Colgate may get costlier as input inflation returns

Colgate-Palmolive India may raise product prices further in the coming quarters as the company looks to protect margins from rising commodity costs linked to the West Asia conflict, according to a report by The Times of India.

The company said inflation remains a concern even as it continues to protect price-sensitive consumers. It had increased grammage in smaller packs last year to pass on the benefits of the GST reduction and has retained those additions, CEO and MD Prabha Narasimhan said during the company’s annual investor day call, as reported by TOI.

“We have ring-fenced the most vulnerable consumers,” Narasimhan said.


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The company has also retained the higher grammage in its Rs 10 and Rs 20 packs, which Narasimhan said offer “fantastic value” to consumers. Colgate-Palmolive India has taken low single-digit price increases in recent quarters.

Premium products drive growth

While managing input costs, Colgate-Palmolive India is focusing on premium products to increase sales. The company said its premium business is growing at six times the overall market rate.

“There is an opportunity to drive premiumisation in both toothpaste and toothbrush,” Narasimhan said.

The company competes in the toothpaste and oral-care segments with brands including Hindustan Unilever’s Pepsodent and Closeup, Haleon’s Sensodyne and Patanjali.

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Colgate is also looking to strengthen its core brands, which remain important for volume growth. The company plans to improve packaging and product experience as part of the strategy.

Rural markets support volumes

The company said higher product availability, rising incomes and greater awareness of oral health are supporting volume growth in rural markets.

Colgate-Palmolive India, however, did not comment on the outlook for rural demand amid below-normal monsoon rainfall.

Palmolive growth disappoints

Narasimhan said the company is disappointed with the performance of its personal-care brand Palmolive.

To strengthen the brand’s presence in direct-to-consumer and e-commerce channels, Colgate-Palmolive India has partnered with Bombay Shaving Company to manage the business across these channels.

The company’s strategy comes as FMCG companies balance consumer affordability with pressure on margins from higher input costs. Colgate-Palmolive India is therefore looking to combine selective pricing with premiumisation and volume-led growth as it navigates the inflationary environment.

(With inputs from TOI)