Reckitt Benckiser recorded its highest ever sales growth last year, thanks to Dettol and the coronavirus. The group is now reviewing its brand portfolio to maintain the momentum: Scholl is already on its way out.
Dettol became a global brand
Disinfectant cleaning products were having the year of their lives, and so was FMCG producer Reckitt Benckiser. The group, which manufactures Dettol and Lysol, among others, achieved sales of 14 billion pounds (16.3 billion euros) and thus accounted for a comparable growth of 11.8 per cent. According to the Financial Times, this was the biggest increase since the group's formation in 1999.
Sales of hygiene products rose by a fifth, mainly because the company introduced Dettol and Lysol in 41 new markets during the pandemic, but other categories also did well. For example, the immunity supplement Airborne saw its sales more than double.
What happens after the pandemic?
The question is what comes after the Covid pandemic for the manufacturer, which also owns the Nurofen painkillers and Durex condoms. Just as many analysts and investors, the group expects some normalisation: Reckitt Benckiser is aiming for modest sales growth of 0 to 2 per cent in 2021 as it struggles to improve on last year's record-breaking figures.
Before the pandemic, the group also struggled for years with slow growth and operational difficulties. Laxman Narasimhan, the new CEO, now wants to change this and considers 2020 as a turning point. The chief executive wants to take the opportunity to reorganise the business and says he will take "bold measures".
Scholl out, Biofreeze in
The company immediately announced a strategic review of its Chinese baby food operations. By 2020, the group had to write down as much as 985 million pounds on that branch. Reckitt Benckiser is also selling foot care brand Scholl to private equity group Yellow Wood Partners.
In the opposite direction, the Dettol maker is expanding its portfolio with pain relief brand Biofreeze and feminine hygiene products Queen V. Meanwhile, the group also focuses on B2B business, with deals including disinfecting the famous Wembley stadium. "We expect 2021 to be a year of further strategic progress, and we remain confident that we will meet our medium-term targets," concludes Narasimhan.