Molarclean is a UK manufacturer of brush heads for tooth cleaning. Alliance experts advised MolarClean with starting their first export, by searching for suitable distribution candidates in the Netherlands and doing competitor market research, so that Molarclean could approach these parties better prepared.

Molarclean introduction

Molarclean is a UK company who has been manufacturing replacement toothbrush heads since 2011. The company has an e-commerce website and also supplies UK retailers / wholesale. Before Alliance experts started the project in 2019, they were selling approximately 2 million brush heads per year. They have worked with retailers such as Boots, Home Bargains, B&M Bargains, Poundworld, Poundstretcher and Savers (from AS Watson Group).

Highest quality standards, competitive prices

Molarclean’s most popular products, the Oral-B compatible toothbrush heads, are sold for 66% less than the recommended retail price of Oral-B. Molarclean produces with excellent quality and has a trusted reputation. Molarclean works with and are currently rated excellent with a 9.3 out of 10 rating by over 2000 customers.

Expanding in a global market

Molarclean was looking to expand into Europe and Northern America and working with more retailers / wholesalers. MolarClean aims to be as successful in these countries as it is in the UK, and fill the gap between private labels and the single world leading global brand.

The Netherlands, the closest foreign market for the UK

Alliance experts assisted MolarClean with starting their first export, by searching for suitable distribution candidates in the Netherlands. We also contacted the retailers: supermarket, health / beauty shops, discounters and e-commerce specialists. During meetings in the Netherlands at the premises of three distributors, the distributors showed to be seriously interested in doing business together, and plans were made for next steps.

The Benelux, a very competitve market

The market of electric tooth brushes in the Benelux can be characterised as very competitive. Especially the hard discounter Action plays a strong role in the “price war” of the non-food categories. If MolarClean is able to be offer price advantages, the market offers great chances. Since most Dutch retailers are internationally active, these retailers could also be the “diving board” for MolarClean to other countries.

The Dutch economy in 2019

The Netherlands is the seventh largest economy in Europe and the fifth largest in the euro zone. The country has a reputation for its stable industrial relations, a sizeable trade surplus, and for being the most important transportation hub in the old continent. The key industrial sectors are food processing, chemicals, petroleum refining, and electrical machinery. The financial sector used to be renowned too, but the debt crisis from 2008 had a devastating effect on it, partly due to the exposure of Dutch banks to U.S. mortgage-backed securities. The same year, the government had to nationalize two banks and inject money on three other institutions.

Retail in Europe

When taken as a whole, the retail companies headquartered in the countries on the continent of Europe comprise a dominant presence in global retailing. Because of the size of the global Walmart organization, the U.S. retail industry is the largest in total revenue but in many ways, European retailing rivals U.S. around the world with an extensive reach.

Europe has one of the most competitive fast-moving consumer goods (FMCG) markets in the world in which the Netherlands plays an important role. This is because the Netherlands is considered one of the main logistics and distribution centres on the continent.

Oral care and electric tooth brushes

While many beauty and personal care categories are under pressure from maturity and unit price erosion, oral care in the Netherlands has managed to maintain fairly strong positive growth and this is forecasted to remain the case throughout the coming years. While demand is relatively mature, especially in essential categories such as toothpaste and manual toothbrushes, the positive growth being seen in oral care is mostly due to the increased societal attention being paid to healthy lifestyles and this includes taking regular action to prevent the onset of oral health problems.

Electric toothbrushes and their respective replacement units are expected to continue registering stable positive sales growth rates. This positive growth is set to be seen in both volume and value terms and is likely to apply to all electric toothbrush categories.

The Dutch retailing market is one of the fastest growing internet retailing scenes in Europe. This also holds true for sales of oral care.

Retailers in the Netherlands

The Dutch supermarkets are divided in 5 groups, Albert Heijn, SuperUnie and Jumbo are the classic retailers. SuperUnie is a group of independent smaller retail chains, organized in one purchasing union. Discount supermarkets are in hand of the two German retailers: Aldi and Lidl, where Lidl gained more power in the last decade.

Since old time, the Netherlands has a retail type that is called “drogist”. These are retailer selling different types non-food categories (and only some food). The market leaders in the classical “drogist” format are Kruidvat, Etos and DA / DIO.

Another style of retailers is the “warenhuis” (department store). For years, the retailer HEMA has been the leader of this segment for relative lower-prices. The leading middle-priced department store (V&D) got bankrupted.

A new trend in non-food: Action

The non-food market in the Netherlands, is strongly influenced for over a decade by the hard-discount retailer Action. Starting in the Netherlands in 1994 with 8 shops, nowadays Actions has 1000 shops in Netherlands, Belgium, Germany, Austria, Luxemburg, France and Poland. Action is focussed on selling at the lowest possible price. Due to this price fighter, the other retail chains a struggling with keeping their prices and demands up. This, combined with the growing internet sales, has lead in recent years to big reorganisations and even bankruptcy of established retail chains.

This all is both a risk and a chance for MolarClean. If MolarClean is able to match the targeted price level of Action, MolarClean could sell big amounts to this single account. At same time, the other retailers are also forced to sell at lower prices, and therefore to contact a producer like MolarClean.

Retail prices

Alliance experts looked at the price levels of different retail chains (see table below). We looked at private label only. As can be seen, the prices per unit change a lot, from 37 ct. (Action) to €2.93 (Etos). Of course, the conditions (margins) at classic retailers are different to the hard discounters.

Retail chain Type Shops Price/pack Brushes/pack Price/brush
DA / DIO Non food 401 € 18.99 10 € 1.90
Etos Non food 546 € 5.85 2 € 2.93
Kruidvat Non food 930 € 8.99 5 € 1.80
Blokker Non food 430 € 10.95 8 € 1.37
HEMA Non food 531 € 5.50 2 € 2.75
Action Non food discount 363 € 2.99 8 € 0.37
Aldi Supermarket discount 494 Not sold
Lidl Supermarket discount 413 € 3.99 8 € 0.50
Albert Heijn Supermarket 847 € 11.99 6 € 2.00
Jumbo Supermarket 581 € 4.45 2 € 2.23
SuperUnie Supermarket group 1500 € 4.18 2 € 2.09

Prices of private label replacement sets for electric tooth brushes at the main Dutch retailers

The market for non-food products in the discount segment, is highly effected by the new-comer Action. Therefore, MolarClean should think well about the price strategy in the Netherlands. Since Action is rapidly growing in neighbouring countries, the same strategy is needed in these countries.

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