Colgate-Palmolive Leans Into E-Com-First Packaging Thanks to Hill’s Success
Colgate-Palmolive is scaling digital learnings from the success of its Hill’s Pet Nutrition business across the company, including through packaging and e-commerce.
Although questions once surrounded its possible divestiture, Hill’s is now a burgeoning and innovative component of the organization. Its net sales grew 20% in the third quarter vs. the prior-year period, while organic sales grew 19%.
In addition to plans for a new factory in Kansas — expected to open in 2023 to meet growing demand — Hill’s recently partnered to develop an alternative meat protein for pets and piloted recyclable packaging in Europe.
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And while the category has been favorably impacted by the rise in pet ownership during the pandemic, that’s not the entire story as Hill’s has been delivering growth since the second half of 2018, said John Faucher, chief investor relations officer, bolstered by a relaunch of the Science Diet line and the company’s focus on growing in underdeveloped markets.
“The Hill’s business does incredibly well in e-com,” he noted at the Morgan Stanley's Global Consumer & Retail Conference. “I consider e-com to be the new mass in premium pet food.”
The No. 37 consumer goods company is taking these learnings to other parts of the organization, including prioritizing e-commerce in a package redesign.
“If you look at the Science Diet relaunch, it was the first time we really started with e-commerce first in terms of package redesign,” said Faucher. “And I think if you take a look at the Colgate packaging — as well as personal care and homecare — you see much more focus on e-commerce from a packaging standpoint, and then really building up the knowledge in e-commerce, the knowledge in digital marketing, the knowledge in data and analytics.”
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Through leveraging the over-development on Hill’s as a catalyst to drive e-commerce and digital market share, along with making some key external hires, the company is driving toothpaste growth and market share growth in e-commerce across its key markets.
“Beyond the digital success, because Hill’s has been in the forefront and has been a model for the rest of the organization around analytics, third-party data, how we interact with our consumers in the new digital world, Hill’s also is in the forefront of our professional recommendation-driven demand and model,” added Panagiotis Tsourapas, Colgate-Palmolive group president for Latin America, Asia Pacific and Africa/Eurasia, “which is very much applicable in rest of the businesses.”
