaste, the first product combining the baking soda-based toothpaste with a pain-relief ingredient from the firm's Orajel oral care brand.
The toothpaste, currently launching, is positioned as providing maximum strength relief from cold, heat, acids and sweets at a value-tier suggested retail price of $3.99, Church & Dwight says in a product fact sheet.
The toothpaste is 40% more gentle to exposed roots and dentin than a leading sensitive toothpaste, the Princeton, N.J.-based firm adds, though it does not name the competing brand. GlaxoSmithKline Inc.’s Sensodyne leads the U.S. sensitivity toothpaste space.
Arm & Hammer Sensitive is available in three varieties: Whitening gently removes plaque and surface stains; Freshening contains mint-infused breath fresheners; and Protection contains properties to protect against future tartar build-up, the firm claims.
Packaging features both the Arm & Hammer and Orajel names, and the product joins other Arm & Hammer toothpaste formulations that whiten and strengthen enamel. The line includes one sensitive formula – Advance White Sensitive with Whitening – which retails for about $4.79 online.
“I think we've hit a home run,” but the firm has been “a little delinquent” on launching new toothpaste products relative to its competitors.
–Church & Dwight CEO Jim Craigie
“I think we've hit a home run,” CEO Jim Craigie said Feb. 7 during the firm’s fiscal 2011 fourth-quarter earnings call. “I think this is the best new toothpaste in the marketplace.”
He noted the launch follows a period in which the company had been “a little delinquent” adding new toothpaste products relative to competitors like Colgate-Palmolive Co. and GSK.
The launch could give a lift to the Orajel brand, which recently faced tough competition from private-label oral-care pain relief brands. Orajel currently comprises pain relief gels, training toothpaste for kids and cold sore products.
Craigie said when he joined Church & Dwight in 2004 the firm’s slate of new products “was pretty paltry,” but now it is strong.
“Today I think we have one of the best new product pipelines in the industry and it's a key contributor to our great organic growth numbers,” he said.
The firm looks to generate about 50% of its organic growth this year from new products, a goal it has achieved in the past few years, according to Craigie.
“We've signed some deals with companies [for] great new technology that are part of the products here, part of things you'll see in the future we haven't revealed” yet, he noted.
Church & Dwight also is introducing new products in other categories, including an offering under its Nair depilatory brand.
Strong Sales Boost Q4, Annual Earnings
In a same-day release, Church & Dwight reported full-year net sales advanced 6.2% to $2.74 billion, with organic sales growth of 4.1%. Sales of personal-care products for the year were up 0.8% to $684.1 million. Earnings for the year rose 14.4% to $309.6 million.
In the fourth quarter, sales grew 11.3% to $731.1 million, with organic sales up 7.1%, the company said. Strong sales resulted in net earnings growth of 35.7% to $63.8 million for the period.
Domestic sales for the consumer business, which excludes specialty products, grew 10% to $519.6 million in the October-December period. Higher sales of Arm & Hammer detergents, cat litter and powered toothbrushes softness of the brand's toothpaste and laundry additives businesses, the firm said.
International consumer sales in the three-month period were $145 million, representing growth of 20.7%.
Conservative Guidance For 2012
Church & Dwight expects a “challenging” economic environment in 2012, with weak consumer spending and category growth due to high unemployment, Craigie said. The firm also expects commodity prices to continue to increase this year.
However, the firm notes in its Feb. 7 release, “We believe we are in an excellent position to continue to deliver value to our shareholders with our balanced portfolio of value and premium products, aggressive cost cutting and tight management of overhead costs.”
The firm anticipates reported and organic sales growth in 2012 of 3% to 4%. Earnings per share are projected to be $2.41 to $2.43, slightly higher than analysts' expectations.