Colgate-Palmolive Co. will debut a revised line of pet foods with higher price points in 2019, marking the company's latest effort to improve financial results by selling more premium products.
The New York-based company is planning to revamp pet food that it sells under its Hill's Science Diet label, President and COO Noel Wallace told analysts during a Jan. 25 call to discuss Colgate-Palmolive's fiscal fourth-quarter and full-year 2018 results. The relaunch will begin during the first quarter of the company's 2019 fiscal year and feature new formulas and packaging, Wallace said, adding that the new products will debut at a higher price point.
The changes at Hill's represent Colgate-Palmolive's latest attempt to bring a rejiggered — and higher-priced — version of one of its core products to market. The company will also relaunch its Colgate Total toothpaste in 2019 using a recipe free from triclosan, an ingredient that critics have questioned for potential links to cancer and thyroid issues. The new formula also includes improved controls for bad breath and is better for sensitive teeth, Chairman and CEO Ian Cook said during the call, describing the revised formula as the "biggest breakthrough since we came out with the original Total product" two decades ago.
"What is not typical about 2019 is the scale of innovation on ... the core business," Cook told analysts.
Colgate-Palmolive and its competitors, including Unilever PLC and The Procter & Gamble Co., have faced increasing competition from local and upstart brands in recent years. That has led the companies to make changes to their product lineups, which include well-established names such as P&G's Gillette shaving label as well as Colgate's Palmolive dish soap.
As it debuts new versions of old brands in 2019, Colgate-Palmolive will also ramp up its advertising spending, CEO Cook said.
For its 2019 fiscal year, the company is forecasting organic sales to expand between 2% and 4%. In 2018, organic sales rose 0.5% across the entire company.
In China, Colgate-Palmolive's sales volumes declined during the quarter, contributing to a 6.5% drop in net sales within its Asia-Pacific division. Cook said the company expects that its business in the world's second-largest economy will improve incrementally in the first half of fiscal 2019 but will not return to growth until the second half.
Signs of an economic slowdown in China, such as declines in sales of goods from autos to iPhones, have popped up at consumer-focused companies in recent months.
The company is still attempting to grow its business in China. COO Wallace said that Colgate-Palmolive started selling at-home teeth whitening kits through e-commerce during the company's fiscal fourth quarter.