P&G may kill Crest outside U.S.

By Published on .

Most Popular
Pocter & Gamble Co. is looking at merging the Oral-B and Crest brands outside the U.S.-at least in some markets-in a move that tests how smoothly its integration of newly acquired Gillette Co. will go on two levels.

The consolidation potentially pits P&G's longtime favorite, Saatchi & Saatchi, against roster newcomer BBDO Worldwide for a single account in countries where the merger takes place. Publicis Groupe's Saatchi handles Crest and other P&G oral-care brands in the U.S. and globally. Omnicom Group's BBDO has handled Oral-B globally since 2002 for Gillette, which P&G acquired in October.

The potential brand consolidation exposes a significant difference in outlook between P&G and Gillette veterans as the company looks to integrate its biggest deal ever without dominating the businesses it acquires-a major break from some past P&G takeovers.

While P&G has merged Gillette's oral-care business into its own, it has put Gillette's oral-care boss, A. Bruce Cleverly, in charge of the overall business as group president-global oral care in a rare-for-P&G placement of an executive from an acquired business over a P&G unit.

P&G did not comment directly on plans for Crest, but seemed to leave the door open for a brand consolidation. "Our combined company has a strong global portfolio of brands," said a company spokesman. "Right now we're focused on delighting the consumers of these brands and meeting or exceeding our commitments to the company and shareholders. We will go to market and retailers as one company with all the scale and synergies that affords."

Both Crest and Oral-B are billion-dollar-plus global brands, but most of Oral-B's sales are outside the U.S. and most of Crest's sales are inside. The Colgate brand has global sales of more than $5 billion, more than 70% outside the U.S.

Though Crest and Colgate-Palmolive Co.'s Colgate are in a horse race for leadership in the U.S. and China, it's no contest in several other markets. In Mexico, Colgate's market share exceeds 80%.

At the very least, Oral-B could give P&G a platform for expansion into some Latin American markets where Crest hasn't been launched or barely exists, chief among them Brazil.

"I don't know [about the brand consolidation of Crest and Oral B]," said a former P&G executive, "but it sounds like a terrible idea." The executive noted that Crest has a strong position in China, where P&G claimed it surpassed Colgate-Palmolive Co.'s Colgate last year, but Colgate recently claimed an eight-point share lead. P&G also has strong local brands in Germany and Italy that it never considered consolidating with Crest, the executive said.

However, a former Gillette executive who also pleaded ignorance about the move said, "It would be a good idea." Oral-B is also strong in China and has a considerably wider and stronger footprint globally in oral care than Crest or other regional P&G brands, the executive said.

Some people familiar with the companies portrayed the move as a final decision, with Crest to be folded into Oral-B over several years of transitional co-branding.

Others familiar with the brand said the consolidation is at least under consideration for such markets as Latin America, where Crest is relatively weak or has yet to be introduced.

Gillette's oral-care business has a history of slapping the Oral-B name on acquired brands, even long-established ones. When Gillette bought the Rembrandt tooth-whitening brand in 2003, it had co-branded the products with the Oral-B brand name within six months as part of a consolidation plan with BBDO as agency for the combined brands.

P&G had to divest the Rembrandt products to Johnson & Johnson late last year as part of its agreement with the Federal Trade Commission to win approval for the Gillette acquisition.

In this article: