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By: Carrie Lennard, Euromonitor International
Posted: January 5, 2010, from the January 2010 issue of GCI Magazine.

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Damage in the developed markets was partially offset by booming sales in emerging regions. In stark contrast to regions such as North America, the Middle East, Africa, Asia and Eastern Europe all saw an improvement in 2007–2008 value growth rates compared to the previous year. Eastern Europe proved to be the brightest spot for oral care, with a respectable 8% value growth 2007–2008. Ukraine and Russia were the main drivers of this performance, with Ukraine seeing a 15% rise in sales in 2007–2008 and Russia adding a cool $1 billion in absolute growth for the same time period. This meant that Russia accounted for 50% of the absolute value growth in Eastern European oral care. The country is experiencing a rapid rise in disposable income, and, as a result, consumers are continuing to trade up in most areas of oral care. Demand for electric toothbrushes (which are gradually replacing battery and manual toothbrushes) is particularly strong in Russia, with value growth of 19% in 2007–2008. The average unit price of toothpaste products has increased more rapidly as the market is flooded with numerous added-benefit products. In contrast to mature Western markets, the share of cheap unbranded oral care is gradually falling, with a shift toward more advanced products.

Western Europe; Asia Lead Regional Sales

In contrast to many other categories in which North America and Western Europe typically lead sales, oral care sales are dominated by Asia and Western Europe. These regions account for a combined 52% of the $33 billion total world oral care sales. Sales in Asia have been buoyed by China and Japan. In the latter, there is a growing demand across most segments of oral care because of a growing trend popular among workers to clean their mouth after lunch—thus increasing the average number of times oral care products are used per day to three times instead of two (as is the case in most other countries).

In China, the oral care market is strongly characterized by the country’s love affair with herbal medicines. Natural/herbal toothpaste is the leading type in China, accounting for 30% of total sales in 2008. Even leading brands such as Colgate have tailored their products to the trend, offering herbal toothpaste products, with exotic sounding ingredients such as lotus leaves and honeysuckle.

The U.S. Still the Single Biggest Oral Care Market

With value sales of $6 billion in 2008, the U.S., home of the perfect Hollywood smile, is still the biggest single oral care market by far. Sales in nearly all areas of oral care are strong in the U.S., as the routine of brushing and flossing is highly engrained in the psyche of the average American consumer. What’s clear is that tooth whiteners saw a decline of -7% in 2007–2008, a huge drop after the 13% growth spike in 2007. The flurry of new product launches in 2007 failed to translate to long-term sustained interest in at-home whitening products. Many consumers have found the at-home tooth-whitening process tedious and complicated, with many either unwilling to follow through with the treatment or use it again. Mouth fresheners have also taken a big hit in the recession (-14% in 2007–2008) as many cash-strapped consumers deemed the product superfluous to their overall oral health.

Sunny Outlook for Oral Care

Despite the current setback, Euromonitor International expects the long-term prognosis for oral care to remain favorable. Unlike other areas of personal care such as color cosmetics and fragrances—which could (in theory at least) be cut out altogether in times of hardship—in all but the very poorest countries globally, oral care will remain an essential buy for most consumers. In 2010, consumers will likely continue to focus on the basics like toothpaste and toothbrushes, but as consumer confidence returns, interest in all-around dental care should pique in emerging regions—meaning products such as dental floss and mouthwash should thrive.