Terry White to become totally owned subsidiary of EBOS Group; five industries dominate total Australian advertising spend; R&D and prestige boost growth for Unilever; and strongest growth in five years for P&G.
Terry White to become totally owned subsidiary of EBOS Group
EBOS Group is the largest, most diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products with annual revenues of $7 billion. The company is also a leading distributor of household name consumer products and animal care brands. In 2016, EBOS acquired just over 50 per cent of the shares in the Terry White Pharmacy Group, amalgamating the chain with its Chemmart brand. The re-branding of 400 Terry White Chemmart stores was completed during the 2018 financial year.
Earlier this year, EBOS acquired Gran's Remedy, one of New Zealand's leading footcare brands. In July, the company won a five year contract to supply more than 400 Chemist Warehouse and My Chemist stores. EBOS has announced it will require the remaining shares in the Terry White Pharmacy Group in a $50 million cash deal. Terry White shareholders will vote on the deal later this year and the company will become a 100 per cent-owned subsidiary of EBOS.
Five industries dominate total Australian advertising spend
Only five industries accounted for over 50 per cent of Australia's total ad spend from June 2017 to June 2018, reports Nielsen. The retail industry, including department stores, shopping centres and restaurants, retained the top slot, lifting its collective ad spend by 4 per cent to just under $2 billion.
Motor vehicles just missed the $1 billion mark to secure the number two position, following a 5 per cent decline in spending over the previous fiscal year. The travel industry posted the biggest increase in advertising spend – 21 per cent – to $877.68 million with the bulk going to print media. Australia's passion for property pushed real estate ad spending to $620.09 million and the finance industry rounded out the big five with an ad spend of $593.07 million.
The top 10 advertisers by media spend were:
- Harvey Norman - +14 per cent
- McDonalds - +32 per cent
- Woolworths Supermarkets - +17 per cent
- Toyota Australia - +17 per cent
- Telstra - minus 14 per cent
- Reckitt & Benckiser (Clearasil, Veet, Scholl etc) – minus 13 per cent
- Chemist Warehouse - minus 3 percent
- Coles Supermarkets - +11 per cent
- Sportsbet - +24 per cent
- Bunnings - +2 per cent
R&D and prestige boost growth for Unilever
Unilever's decision to cut its dependence on its food business is paying off. In Q3, growth jumped 3.8 per cent across all of the multinational's three major divisions – beauty and personal care, home care and food and refreshment – to reach 12.5 billion euros (AUD$20.21 billion). Beauty and personal care achieved underlying sales growth of 4 per cent to report revenues of 5.2 billion euros (AUD$8.41 billion) for the period.
Skincare delivered in spades from mass to class. Dove foaming shower gels, Ponds reformulated ranges and Citra India's new naturals range led the charge at lower price levels. Prestige brands acquired over the past few years such as Hourglass, Kate Somerville, Living Proof and REN all enjoyed double digit growth in Q3. While Unilever's Love Beauty and Planet, a natural skincare range aimed at Millennials, which has debuted in the US and the UK extended into deodorants with great success.
Other top performers in personal care included Dove Men+Care, Rexona and Dove's new haircare range. South America was a weak spot but the rollout of K-Bright skincare, one of Carver Korea's bestsellers, across Southeast Asia picked up the slack. Unilever bought Carver Korea last September for 2.3 billion euros (AUD$3.7 billion).
Strongest growth in five years for P&G
Procter & Gamble, the world's biggest advertiser, slashed its media and agency spend over the past year. Yet the multinational's latest results have overturned the marketing maxim that a company can't cut its way to growth. P&G has posted its strongest organic growth in five years for its first fiscal quarter to September 30, reaching sales of US$16.7 billion – an increase of four per cent over the same period last year.
Beauty sales jumped 7 per cent with Olay and SK-II enjoying double digit growth. Haircare sales from power brands such as Pantene and Old Spice also reported single digit increases. It looks like Gillette's fightback against online upstarts such as Unilever's Dollar Shave Club is gaining ground with grooming sales up 4 per cent. Oral care sales also boosted the bottom line with single digit rises.
Snippets from the Wires
- Johnson & Johnson has announced global Q3 sales of US$20.35 billion for the three months to September 30. Consumer sales, including the Neutrogena and Aveeno brands, rose 1.8 per cent to US$3.4 billion.
- Fragrance ingredients are used across a wide range of beauty, perfume, household and personal care products. According to Global Market Insights, the worldwide fragrance ingredient market for personal care products alone is expected to reach US$18.5 billion by 2024. The Asia/Pacific region, fuelled by China, India, Japan and South Korea, is on track to achieve the fastest growth to US$4 billion. Brazil is also predicted to come back with a bang.
- Australian menswear stalwart, Roger David, has been in business since 1942. The third-largest speciality menswear chain in Australia has been battered by online retailers and international rivals such as Zara. The company has called in the administrators and a nationwide sale will begin immediately. The company's 57 stores are expected to close after the peak summer season.
